Tuesday, 9 February 2016
Last updated 12 hours ago
Feb 17 2009 | 1:29am ET
A Texas charity is suing Highland Capital Management, alleging that the hedge fund reneged on a redemption request filed before the firm decided to shutter the fund in question.
The Mary E. Bivins Foundation, an Amarillo nonprofit that seeks to help the elderly, says Dallas-based Highland agreed to return its $1.9 million investment as of July 1, in response to a March redemption request. But the foundation says it has received only $80,000 of its investment in the Highland Credit Strategies Fund, which Highland announced it would close in October.
“Moreover, Highland has stopped all payments and informed Bivins that [it] is reneging on its obligation to pay the remaining funds to Bivins,” the charity alleges in the lawsuit.
When it announced that it would close the Credit Strategies fund and its flagship, the Highland Crusader Fund, Highland said it would liquidate the funds, which manage a combined $1.5 billion, over the next three years. According to the Bivins Foundation, the firm is returning the money to investors on a pro-rate basis, collecting a 1% management fee all the while.
The foundation says it should have been exempted from that repayment plan, since it filed its redemption request—and had it accepted—long before Highland decided to close the fund.
Highland had no comment on the lawsuit.