JPMorgan Sues Perot Hedge Fund, Alleging Default

Dec 1 2008 | 2:05am ET

Just days before announcing that it would liquidate a fixed-income hedge fund, Parkcentral Capital Management defaulted on a margin call, according to a lawsuit filed by JPMorgan Chase.

The bank accused the Plano, Texas-based firm, which primarily manages money for the family of former U.S. presidential candidate H. Ross Perot, of defaulting on a Nov. 20 demand that it provide $125 million in eligible credit support as collateral on derivative contracts. It says it is owed as much as $753 million in collateral based on an early-termination agreement.

JPMorgan claims it hand-delivered three notices of default to Parkcentral. The lawsuit was filed in New York state court.

“By failing to perform its obligations under the master agreement, including its obligation to pay to JPMorgan the amount owing under the master agreement, Parkcentral has materially breached” that agreement,” JPMorgan alleges in the Nov. 26 suit.

Last week, Parkcentral told investors it was liquidating its six-year-old Parkcentral Global Hub Fund to pay off creditors. The $1.5 billion fund, which is down as much as 40% this year, is “no longer viable,” the firm said.


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...