Barclays Bank PLC breached a swap agreement with hedge fund BDC Finance LLC in 2008 when it did not return $40 million in collateral requested by BDC, instead paying only $5 million a day late and failing to dispute the amount using agreed-upon dispute resolution procedures, a divided state appeals panel ruled.
The 3-2 ruling in BDC v. Barclays, 650375/08, which reversed an August 2012 decision by Manhattan Supreme Court Justice Eileen Bransten (See Profile), means that Barclays may have to return nearly $300 million in collateral it still holds, plus interest, to BDC.
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