Friday, 25 July 2014
Last updated 20 min ago
May 26 2011 | 4:02am ET
Highland Capital Management has blasted a new lawsuit against it as an attempt to benefit one investor at the expense of the Dallas-based firm's other clients.
The Houston Municipal Employees Pension Scheme has accused Highland of reducing its own stake in its flagship Crusader Fund by more than 95% after it froze redemptions, "[stripping] the master fund of its investment-grade assets, leaving it with only junk-rated (or unrated) investments." The pension had invested $15 million in Crusader, which collapsed in 2008.
Highland, however, disputes the story of an aggrieved investor, calling the lawsuit "a single plaintiff's law firm attempting to create financial leverage for one party's benefit at the expense of all other investors." Indeed, Highland said the lawsuit seeks to "derail the successful, investor-driven process that led to the recent, equitable resolution for the Highland Credit Strategies hedge fund," which also collapsed in 2008. Highland said the same law firm also sought to block that deal.
The hedge fund also denied that it had reduced its exposure to the Crusader fund, putting its current investment at between $90 million and $110 million.
"Highland has worked tirelessly in the best interest of all investors," the firm said. "As soon as the resolution from the investor-led process is approved, which we believe will happen imminently, we expect this meritless lawsuit to be dismissed."
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…