Investment
Management
Litigation
Harnessing the vast capabilities of our renowned Litigation Department, our Investment Management Litigation Group helps globally leading and emerging asset management firms—including private equity firms, credit funds, hedge funds and venture capital firms—and their general partners and portfolio companies safely navigate a wide range of disputes, regulatory inquiries, and investigations.
Integrated seamlessly with our market-leading Private Equity and Private Funds teams, we offer significant advantages to asset managers and their portfolio companies in myriad litigation, investigatory and advisory matters. Gleaned over decades as go-to counsel for the industry, our litigators’ familiarity with complex financial products and investment structures and understanding of the private equity investment life cycle and market trends at play allow us to tackle problems efficiently and commercially and give us a nuanced understanding into what matters most to industry participants.
DISPUTE RESOLUTION
Our Investment Management Litigation team has handled the full spectrum of disputes, ranging from the defense of multibillion-dollar claims and high-stakes investor suits to partnership and employment-related disputes. Our industry experience is unparalleled and spans investor and deal disputes, complex commercial litigation and arbitrations, Delaware fiduciary litigation, and antitrust, data privacy, IP-related and other serious matters. We have achieved successful outcomes in the most sensitive upper-tier disputes, as well as in the most complex fiduciary matters involving investment funds and portfolio companies.
We also routinely represent investment managers in restructuring litigation, including in matters in bankruptcy courts and Delaware Chancery Court for claims for breach of duty, and many other types of disputes.
REGULATORY & INTERNAL INVESTIGATIONS
Our firm has long been go-to counsel for the investment management industry, leveraging decades of experience in handling multifaceted internal investigations, regulatory enforcement proceedings and white collar defense matters. We have guided investment management clients through the successful resolution of matters involving a broad array of state and federal government authorities, including the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC), as well as federal and state regulatory and self-regulatory authorities, including the Financial Industry Regulatory Authority (FINRA), among many others. Our Investment Management Litigation team is comprised of industry experts and draws on the unparalleled star talent of our government enforcement and investigations practice.
We are also well-known for our successful handling of internal investigations on behalf of our investment management clients, as well as their portfolio companies and boards of directors. We are skilled crisis managers, helping clients safely navigate potentially damaging reputational risks, including as a result of whistleblower complaints and Congressional or other government investigations.
STRATEGIC RISK ADVISORY
We work across practices to provide holistic, pragmatic advice aligned with our clients’ business goals. We advise investment managers and their principals in matters that arise in the course of day-to-day business, including commercial and proactive counsel regarding litigation, compliance and fiduciary risks related to potential investments and transaction structures, the implications of contested restructurings, emerging regulatory compliance concerns, and any area affecting the investment management industry.
Our investment management-focused litigation and investigations expertise also includes:
- Representing managers, portfolio companies and creditor groups in high-stakes shareholder, commercial, antitrust and employment litigation
- Delaware fiduciary litigation
- Bankruptcy- and distress-related claims
- Indemnification, purchase price and earn-out disputes
- Litigating and arbitrating post-purchase disputes
- Internal and government investigations
- Litigation due diligence
- Advising on arbitration and indemnification provisions
- Advising on compliance and fiduciary risks
Recent
Experience
Recent Engagements
- AEA Investors LP, a private equity fund, in a putative class action filed by shareholders of AEA portfolio company Evoqua Water Technologies arising out of Evoqua’s initial and secondary public offerings.
- Apollo Global Management in:
- a securities action in the District of Nevada regarding the sale of “timeshare points” by its subsidiary, Diamond Resorts International. The plaintiffs, several individuals who own various numbers of “points” purchased from Diamond, allege that in selling points-based timeshare memberships, Diamond is essentially selling unregistered securities;
- in the dismissal of a stockholder class action in Nevada state court in connection with the acquisition of U.S. golf resort owner-operator ClubCorp Holdings by an Apollo fund. Stockholders allege that the ClubCorp directors breached their fiduciary duties in agreeing to the acquisition and that Apollo aided and abetted that breach; and
- in successfully obtaining summary judgment in claims asserted arising out of placement agent relationships, including resolving regulatory matters with no penalty or other regulatory action.
