Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
New York (HedgeCo.Net) – Greenwich-based hedge fund SageCrest Finance has filed for Chapter 11 bankruptcy protection. The credit opportunity fund, which grants short-term loan to companies left with few financing alternatives, said its recent losses were due to the condition of the debt markets coupled with mounting lawsuits.
The fund once managed around $900 million. Current assets are listed at $50-$100 million. In addition to providing short term capital to businesses, SageCrest also extended loans to plaintiffs in slip-and-fall lawsuits. They also dabbled in the art world and are caught in a nasty battle mired with scandal to retrieve $40 million which they claim is owed to them.
SageCrest is run by Alan and Philip Morton. The fund has had its recent share of bad press, with two investors suing the company for various reasons this year. Westerly Capital filed a suit in June claiming the managers ran the fund to their own benefit and to the detriment of its clients. This followed an earlier suit by Wood Creek Capital Management, who claimed that SageCrest did not adhere to its redemption policy.
In a petition filed on Sunday in U.S. Bankruptcy Court in Connecticut, SageCrest listed debts in the range of $1 million to $10 million.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
New York (HedgeCo.Net) – Service providers for hedge funds scored a victory yesterday when a New York judge threw out a suit filed against UBS by defrauded investors.
Judge Charles Ramos dismissed the complaint in a Manhattan court at the request of UBS, who served as prime broker and custodian to the now collapsed hedge fund Wood River Partners, LP.
The investors had accused UBS of improperly profiting from the trades of the fund, and claimed that UBS had made $100 million by selling borrowed shares of Endwave Corp., the fund’s main holding.
The plaintiffs also accused UBS of creating a short market for Endwave stock while borrowing from the hedge fund’s account to buy shares. This in turn decreased the fund’s portfolio by almost $20 million, according to their allegations.
"The facts alleged do not support the causes of action,” Ramos stated. "These plaintiffs lack standing."
Investors were duped into thinking their assets were being diversified when in reality they weren’t. The hedge fund exceeded the 10% cap on ownership of any one company, though it wasn’t clear whether or not UBS had knowledge of that situation.
Nevertheless, it was a victory for service providers seeing as how recent trends show more and more of disdained investors going after affiliated or hired help by defunct hedge funds.
Investors in Wood River lost approximately $100 million. The plaintiffs of the lawsuit were made up of a group that had funneled in $79 million. John Whittier, who headed the hedge fund, is now serving three years behind bars.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
New York (HedgeCo.Net) – Carl Icahn continues his quest to shake up the board of Yahoo, and this time, that includes ousting CEO Jerry Yang. According to the Wall Street Journal, Icahn is channeling shareholder complaints in hopes to fuel his proxy battle and to facilitate the Microsoft deal.
Last month, several Yahoo shareholders filed a complaint against Yang and the board of Yahoo, claiming that they acted in a way to discourage the Microsoft deal and that Yang, who has a personal disdain for the software giant, did everything he could to quell the prospect of a merger. According to the statements, Yahoo had rejected a bid from Microsoft back in January 2007, when CEO Terry Semel said no to a $40/share offer.
The plaintiffs also suggest that Yang, along with co-founder David Filo and other Yahoo executives, not only turned down Microsoft’s bids, but set up a nice exit plan for employees to leave the company should there be a hostile takeover by constructing attractive compensation plans.
"Nobody ever understood the magnitude of what Yahoo did to do avoid making a deal," said Icahn.
Yahoo, who issued a statement last night, said that Yang, along with the board, has been "crystal clear that it would consider any proposal by Microsoft that was in the best interests of its shareholders".
Recently, hedge funds Paulson & Co. and Third Point LLC publically backed Icahn’s push for the Yahoo/Microsoft deal, with the hopes that the deal would help fuel higher returns and help Yahoo better compete against Google. Both hedge funds hold a major stake in Yahoo.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
CNN Sports Illustrated- A former hedge fund manager’s suicide has no effect on a lawsuit filed by six former NFL players against the league and its players union over $20 million they say they lost in an investment scheme, an attorney for the plaintiffs said Monday.
The lawsuit claims the union endorsed Kirk Wright’s services even though he had liens against him.
Wright hanged himself in a suburban Atlanta jail on Saturday, three days after he was convicted of leading an investment scheme that caused clients, ranging from the former NFL players to his mother, to lose millions of dollars while he spent the money on jewelry, real estate and a $500,000 wedding.
