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Private Fund Disputes

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PRIVATE FUND DISPUTES

Clients in the private fund industry are confronting greater litigation risk today than at any other time in their history. Nixon Peabody has an experienced team of litigators with an industry-leading reputation in the private fund disputes area. In the mid-1990s, long before the credit crisis and the subsequent turmoil in the private fund industry, our attorneys developed a cutting-edge practice in this area when we represented sponsors of private investment funds, including tax credit partnerships and venture capital funds. Today, we are industry leaders with the experience and judgment to solve complex disputes affecting a variety of private investment funds, including:

  • Hedge funds
  • Private equity funds
  • Venture funds
  • Collateralized debt obligations (CDO)
  • Asset-backed securities (ABS)
  • Real estate investment partnerships

Our clients include funds, investors, liquidators, managers, and insolvent estates. We represent clients from around the world in both U.S. domestic funds and in funds domiciled offshore in the Cayman Islands and British Virgin Islands (B.V.I.), and in Europe.

We understand the duties and obligations of funds and managers, so we can assist them with any challenge, from day-to-day obligations, to control contests, to winding down and liquidation. Our team is amongst the most experienced in the industry in handling fraud-based redemption and clawback disputes and related insolvency proceedings. As a result, we understand how to help clients address the friction between investors and managers. Fund and manager clients have also turned to Nixon Peabody repeatedly for advice and representation in criminal and civil investigations ranging from insider trading to record retention compliance.

Representative Experience

  • Representing Mount Capital Fund Limited, a British Virgin Island-based hedge fund, in a $50 million preference and claw back action brought by the Madoff trustee.

    Representing Mount Capital Fund Limited, a British Virgin Island-based hedge fund, in a $50 million preference and clawback action brought by the Madoff trustee, in one of the first sales of Madoff-tied SIPA claims to a third party, and with litigation advice related to recovery of assets lost in Madoff-related funds.

  • Representing John Hancock in a suit brought by an LLC over lost assets from its multi-million dollar investment through variable life insurance policies in Tremont Group Holdings Inc. fund.
    Representing John Hancock in a suit brought by an LLC over lost assets from its multi-million dollar investment through variable life insurance policies in Tremont Group Holdings Inc. fund.
  • Representing ThreeAM SPC a Cayman Island-based hedge fund of funds in valuation/liquidation disputes with various PIPE funds.
    Representing ThreeAM SPC a Cayman Island-based hedge fund of funds in valuation/liquidation disputes with various PIPE funds.
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  • Representing Credit Suisse entities and executives as co-counsel in actions brought by the Massachusetts Mutual Life Insurance Company and the Federal Home Loan Bank of Boston

    Representing Credit Suisse entities and executives as co-counsel in actions brought by the Massachusetts Mutual Life Insurance Company and the Federal Home Loan Bank of Boston, who are seeking billions of dollars in rescission against issuers, sponsors, and underwriters of residential mortgage-backed securities.

  • Representing Boston Capital in numerous limited partnership disputes related to syndicated tax credit funds.
    Representing Boston Capital in numerous limited partnership disputes related to syndicated tax credit funds.
  • Representing Cayman Island and Delaware-based special purpose vehicles (SPVs) in putative securities class action alleging fraud under both New York law and Section 10(b) of the Securities Exchange Act of 1934.

    Representing Cayman Island and Delaware-based special purpose vehicles (SPVs) in putative securities class action alleging fraud under both New York law and Section 10(b) of the Securities Exchange Act of 1934. The claims arise out of losses that the lead plaintiff investment fund alleges were suffered in connection with two synthetic CDO transactions that offered investors exposure to the performance of subprime residential mortgage-backed securities through certain credit default swap.

  • Defended nine pairs of Cayman Island and Delaware-based issuer/co-issuer defendants in a $100 million securities fraud case involving the sale of Collateralized Debt Obligations (CDOs), resulting in a complete dismissal of the case.
    Defended nine pairs of Cayman Island and Delaware-based issuer/co-issuer defendants in a $100 million securities fraud case involving the sale of collateralized debt obligations (CDOs), resulting in a complete dismissal of the case.
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Media Clips

    • Adding Insult to Injury: Investors in Madoff Feeder Funds Are Targets for Claw Back Suits
      Corporate LiveWire | October 1, 2011

      This contributed article, authored by Boston Commercial Litigation partners Tim Mungovan and Stephen LaRose and Boston Commercial Litigation associate Joel Cavanaugh, discusses “Sentry Claw Back Suits” relating to investors in Madoff feeder funds who redeemed capital prior to the disclosure of the fraud in December 2008 and now face increasing litigation risks.

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    Private Fund Disputes