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Royal Bank of Scotland defends Interpleader action filed by LaSalle Bank relating to hybrid CDO

August 2008

Client(s) Royal Bank of Scotland Group plc, The

Jones Day is defending The Royal Bank of Scotland plc ("RBS") in an Interpleader action filed by LaSalle bank, as trustee for a hybrid CDO of ABS, Stack 2002-2 Ltd. The Interpleader complaint puts at issue an interpretation of the term Par Value Coverage Amount, which in turn is used to calculate the Senior Percentage test. The complaint alleges that RBS has advocated an interpretation of the provision that would result in an Event of Default under the Indenture. TCW, the Portfolio Manager, has advanced an alternate interpretation of the same provision. The trustee seeks a ruling from the court on the proper interpretation of the provision.

LaSalle Bank N.A. v. The Royal Bank of Scotland plc et al. (N.Y. Sup. Ct.)

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