Spurned Bidder Sues Harbinger

Dec 29 2009 | 10:18am ET

A one-time rival bidder for an appliance company has accused Harbinger Capital Partners of using non-public information to derail its acquisition efforts.

Nacco Industries, which sells appliances under the Hamilton Beach brand, sued the New York-based activist hedge fund and Applica Inc., the company it sought to acquire, alleging breach of contract. According to Nacco—which failed in a similar suit in Ohio federal court in 2006—Applica executives passed non-public information to a Harbinger consultant, who now works for the hedge fund.

Among the non-public information alleged passed to David Maura was the fact of a 2006 deal between Nacco and Applica, which the company accuses the hedge fund of using to build up its stake in Applica, which sells appliances under the Black & Decker brand.

Harbinger itself wound up buying Applica and merging it with yet another appliance company, Salton Inc., which sold appliances under the Westinghouse brand.

Maura, Applica and Harbinger all deny any wrongdoing.

In a statement, the hedge fund called the lawsuit “a continuing effort by a disgruntled buyer to salvage something from its failed effort to buy Applica.” Harbinger founder Philip Falcone added, in his own statement, “with 20/20 hindsight, I wouldn’t do one thing differently.”

But while the Delaware Chancery Court found that there were “potentially legitimate” explanations for the communication between Harbinger and Maura, Vice Chancellor J. Travis Laster ruled in favor of Nacco, allowing its lawsuit to move forward.


In Depth

High Time For A Cannabis Hedge Fund?

Sep 30 2014 | 7:07am ET

Launching a hedge fund is always a gamble, but Leslie Bocskor's decision to launch...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.