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

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Moore Capital PM Fired After Raucous Hamptons Party

Jul 7 2016 | 10:47pm ET

A portfolio manager for Louis Bacon’s $15 billion hedge fund Moore Capital Management...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...