JPMorgan Cleared As Amaranth Suit Fails Again

Dec 6 2012 | 9:16am ET

JPMorgan Chase is off the hook—again—in the Amaranth Advisors collapse.

The defunct hedge fund, which collapsed six years ago after losing $6 billion on natural gas trades, had accused the bank of defamation, alleging it sabotaged and thwarted Amaranth's deal to sell most of its portfolio to Citadel Investment Group. The hedge fund said that JPMorgan warned Citadel that "Amaranth is not as solvent as they are telling you they are," and then took over the portfolio alongside Citadel.

Unfortunately for Amaranth, a New York State appeals court ruled, it was not as solvent as it said.

JPMorgan's statement was "not defamatory, as it simply expresses an opinion based on information available to all potential parties to the potential fund transaction," the court said. "Furthermore, the statement is substantially true, as there is uncontroverted evidence that JPMC did consider, if only briefly, making a bridge loan to the fund and concluded that it was 'less than creditworthy' and a 'potential preference risk.'"

Amaranth had been seeking to revive the suit, which was dismissed last year by a lower court.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of