If there was ever any doubt that Swiss bank UBS no longer wanted to
fund the merger of The Finish Line, Inc. and Genesco, Inc., those
doubts were certainly erased on Friday as the Swiss banking giant filed
suit in U.S. District Court and sought permission from a Tennessee
Chancery Court to be relieved of its obligation to finance the deal
first announced in June.

UBS on Friday claimed in the court filing in the Southern District of
New York that the merged Genesco / The Finish Line entity would be on
shaky financial ground. “Due to Finish Line's earnings
difficulties and Genesco's disastrous financial condition, the combined
Finish Line-Genesco entity would be insolvent,” UBS said in papers
filed with the New York court.

Then it really got ugly.

In the court filing, USB contends that “Finish Line suffered injury by
entering into the merger agreement while unaware that Genesco was in
the midst of a financial free-fall, for which there still appears to be
no bottom.” A UBS lawyer apparently accused Genesco of concealing
the state of its financial situation from FINL before the deal was
completed.

Genesco's Chairman and CEO Hal Pennington shot back on Friday in a
release, denying claims that he provided false financial information to
UBS or The Finish Line. He also said he would enforce his company's
$1.5 billion agreement to be acquired by Finish Line.

“Today, my management team and I have been accused of defrauding UBS.
On behalf of our company, our management team and our employees, I
categorically deny those claims,” Pennington said in the
statement. “It is sad when a major international financial
institution resorts to this sort of mudslinging in an attempt to get
out of its contractual obligations and survive the meltdown in the
credit markets.”

A trial is set to commence in the Tennessee court on December 10, a
result of previous action taken by Genesco to force FINL and UBS to
close the deal as agreed.

>>> C’mon
UBS, these are public companies we’re talking’ about. You’re
supposed to do due diligence before you agree to the deal…