After Trial, Delaware Court Rules that Hedge Fund Breached Fiduciary Duties to BSF Client Lerner Master Fund
Following a four-day trial, the Delaware Chancery Court issued a 101-page opinion in favor of BSF client Lerner Master Fund in a lawsuit against hedge fund manager Paige Capital Management, which had invoked contractual hedge fund gates to block Lerner from redeeming its $40 million seed investment in Paige.
The Court found Paige liable for breach of contract and breach of its fiduciary duty of loyalty to Lerner, and ordered it to return Lerner’s capital immediately with interest; refund all management and incentive fees received during the litigation; and return all legal fees it advanced to itself from the hedge fund. The Court dismissed all of Paige Capital’s claims against Lerner.
Please follow the below links for media coverage of the ruling.
Law360 [subscription], August 9, 2011
Hedge Fund To Repay $40M To Cleveland Browns Owner
Bloomberg, August 9, 2011
Cleveland Browns’ Lerner to Get Fund Investment Back, Delaware Judge Rules