Ruling Sparks Dispute Over Trustee Duty

Hume, Lynn
June 2003
Bond Buyer;6/5/2003, Vol. 344 Issue 31650, p1
Trade Publication
This article focuses on the plans of the U.S. Trust Co. to appeal a ruling by a Washington state judge that its lawyers claim could dramatically change the corporate trust business and force trustees, at increased costs to issuers, to conduct due diligence investigations of pending municipal securities offerings. In his May 22, 2003 ruling, Judge Alan R. Hancock, of the Washington State Superior Court in Island County, denied U.S. Trust's motion to dismiss investor charges that the bank made reckless or negligent misrepresentations when it both certified it could serve as trustee for a 20 million dollars tax-exempt bond issue involving the Holmes Harbor Sewer District that was later found to have been illegally issued. U.S. Trust is planning to appeal Hancock's ruling to a Washington State appeals court and has until June 23, 2003 to file the appeal, said John D. Lowery and Gavin W. Skok, lawyers at Riddell Williams PS.


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