Hedge Funds Deny Secret Scheming Over CSX

May 23 2008 | 2:00am ET

A pair of hedge funds parried accusations of negotiating in bad faith with leaders of U.S. railroad CSX Corp. in court yesterday, as the judge in the case expressed skepticism about both sides’ claims.

Christopher Hohn of The Children’s Investment Fund and Alexandre Behring of 3G Capital Partners told a judge they had discussions early last year, but did not go into strategy or disclose the sizes of their stakes. Later that year, the two officially formed a group, which now holds a 12.3% stake in CSX and is seeking to elect five directors to the company’s board.

In their countersuit against CSX, the hedge funds called the railroad’s lawsuit, accusing them of securities law violations, the latest in “a long series of scorched-earth tactical maneuvers” by CSX.

While Judge Lewis Kaplan appeared to accept, at least in part, CSX’s complaint about how the hedge funds built their stake, calling it “opaque to the broader market,” he complained that “neither side has had very much to say on the question of what relief would be appropriate in this case, and why, in the event I find violations.”

CSX has asked Judge Kaplan to block the hedge funds’ slate of board candidates, block them from voting some of their shares and force them to sell part of their stake.

The judge is expected to rule before CSX’s June 25 annual meeting.


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.