Highland Lawsuit Called ‘Transparent End-Run’

Aug 12 2010 | 12:01pm ET

Last month, Highland Capital Management sued UBS and one of its investment banking clients, alleging that it was kept out of LyondellBasell Industries’ bankruptcy-exit financing because of another legal spat between the hedge fund and UBS. Now, the investment bank and Lyondell are seeking to have Highland’s lawsuit against them junked, as UBS’s lawsuit against Highland over a bad collateralized debt obligation deal was six months ago (UBS has since refiled the lawsuit).

According to Lyondell’s motion to dismiss the Highland lawsuit, Highland’s lawsuit came too late—its bankruptcy plan was signed off on in April, a month after the hedge fund learned that it was being excluded from the financing. Lyondell called Highland’s bid to halt its bankruptcy plan a “transparent attempt to end-run around” the plan.

“Not only did Highland fail to raise its accusations at any number of stages during the bankruptcy process, but Highland never even contacted that reorganized debtors to lodge a complaint about conduct it now alleges caused substantial damages,” Lyondell wrote. What’s more, some Highland funds actually voted in favor of the plan that excluded them the company alleges.

Finally, Lyondell told the New York federal bankruptcy court, Highland picked the wrong venue and should have filed its complaint in federal court rather than New York state court.

In its lawsuit, Highland said that “UBS brazenly admitted that it refused to provide any allocation to Highland because of the UBS/Highland litigation.”


In Depth

JOBS Act Propels Real-Estate Crowdfunding Platform

Oct 21 2014 | 2:57am ET

If D.J. Paul were a real estate development, he would be described as “multi-use...

Lifestyle

Strippers Accused Of Robbing Hedge-Fund Manager Face Jail

Oct 20 2014 | 9:20am ET

A group of alleged stripper-thieves—whose victims include a hedge-fund manager...

Guest Contributor

PAAMCO: European Equity Exposure - Challenging Year, But All is Not Lost

Oct 16 2014 | 4:12am ET

European equity hedge fund managers have had a tough time so far this year. The...

 

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

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

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.