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

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

The Life Settlement: Yield For The Investor And Cash For The Consumer

Mar 31 2015 | 6:48am ET

Investors are languishing in a yield-starved, low-interest rate environment, looking...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note