Investment Funds

Overview

Friedman Kaplan advises investment funds and service providers in a wide variety of litigation and transactional matters.

The firm represents hedge funds and private equity funds in a broad array of complex commercial disputes involving federal and state claims for, among other things, violations of the federal securities laws, breach of contract, breach of fiduciary duty, fraud, and negligence. We have litigated numerous cases for hedge funds and other clients such as institutional investors, funds of funds, pension funds, litigation trusts, and lenders with claims of up to hundreds of millions of dollars against brokerage firms, accounting firms, administrators, hedge fund managers, and other institutional defendants.

We also advise hedge funds in many aspects of their ongoing operations, including agreements with research sources, service providers, and other third parties; employment matters and arrangements among members of general partner entities; terms of offering memoranda and limited partnership agreements, side-letters, and other agreements with limited partners; legal and compliance issues (including federal securities laws and the Foreign Corrupt Practices Act); financing arrangements; and private equity and other investments.

Our work also includes advising hedge funds, private equity funds, companies, and management teams on all stages of private-equity investments. Such matters include both initial and follow-on investments, restructurings, and offerings of securities (including IPOs, PIPEs, debt offerings, and exit transactions, in both private and public sales). The firm has represented both domestic and foreign clients, including in investments outside the U.S. (including China and India) and in-bound cross-border transactions.

Finally, we also frequently advise and provide training to hedge funds on various legal and compliance issues, including due diligence, documentation review, insider-trading and other securities laws, Foreign Corrupt Practices Act matters, "best execution" issues, side letters, conflicts of interest, and investor redemption issues.

Selected Experience

• Over the course of nearly a decade, we represented two hedge funds pursuing claims against the Republic of Argentina to recover on defaulted bonds.  Our clients finalized a settlement with the Republic in which they recovered approximately $1.3 billion. The litigation involved novel issues of contract, creditor and judgment enforcement law, and their intersection with the Foreign Sovereign Immunities Act. 

• We represented GSO Capital Partners in litigation challenging its refinancing of debt issued by New Jersey-based home builder Hovnanian Enterprises, Inc.
• We are representing a hedge fund in defense of litigation brought by a redeemed investor in the fund. 

• We represented a major hedge fund in its $20 million Series D investment in a start-up ridesharing mobile app company.

• We represented a major private equity fund in the restructuring of its $15 million Series D investment in a digital media and publishing company.

• We represented two municipal bond hedge funds in connection with litigation against their prime broker challenging margin calls that led to the funds' collapse.

• We represented a Canadian pension fund in connection with a dispute regarding derivatives trades in which the fund's counterparty, a major US investment bank, had defaulted.

• We, together with co-counsel, represented entities sponsored by Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. as acquirers in litigation concerning the funding banks’ alleged breach of a contract to finance the $18 billion leveraged buyout of Clear Channel Communications, Inc.
• We represented large groups of investors in Lancer Offshore, Inc. and The Omnifund, Ltd., as well as in feeder funds of Beacon Hill Master Fund and the joint official liquidators and receiver for those funds, following the funds’ demise. In both cases, we brought claims against the funds’ third-party service providers, alleging that they aided and abetted the fund managers' fraud and breaches of fiduciary duty.
• We represented an investment holding company in connection with the sale of its interest in Clearwire Corporation, a publicly held company, to Sprint for approximately $100 million.

• We represented a private equity fund in connection with an investment in a People’s Republic of China real estate developer, and advised the fund throughout its participation in the company’s subsequent IPO.

• We represented a hedge fund in connection with numerous investments in private and public financial industry and real estate companies in India. We worked closely with local counsel in India on the regulatory aspects of the investments.

• We represented a major private equity fund in connection with the sale of a portfolio of investments in the People’s Republic of China.

• We have represented the founders of a major investment fund in connection with the restructuring of their relationships through changes to the fund’s operating agreements.

• We successfully represented a major hedge fund in a series of lawsuits against major broker-dealers related to their failure to deliver certain Venezuelan Oil Obligations in connection with trade of Venezuelan Brady Bonds.