Hedge Fund Pacificor Sued Over Mortgage Lender Acquisition

Nov 26 2008 | 3:11am ET

Pacificor has been sued by the former owners of a mortgage lender the California hedge fund bought.

John and Kitty Gaiser have sued the Santa Barbara-based firm and the estate of its former manager, Michael Klein, seeking $30 million. The Gaisers’ lawsuit says that Pacificor “misused a position of trust and control in order to attempt to take control of and acquire—without compensation—John and Kitty Gaiser’s ownership of Quality Home Loans,” the Gaisers’ law firm said in a statement.

According to the suit, filed in Los Angeles County Superior Court, Quality Home Loans filed for bankruptcy after Pacificor sought to buy it. The hedge fund eventually acquired the mortgage lender after it filed for Chapter 11 bankruptcy protection.

“It is our hope that this lawsuit will rectify the massive damage done to the Gaisers by the named defendants,” the Gaisers’ lawyer, John Edgar, said. “We will look forward to proving these damages at trial.”

For its part, Pacificor has denied the charges, according to the Pacific Coast Business Times.

Klein was killed in a plane crash last year in Panama. Since his death, Pacificor and his estate have been inundated with lawsuits. The Sorenson Trust and Relief Return International have sued, claiming that Klein promised to allow them to redeem their investments prior to his death. The firm and Klein’s estate have also been sued by his ex-wife over their daughters’ death in the plane crash. And the family of his daughter’s best friend—the only survivor of the crash—has also sued his estate.


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

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

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of