The San Diego Country Employees Retirement Association, which lost more than $100 million in the Amaranth collapse, is considering bringing a lawsuit over the loss, Josh Gerstein at the New York Sun reports. Uh-oh. This may prompt a series of lawsuits, as Amaranth’s investors may find themselves in a race to the courthouse to grab whatever dollars might be left over—either at Amaranth itself or with its money managers. There’s a limited pool of money out there, and an almost unlimited number of plaintiffs lawyers who will be all too eager to carve legal fees out of the carcass of Amaranth.
The big looming threat—fraudulent transfer lawsuits. What happens if a court decides that Amaranth shouldn’t have liquidated its assets on the way out? The picture of our courts second guessing Amaranth’s investment and divestment decisions, and also deciding on the legality of Amaranth’s end days redemptions and spending is not a pretty one.
Lawyers Circle After Failure Of Hedge Fund
[New York Sun]
Posted by kip, Oct 20, 2006 2:25PM
Its kind of unnerving to see how much money that Amaranth likely made for the good old people of SDC. I'd wager that this is their own CYA policy of their own leadership.
Pigs get fat but hogs get eaten and looks like the SDC forgot to get out early enough.