Hedge Fund Sues Perry Over Madoff Deal

Jul 6 2012 | 12:14pm ET

Another hedge fund has sued Perry Capital over an alleged deal for a piece of claims against the Bernard Madoff estate.

According to Solus Alternative Investments, which filed the suit in New York State court in Manhattan on Tuesday, Perry reneged on an agreement to sell Solus a portion of its Madoff interests. The value of Madoff claims on the secondary market has been rising as the legal challenges to trustee Irving Picard continue to dwindle, and investors sense that the $9 billion and counting he has collected could soon be making its way to claimholders.

Solus said that, with the assistance of Deutsche Bank, which sold Perry the Madoff claims, Perry and Solus were ready to close the transfer between them by early last month. The New York-based firm said that Perry agreed to the trade both over the telephone and in Bloomberg instant messages.

"Despite repeated demands by Solus since early June, Perry Capital has refused to honor the binding contract," Solus alleged. "Suffering a case of seller's remorse, Perry Capital went radio silent and told its lawyers to put the pens down."

Solus is seeking $20 million in damages.

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