Supreme Court Backs Hedge Funds In Price-Fixing Case

May 29 2013 | 11:19am ET

The U.S. Supreme Court handed a victory to a large group of hedge funds yesterday, letting stand a lower-court decision that cleared them of antitrust violations.

The high court refused the appeal of Atlanticus Holdings, the former CompuCredit Holdings, which alleged that 21 hedge funds violated the Sherman Antitrust Act by conspiring to force it to redeem long-dated convertible promissory notes decades ahead of schedule. The court's decision—and a rejection of Atlanticus' bid for a deferral of consideration—leaves in place the U.S. District Court decision, which found that the hedge funds, including GLG Partners and Akanthos Capital Management, were acting as creditors and were therefore exempt from antitrust laws.

The Supreme Court did not explain its decision.

Atlanticus in 2011 sued the hedge funds, alleging that they had acquired about 70% of the notes as part of a conspiracy to fix prices. The hedge fund refused to participate in a 2010 repurchase offer, and several months later demanded that Atlanticus repurchase the notes at face value—twice the price available on the secondary market.

Harry Niska, a lawyer for the hedge funds, said that the court "correctly held that the existing market practice of a debtor jointly renegotiating its existing debt with multiple creditors does not violate the antitrust laws."


In Depth

Q&A: Rotation Capital's Rothfleisch On SPAC 2.0

Aug 11 2017 | 7:43pm ET

Corporate actions have long been a staple of event-driven investors, but activity...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Star Mountain: Private Lending in the Lower Middle-Market

Aug 14 2017 | 4:45pm ET

Private credit has become one of the most popular alternative asset classes in recent...

 

From the current issue of