Procter & Gamble Co. filed a $130 million lawsuit Thursday against Bankers Trust New York Corp., charging the bank with failing to disclose the risks of an interest rate swap.

P&G had threatened to sue when its $102 million in after-tax losses on derivatives were disclosed in April, but the timing of the suit took the marketplace by surprise.

Observers assumed that P&G would wait for the outcome of a smaller suit filed last month by Gibson Greetings, which also maintains that it was misled about derivatives by Bankers Trust. "I'm really surprised P&G would take this action now," said Heinz Binggeli, managing director of Emcor, an Irvington, N.Y., risk management consultant. "I think it will open a can of worms. If others see u big company like P&G suing, they may not want to wait for the outcome of the Gibson case and sue also."

News of the suit appeared to revive investor uncertainty about Bankers Trust's emphasis of its trading business under chairman Charles S. Sanford. Bankers Trust stock was off 25 cents at $66.50 on the news, while bank issues generally were leading a healthy rebound in the stock market.

At issue are financial products called derivatives, which Bankers Trust and other big banks offer to clients who wish to hedge business risks or take positions based on their expectations about financial markets. Derivatives' values move up or down based on changes in currencies, interest rates, and other benchmarks.

P&G's lawsuit contends that Bankers Trust pressured the company into accepting an interest rate swap without fully disclosing the risks.

Swaps are agreements between the dealer and the client to exchange cash flows at a future date according to a prearranged formula.

The swap that is the subject of the lawsuit was tied to 5and 30-year Treasury notes. Another swap between Bankers Trust and P&G, involving German marks, is not included in this lawsuit, but a P&G spokeswoman said the company is considering legal action on it as well.

The spokeswoman said P&G was sold a swap that it never would have accepted had it been aware of all the risks.

The company has never seen a risk model of the transaction that Bankers Trust apparently had secretly prepared, she added.

"The issue here is Bankers Trusts' selling practices," said Edwin L. Artzt, chairman and chief executive of P&G. The bank "said the transaction was developed to meet P&G's rate views and risk parameters. It clearly wasn't."

Bankers Trust said it is "confident that the nature of these transactions was disclosed fully to senior P&G officials."

Observers say that although the unsophisticated-user claim may work for a smaller company like Gibson Greetings, it won't get P&G very far.

"P&G is a large company with a huge interest rate exposure.

You would assume its finance department would know what it's doing," said Mr. Binggeli of Emcor.

"As a sophisticated buyer, it is your duty to evaluate the instruments. If you don't understand them, you have to find out." The company spokeswoman said P&G's policy on the use of derivatives is conservative and does not allow the use of leveraged, open-ended transactions or speculation.

By entering into the swap with Bankers Trust, P&G was looking for only a modest return on its investment, the spokeswoman noted.

The $200 million notional amount swap reportedly netted P&G about $1.5 million a year for five years.

The deal was supposed to contain a lock-in safety valve that would allow P&G to obtain an acceptable interest rate, even if rates moved unfavorably, the spokeswoman said.

P&G contends that Bankers Trust hedged more than $3 billion to lay off the risk from its deal with P&G.

"This provides an idea of the magnitude of the risk involved in this transaction," the spokeswoman said.

"Nowhere was this true risk disclosed to P&G."

P&G's suit seeks to void and rescind the swap transaction. The company is seeking $130 million in compensatory damages plus unspecified punitive damages.

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