UK - Hopes for an 11th hour out-of-court settlement in Unilever Pension Scheme's £130m negligence claim against Merrill Lynch Investment Managers (MLIM) have risen.
Sources claim both sides are anxious to reach an agreement before the High Court hearing starts on Monday. However, IPN understands that Unilever will not accept anything less than £50m settlement.
The Unilever Pension Scheme alleges that Mercury Asset Management - which was bought by Merrill Lynch Investment Managers for £3.1bn in December 1997 - mismanaged £1bn of its investments.
Unilever claims MLIM underperformed by 10.5% over a 15-month period up to March 1998, and that the firm breached conditions of its contract which agreed performance should not fall below 3% of the FTSE All Share benchmark.
However, MLIM claims that during the 15-month period commencing in January 1997 it made £200m for the Unilever scheme, with a 20% absolute growth performance. MLIM intends to base its defence on the fact that stocks in 1997 were unusually concentrated and volatile, with stocks on the FTSE All Share experiencing widespread underperformance.
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