In 2013, Jones Swanson and the firm of Fishman Haygood together represented the City of New Orleans in a suit arising from variable-rate bonds with related swap agreements, valued at $170 million.
As The Times-Picayune later reported, the deal was a “very unwise decision the city made in 2000 to sell bonds to get money to invest in the stock market as a way of shoring up its underfinanced pension plan for firefighters.”
These bonds, which the city issued in 2000, were supposed to generate a low fixed rate of interest so that the city could fund its pension obligations. Paine Webber Capital Services, now UBS, served as underwriter and remarketing agent for the bond issuance, as well as counterparty on the city’s swap transactions. In 2008, the structure collapsed and the city’s interest payments spiked—costing taxpayers tens of millions of dollars.
The case settled after a 2-day bench trial.