In a pair of recent lawsuits in the United States District Court for the Southern District of New York, VCG Special Opportunities Master Fund, Ltd. (VCG or CDO Plus), an Isle of Jersey, U.K.-registered hedge fund of approximately $50 million in assets and a credit default swaps (CDS) seller previously known as “CDO Plus Master Fund Ltd.,” sued Citibank, N.A. and Wachovia Bank, N.A., both CDS buyers, raising similar claims against each bank.  VCG alleged that both banks had purchased CDS contracts from VCG, each covering a different credit default obligation for the amount of $10 million, and that each had made unwarranted and bad faith demands for additional credit support, i.e., margin calls.  These lawsuits are part of a growing wave of credit default swap litigation and highlight the need for caution in this area.