Highland Denies Pension Lawsuit's Claims

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."


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Versum Materials (VSM), with a market capitalization of $2.7 billion, enables chipmakers to achieve higher performance at lower cost with enhanced reliability. Versum is a leading global provider of electronic materials for the integrated circuit and flat-panel display markets.