Venture Capitalist Likens Working With Co-Founder To "Working With A Retarded Person"

Among other things!

As you can maybe imagine, Hugo Van Vuuren and Patrick S. Chung aren't on, like, the absolute best of terms right now.

A complaint filed on Friday in Santa Clara County Superior Court in California by Hugo Van Vuuren, one Xfund founder, against Patrick S. Chung, the other founder, and the fund itself, includes accusations of secret contract amendments, bullying and schoolyard name-calling. Mr. Chung called Mr. Van Vuuren a “spiteful moron” and “a trivial person pursuing trivial things” in emails, according to court documents. Mr. Chung also wrote that working with Mr. Van Vuuren was “like working with a retarded person” and that Mr. Van Vuuren would be worth more “dead than alive once we have key-man insurance.” [...] Mr. Van Vuuren claims in his suit that Mr. Chung committed fraud by secretly amending their partnership agreement to take full control of Xfund’s investments, operations and governance.

Dispute at Xfund, a Venture Capital Fund, Bursts Into the Open [Dealbook]


Highland Capital Management Founder Sees Your Hiding Of Assets And Raises You A Megalomaniacal Prick

As some of you may recall, back in March, Highland Capital Management founder and CEO James Dondero testified that he is "insolvent under Texas family law, if not according to normal accounting rules," despite a 2010 tax return showing his adjusted gross income that year to be in excess of $36 million. The reason his finances were in question was because Dondero filed for divorce in September, and how much he owes his wife Becky is currently in dispute. Becky is "seeking enforcement of a prenuptial agreement guaranteeing her half of the couple’s community property, capped at $5 million," plus "spousal support and interim attorney fees." James, perhaps you can glean, is hoping it will be less than that and perhaps even nothing. One thing that really didn't help? Patrick Daugherty, a former senior portfolio manager at Highland who quit in October, testified that he met with James Dondero for drinks last month. “He told me his plan was to get his net worth down and pay her as little as possible,” said Daugherty, who was called to the stand by Becky Dondero. That testimony was given on March 28th. On April 11, this happened: Highland Capital Management, the $20 billion hedge fund and private equity firm based in Dallas, has launched a lawsuit that calls its former private equity investing chief a “megalomaniacal” manager who engaged in “abusive tirades” that “dehumanized employees.” Patrick Daugherty is the former head of stressed special situations and private equity at Highland Capital Management, where he was responsible for $8 billion of assets until he resigned in September 2011. Known as a blunt-speaking Texan, Daugherty has served on the board of Metro-Goldwyn-Mayer and as chairman of companies like Cornerstone Health Group. According to a 14-page complaint Highland filed in Texas state court in Dallas earlier in April, Daugherty has been paid in excess of $26 million while at the firm, but voluntarily resigned after “Highland refused to accede to his unacceptable ultimatums and megalomaniacal demands regarding compensation.” The lawsuit claims that Daugherty was “belligerent to peers” and that Highland employees complained and even quit after Daugherty publicly berated them as “‘f—ing idiots’” and disparaged them using other vulgarities. Highland, which has a reputation in the investment community for using hard-hitting tactics, pulls no punches in a lawsuit that at times can appear cruel. It claims that Daugherty’s tenure at Highland was characterized by extreme behavior and his performance diminished over the years as he “became increasingly unmanageable, erratic, and insubordinate.” It didn't have to be this way, Patrick! $20 Billion Highland Capital Calls Former Private Equity Chief "Megalomaniacal" [Forbes]