- Bain Capital LLC against claims that they aided and abetted a breach of fiduciary duty in connection with a series of transactions through which Bain acquired a controlling stake in Surgery Partners, Inc. to help fund its acquisition of a third party, National Surgical Healthcare.
- Baupost Group LLC in connection with a Delaware Court of Chancery books and records complaint and a potential shareholder merger litigation.
- Blackstone in:
- a landmark appellate victory in Kentucky Supreme Court in a $50 billion derivative claim related to the Kentucky state pension system, and in follow-on litigation brought by the Kentucky Attorney General which is ongoing.
- a significant victory in the Delaware Court of Chancery when the court dismissed with prejudice a consolidated derivative lawsuit brought by purported stockholders of Zimmer Biomet Holdings, Inc.
- Cadre in connection with a contract dispute with an investment partner in in New York Supreme Court regarding a real estate investment joint venture.
- Gamut Capital in connection with a dispute with a former executive/co-investor of a portfolio company in Delaware Court of Chancery regarding non-compete and related violations.
- Kohlberg & Co., LLC and certain affiliates in securing the dismissal, affirmed on appeal, of a stockholder derivative action brought by a pension fund shareholder against home infusion services provider BioScrip, Inc., a company in which Kohlberg owned 26% of its shares, alleging that certain current and/or former directors and officers violated various federal and state laws in allegedly causing BioScrip to engage in a drug sales kickback scheme.
- Lux Capital and its directors in investor litigation in New York state court seeking to enjoin a premium buy-out transaction and merger. The plaintiffs sought to enjoin the transaction pending an arbitration proceeding challenging the transaction as invalid under Lux Capital’s governing agreements. After the court refused to enter any preliminary injunctive relief at an initial hearing, the plaintiffs ultimately withdrew their injunction request and voluntarily dismissed the suit.
- Oak Hill Capital Partners in a landmark trial victory in the Delaware Court of Chancery, marking the first time the Chancery Court has concluded at trial that defendants satisfied the exacting “entire fairness” standard, which places the burden on the defense to prove that the transaction at issue was entirely fair – in both process and price – to the corporation’s shareholders. The decision came in a long-running dispute related to Oak Hill’s investment in Oversee.net, in which it owned preferred stock and a majority of the common stock.
- Oaktree Capital Management in:
- the dismissal, with prejudice, of a putative class action concerning Oaktree’s sale of Tribune securities based on insider trading allegations;
- a Second Circuit victory, affirming the dismissal of three shareholder derivative claims and a putative class action related to the 2014 merger of Oceanbulk Carriers and Star Bulk Carriers, an Oaktree portfolio company; and
- defeating an appellate challenge of Oaktree’s summary judgment win in its dispute with a Taiwanese shipping magnate.
- Omega Advisors and its founder, Leon Cooperman, in the successful settlement of claims filed by the Securities and Exchange Commission based on allegations of insider trading and late filings of statements of beneficial ownership. After a six-year investigation, our clients agreed to a settlement that did not involve any admissions of wrongdoing, required disgorgement of less than half of the alleged trading gain, and in a significant break from SEC precedent, did not include any bar or suspension – something virtually unheard of for an investment adviser.
- Numerous hedge fund and private equity fund clients in sensitive internal investigations and regulatory matters involving the SEC, the New York Attorney General, the New York Department of Financial Services, and the DOJ, including various clients in connection with:
- A cause exam related to a short selling campaign;
- A cause exam related to a whistleblower complaint;
- A cause exam related to meme stock trading;
- An upper tier dispute;
- A whistleblower matter; and
- Various internal investigations relating to securities laws violations, #MeToo allegations, and others.
