Court Authorized UBS Asset Hunt Against Highland Founder
The ruling allows UBS to pursue post-judgment assets after a New York appeals court set new rules for veil-piercing.
Updated on Sept. 29, 2026 in Corporate Finance
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A New York appellate court authorized UBS to pursue the founder of Highland Capital to recover over $1 billion in unpaid judgments. The ruling establishes that creditors may target post-judgment asset transfers under state law.
Why it matters
The decision clarifies how creditors can pursue assets moved after a judgment, potentially changing collection strategies for firms facing non-performing counterparty debts. This follows a long-running dispute originating from a missed $10 million collateral call during the 2008 financial crisis.
UBS is seeking to recover approximately $145 million in allegedly diverted assets, including $105 million routed through insurance premiums, against a total judgment pool exceeding $1 billion. These claims follow Highland Capital's failure to meet a $10 million collateral call.
The players
UBS
A multinational investment bank and financial services company that provides wealth management and asset management services globally.
Highland Capital
An alternative investment firm that manages hedge funds and other credit-focused investment vehicles.
The details
UBS filed a turnover proceeding alleging that Highland Capital's founder and general counsel moved assets to frustrate collections. The court specifically allowed veil-piercing claims to target these transfers, pointing to badges of domination such as shared office space. While the court dismissed alter ego claims against the general counsel and two limited partnerships, it affirmed that New York law governs the fraudulent conveyance claims.
Timeline
2007-2008: UBS and Highland Capital entities entered into original securitization deals.
2020: UBS held judgments exceeding $1 billion against the funds.
2023: UBS filed a turnover proceeding against the founder.
September 24, 2026: The Appellate Division, First Department, modified the lower court order.
Market Landscape
This decision clarifies the scope of post-judgment recovery efforts within the New York legal system. It follows a multi-year effort to collect on liabilities originally stemming from the 2008 financial crisis.
Business operators should review their counterparty credit agreements and the structure of collateral calls to ensure they are shielded from similar asset-shuffling tactics. Legal counsel should evaluate whether existing judgment-collection strategies account for post-judgment transfer risks under New York law.
The takeaway
Creditors now have a clearer path to challenge asset transfers that occur after a judgment is issued. Firms holding significant unpaid counterparty debts should review their legal options for identifying and reaching assets moved into newly created entities.
Further reading
For more on evolving collection standards, visit the Corporate Finance section.
Source note: This article includes information reported by InvestmentNews.
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