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Preston Hollow can proceed with Nuveen intimidation case

Preston Hollow Capital LLC can proceed with a defamation lawsuit against Nuveen LLC that accuses the municipal bond giant of a campaign of intimidation designed to decimate its smaller rival, a Delaware judge ruled.

Preston Hollow has presented enough evidence to press ahead with claims that Nuveen and John Miller, its head of municipal-bond investments, interfered with the bond fund’s business contacts and disparaged its operations in an effort to pressure other bond players to stop working with the Dallas-based firm, Delaware Chancery Court Judge Sam Glasscock III said Tuesday.

Miller and his team allegedly called Deutsche Bank AG in December, demanding that it unwind more than $400 million in financing deals with Preston Hollow and pressured the bank not to provide future loans, according to an initial complaint by Preston Hollow that didn’t identify the lender.

Stewart Lewack, a spokesman for Chicago-based Nuveen, didn’t have an immediate comment on Glasscock’s ruling. The firm, which oversees more than $140 billion of municipal bonds and manages the biggest U.S. high-yield muni bond fund, generates millions of dollars in revenue for Wall Street trading desks.

Glasscock didn’t rule on Preston Hollow’s request that he order Miller and other Nuveen officials to stop denigrating the fund or acting to scare off financial institutions — such as Deutsche Bank — from doing business with it. He merely allowed the case to move forward.

The case is Preston Hollow Capital LLC v. Nuveen LLC, 2019-0169, Delaware Court of Chancery (Georgetown).

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