Judge Sullivan issued an opinion yesterday with his findings and conclusions after a breach of contract bench trial in which Merrill Lynch Capital Advisors sued its swap counterparty and a guarantor for $146 million. The principal question at trial was whether the individuals signing the contracts had the authority to do so.

Judge Sullivan apparently did not believe this was a close question, based on the testimony of two of the signatories,  Ana Claudia De Moraes Tamer and Ernesto Valdomiro Possari:

Based on Tamer’s shifting and contradictory deposition testimony, trial affidavit, and trial testimony, the Court was left with two wildly variant, but equally unflattering, portraits of Tamer. The first reduced her to a complete cipher, willing to uncritically sign anything (including trial affidavits) put in front of her. The second suggested a thoroughly dishonest witness willing to say or do anything to salvage the financial fortunes of her companies. Neither is worthy of crediting, and each has implications for determining whether Itamarati’s other officers had actual authority when they executed the Swap guaranty and accompanying documentation on behalf of Itamarati. In fact, based upon Tamer’s testimony, the Court has little trouble concluding that Tamer and the board not only bestowed unto Oliveira actual authority to obligate the company but also to direct others to obligate the company. In short, Tamer was an utterly non-credible witness not worthy of belief. But if Tamer was a bad witness, the next witness, Ernesto Valdomiro Possari, who signed each of the confirmations on behalf of Itamarati, was even worse. In light of the fact that Possari was a director of UISA Finance and served as Itamarati’s chief legal officer and senior attorney for over thirty years, one might have expected Possari to be as knowledgeable about the companies and transactions in question as Tamer was ignorant. Indeed, Tamer herself had identified Possari as the person likely to have the greatest knowledge about UISA Finance.  In point of fact, Possari proved to be among the most willfully ignorant and thoroughly unbelievable witnesses the Court has ever encountered in over twenty years at the bar and bench.