Saturday, 30 July 2016
Last updated 13 hours ago
Jun 23 2010 | 12:25pm ET
Continuing a nasty legal battle over their investments with CompuCredit Holdings, two dozen hedge funds are blasting the subprime mortgage lender’s lawyers.
The 24 funds are demanding sanctions against both CompuCredit and law firm Robins Kaplan Miller & Ciresi, accusing the latter of filing a “factually groundless” countersuit on behalf of its client. That lawsuit accuses the hedge funds of conspiring to fix the price of CompuCredit bonds, came in response to the hedge funds’ lawsuit accusing CompuCredit of fraud.
In seeking sanctions against Minneapolis-based Robins Kaplan, Jeff Ross, a lawyer for the hedge funds, wrote, “it is rare that a party and its sophisticated counsel would run afoul of so many legal road signs in filing a complaint and then persist in its advocacy.”
In particular, the hedge funds rapped Robins Kaplan and CompuCredit Treasurer William McCarney for accusing the hedge funds of buying up the company’s bonds after driving down their price by alleging in court that CompuCredit was going broke. McCartney allegedly said in an affidavit that an official from one of the hedge funds had told him the funds “had been buying CompuCredit’s notes as a group.”
In fact, according to the hedge funds, they have sold $15.5 million worth of the bonds this year. And a transcript of the conversation between McCartney and the hedge fund official shows no such exchange.
The hedge funds called for monetary sanctions against the firm and the dismissal of the antitrust countersuit.
Christopher Mandel, one of the Robins Kaplan lawyers representing CompuCredit, told the Minneapolis Star-Tribune that the sanctions motion “is baseless and we look forward to beating it in court.”