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Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
New York Court Dismisses Investor Lawsuit Against Philip Falcone and Harbinger Capital
- Client News
- March 30, 2015
Judge Alison Nathan of the Southern District of New York
dismissed with prejudice all direct, putative class action claims
brought against Paul, Weiss client Philip Falcone and the general
partner and management entities for six private investment funds
operated by Paul, Weiss client Harbinger Capital Partners. The
court declined to exercise supplemental jurisdiction over the
remaining state law derivative claims and dismissed them without
prejudice. The plaintiffs, a putative class of all persons who
acquired limited partnership interests in the funds, claimed that
the defendants made fraudulent and/or grossly negligent
misstatements and omissions to investors, in violation of
defendants' fiduciary duties, with respect to the funds'
investments and positions in LightSquared Inc., formerly a publicly
traded telecommunications company called SkyTerra Communications,
Inc., which the funds acquired and took private in 2010, and which
filed for bankruptcy protection in May 2012.
Judge Nathan had previously dismissed the plaintiffs' claims to the extent they were predicated on the purchase of SkyTerra on the grounds that those claims, brought under state law, were precluded by the Securities Litigation Uniform Standards Act of 1998 (SLUSA), but allowed the plaintiffs to amend their complaint to replead their remaining allegations. Judge Nathan adopted nearly all of the defendants' reasoning to dismiss the amended complaint, holding that the plaintiffs' repleaded fraud and negligence claims were still precluded by SLUSA because their allegations, arising while LightSquared was private, were "inevitably intertwined" with their allegations regarding the purchase of SkyTerra and that the direct breach of fiduciary duty claims were subject to, but did not meet, the heightened pleading standards of Rule 9(b).
The Paul, Weiss team included litigation partners Daniel Leffell and Leslie Fagen and counsel Steven Herzog.