Unilever, Merrill Come to Terms on Landmark Suit

December 6, 2001(PLANSPONSOR.com) - After eight weeks of legal wrangling in Britain?s High Court, Merrill Lynch and Unilever reached a settlement in the consumer giant?s £130 million negligence suit.

In settling the landmark suit, which managers fear would open the door for claims against asset management firms that lag their performance benchmarks, the two parties noted in a joint statement, that “they had resolved all issues between them concerning the management of the Unilever Superannuation Fund (USF) during a 15-month period in 1990s.”

The pension fund had claimed that Merrill Lynch had failed to implement sufficient risk control measures in the management of the group’s £1 billion mandate, causing the fund to lag its benchmark by 10.5% between January 1997 and March 1998.

Merrill Lynch had denied negligence, citing extraordinary market conditions, and countersued for £580,000 in unpaid fees

The amount of the settlement, which Merrill Lynch agreed to pay without admitting liability, was not disclosed.

While the judge presiding over the case questioned whether the two sides should have reached a settlement earlier, he praised their mutual good sense and sound judgment for settling.

– Camilla Klein                           editors@plansponsor.com

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