Hedge Fund, Private Equity, and Financial Institution Cases
Bartlit Beck represents hedge funds, private equity funds, and other financial institutions in complex litigation across the country.
We represent hedge funds in fraud and market manipulation actions where company wrongdoing has caused loss to the funds. We represent hedge funds and trustees in connection with residential mortgage-backed securities litigation. We represent hedge funds in the plaintiff-side pursuit of assigned claims, particularly in the secondary debt market. We represent hedge funds and private equity funds in the defense of investor litigation, bankruptcy trustee litigation, and the pursuit of post-closing adjustments and claims for misrepresentation of financial performance of target companies. We represent hedge funds that have been victimized in times of financial distress by financial institutions, including clearing firms. We represent employers of investment funds against their employees, and vice versa. We represent hedge funds in corporate control contests, including proxy fight-related litigation.
Our litigation partners bring deep expertise to these cases, with a roster that includes former transactional lawyers with deep expertise in credit agreements and merger agreements, former certified public accountants with accounting firm experience, and former management consultants experienced in company analysis. Below are some of the representative cases we have handled.
Massachusetts Mutual Life Ins. Co. Residential Mortgage-Backed Securities Litigation
We represented MassMutual in its actions under the Massachusetts Uniform Securities Act, against underwriters Credit Suisse and Goldman Sachs, arising from their sales of residential mortgage-backed securities to MassMutual in 2005-2007. Credit Suisse settled after four weeks of trial, taking an additional $79.5 million charge to earnings because of the settlement payment. Goldman Sachs settled shortly thereafter.
Rauner v. Kirkpatrick
We represented Bruce Rauner (former Illinois Governor and former managing partner of GTCR private equity) in a confidential AAA arbitration related to his investment as a limited partner in a private equity fund. The dispute centered on whether the General Partner (Kirkpatrick) had breached his fiduciary duties towards Rauner by deviating from the partnership agreement's waterfall provision, withholding approximately $12 million in proceeds for himself instead of distributing them to Rauner. We tried the case to a final arbitral award, but the results are confidential.
Elliott Associates, L.P., et al. v. AbbVie Inc.
Representing various investment funds in fraud actions arising from AbbVie’s aborted $50 billion acquisition of Shire in 2014.
FGIC Ad Hoc Group of Investors
We acted as lead co-counsel to an ad hoc group of investors, comprised of hedge funds and insurance companies, in nine Countrywide residential mortgage-backed securities trusts insured by Financial Guaranty Insurance Company (FGIC) in facilitating a $950 million settlement among Bank of America, FGIC, and BNY Mellon as Trustee for the nine trusts.
Mortgage Guarantee Insurance Corp. v. Lehman Brothers, Inc.
We represented MGIC against Lehman Brothers, Inc. for fraud and breaches of representations and warranties related to mortgage loans insured by MGIC.
Law Debenture Trust Co. of New York
We are retained by Special Trustee, Law Debenture Trust Company of New York, to investigate whether mortgage loans complied with representations and warranties made by the seller of the loans and to enforce the seller's repurchase obligations for the loans that breached those representations and warranties.
Hedge Fund Litigation Counseling – Residential Mortgage-Backed Securities
We have acted as counsel to numerous hedge funds on issues involving rights and remedies of securitization certificate holders and securitization trusts, including review of documentation, design of legal strategies, and negotiation with adverse parties.
ACP Master, Ltd., et al. v. Bank of America, et al.
We represented certain holders of Fontainebleau debt in their actions against numerous financial institutions for breach of contract.
Elliott Associates, L.P. v. Porsche SE
We represented hedge funds in securities fraud and manipulation lawsuit against Porsche SE related to Porsche SE's attempted takeover of Volkswagen AG in 2008. Damages in excess of $1 billion.
Countrywide Home Loans, Inc. and BAC Home Loans Servicing, LP v. Mortgage Guaranty Insurance Corporation (Federal District Court, Northern District of California)
We represented MGIC in a $100 million mortgage insurance dispute with Countrywide.
Peterson v. Somers Dublin (In re Lancelot Investors Fund, Ltd.)
We represented Pentagon Capital Management PLC and Pentagon Select Ltd. in a $60 million preferential transfer action brought by the Chapter 7 trustee of Lancelot Investors Fund, Ltd.
DK Acquisition Partners, L.P., et al. v. J.P. Morgan Chase & Co., et al. (Southern District of Texas and Southern District of New York)
We represented holders of more than $1.5 billion in Enron bank debt in their action against J.P. Morgan Chase & Co., Citigroup and affiliates, alleging fraud and other wrongdoing based on defendants’ knowledge of and participation in scheme to conceal Enron’s true financial condition.
Treasurer of the State of Connecticut v. Forstmann Little, et al. (Superior Court, Rockville, Connecticut)
We represented private equity fund Forstmann Little in a lawsuit brought by one of Forstmann Little's limited partners, the State of Connecticut pension funds.
Residential Funding Corp. (GMAC) v. DeGeorge Financial Corp. (District Court, New Haven, Connecticut)
We represented GMAC in a lender liability case involving an agreement to purchase home construction loans.
Edward Keely v. Janus Management Holdings Corp. (District Court, Denver, Colorado)
We represented former Janus portfolio manager in action for fraud, breach of employment contract and related claims against mutual fund company.
Ocean Ridge Capital Advisors, LLC, as Litigation Trustee v. Metropolitan Life Insurance Company, et al. (Southern District of New York)
We represented Litigation Trustee against directors and officers for breach of fiduciary duty and against recipients of preferential and fraudulent transfers exceeding $60 million from Meridian Automotive Systems, Inc.
Amaranth LLC v. J.P. Morgan Chase & Co. (Supreme Court, New York County)
We represented hedge fund and trading advisor in their action for breach of contract and tortious interference with prospective economic advantage against investment bank, commercial bank, and futures commission merchant.
Racepoint Partners LLC v. JPMorgan Chase Bank (Supreme Court, New York County)
We represented holders of more than $1 billion in Enron bonds in their action against JPMorgan Chase Bank as indenture trustee, alleging breach of contract, breach of implied duty of good faith and fair dealing, and breach of fiduciary duty.
Private Equity Fund Arbitration (Washington, D.C.)
We represented the private equity fund buyer of company in post-closing and indemnification dispute with private equity fund seller of company.
Citadel Equity Fund, Ltd. v. Kidan (Southern District of Florida)
Citadel Equity Fund, Ltd. v. Wells Fargo Foothill (Southern District of New York)
We represented Citadel in breach of contract and fraud claims against borrowers and agent arising from fraudulent purchase of SunCruz Casinos in Florida using $60 million loan.
Merrill Lynch Bank & Trust Co., FSB v. National City Bank (Supreme Court of the State of New York)
We represented National City Bank in case concerning its $4.5 billion sale of mortgage origination and servicing businesses to Merrill Lynch.