New York (HedgeCo.Net) – The hedge fund formerly run by the late Michael Klein has been sued by two individuals who owned a mortgage lending business in which the fund had a stake.

John and Kitty Gaiser are suing California-based Pacificor after the fund allegedly “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,” according to a statement made by the Gaiser’s legal team. According to the Gaisers, Quality Home Loans filed for Chapter 11 bankruptcy protection, at which time the hedge fund acquired the business.

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

Pacificor is finding themselves in the middle of several lawsuits ever since Klein and his daughter were killed in plane crash last December over a Panama forest. The Sorenson Trust and Relief Return International, who had $24 million tied up in the hedge fund, is suing over a promise that Klein allegedly made before his death.

According to the company, Klein made a verbal promise to the company, saying they could still withdraw their investment if given notice by December 31, 2007. When they moved to withdraw $14 million from the fund and redeem $10 million in stock on December 27th, they were denied by Pacificor after the fund stated they had no knowledge of the promise made by Klein.

In addition to the suit, Klein’s estate is also being sued by his ex-wife over their daughter’s death and by the family of the daughter’s friend, who was the only survivor of the crash.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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Tags: assurances, chief-executive, coast-business, court-decision, due-diligence-service, federal-deposit-insurance-corp, fn, news-briefing, plane-crash, stalking-horse-bidder, unions, withdrawal-policy

New York (HedgeCo.Net) – Kim Klein, ex-wife of late hedge fund manager Michael Klein, has filed a wrongful death lawsuit on behalf of their daughter Talia against both Michael’s company, Pacificor, and his estate.  Both Michael and Talia were killed in a plane crash over the Panama mountains this past Christmas in a small Cessna aircraft.

According to a report by the Santa Barbara Independent, the suit was filed on July 17^th in the Santa Barbara Superior Court by Stuart Fraenkel of Kreindler & Kreindler, considered to be experts within the field of aviation litigation. 

The suit names Islas Secas as a defendent, the resort in Panama that Klein, along with his 13-daughter and his daughter’s friend were visiting.  The suit alleges that Klein had strapped in with a 23-year old pilot known throughout the community as “Mr. Death” because of a tarnished track record.  Ultimately though, Klein was in control of the plane and should’ve used better judgment , claims his ex-wife.

Because of the nasty weather and winds up to 36 knots, the suit states that Klein should’ve used caution, but instead “intentionally, recklessly, and in conscious disregard for the safety of others, flew, or directed the flight of the [aircraft] into said dangerous and perilous conditions, for business purposes.”

The group was headed north from Isla Secas to take photographs of properties.  Kim Klein is claiming she suffered both economic and non-economic damages. 

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!
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Tags: plane-crash, withdrawal-policy