Timberwolf suit ends in arbitration

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Timberwolf suit ends in arbitration

Heungkuk Life Insurance’s lawsuit against Goldman Sachs Group over a collateralized debt obligation (CDO) was withdrawn from a New York state court after the two sides agreed to resolve the dispute through arbitration.

Heungkuk sued New York-based Goldman Sachs at a federal court in Manhattan in March over a $1 billion collateralized debt obligation known as Timberwolf, accusing the company of fraud and seeking more than $47.3 million in damages. The Seoul-based insurer filed a similar state-court suit in April.

The federal case was voluntarily dismissed in May, according to court records. The two sides have agreed to “pursue the extrajudicial resolution” of the case in a state court, according to court documents filed yesterday. The state case was withdrawn “without prejudice,” meaning the claims can be refiled.

The case will be resolved through arbitration, Jon Pickhardt, an attorney with Quinn Emanuel Urquhart & Sullivan in New York who is representing Heungkuk, said in a phone interview.

Timberwolf was called “one shi--y deal” by a bank executive in a 2007 internal e-mail written eight days after the Heungkuk investment, according to the lawsuits. The e-mail was released publicly by U.S. Senate lawmakers last year.

Heungkuk filed a criminal complaint against past and present employees of Goldman Sachs in Korea relating to its purchase of a CDO securitization from the firm, the New York-based company said in a filing with the U.S. Securities and Exchange Commission on Aug. 9.

Michael DuVally, a spokesman for Goldman Sachs, declined to comment on today’s court filing. Bloomberg

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