New York Appellate Division Dismisses Investors’ Complaint Against Corey Ribotsky and Hedge Fund AJW Qualified Partners, Holding that Fund’s Decision to Suspend Redemptions Did Not Constitute a Breach of the Fund’s Operating Agreement or a Breach of Fiduciary Duty

Plaintiffs are Steven Mizel and his limited partnership which invested, in the aggregate, about $1.6 million with hedge fund AJW Qualified Partners, LLC (Fund).  During the market turmoil of late 2008, plaintiffs sought to redeem their investments in the Fund.  In response to a wave of redemption requests, in October 2008, the Fund froze all redemptions and sought to reorganize.  Plaintiffs brought suit, alleging anticipatory breach of contract by the Fund and breaches of fiduciary duty by the Fund’s manager and its principal, Corey Ribotsky.  The trial court denied the defendants’ motion to dismiss.  The Appellate Division reversed and dismissed the plaintiffs’ complaint in its entirety, holding that the suspension of redemptions was permitted by the Fund’s operating agreement.  We summarize the decision.

To read the full article

Continue reading your article with a HFLR subscription.