Bank of New York Mellon Corp. won a U.S. Appeals Court ruling affirming it is entitled to a $312 million lien on the holdings of the bankrupt suburban Chicago cash management firm Sentinel Management Group Inc., Bloomberg News reported yesterday. After Sentinel filed for bankruptcy in 2007, liquidation trustee Frederick Grede sued the New York-based lender claiming that its employees knew that the firm was improperly using investor assets as credit-line collateral and sought to disallow or subordinate its lien. The Chicago-based appeals court today unanimously affirmed U.S. District Judge James B. Zagel's 2010 post-trial ruling rejecting Grede's claim that the bank's actions enabled Sentinel to deceive its clients, and affirmed an earlier dismissal of the trustee's bid to invalidate the lien as illegal.
