Jury Backs Bayou In $13M Clawback Row With Hedge Funds

Law360, New York (May 13, 2011, 6:46 PM EDT) -- Rejecting the good faith defense put forward by investors that cashed out of Bayou Group LLC well before the $450 million Ponzi scheme's collapse, a New York federal jury on Thursday said the investors must return $13 million in principal to the bankrupted Bayou estate.

Following an eight-day trial, thejury determined that hedge funds Heritage Hedged Equity Fund LP and Redwood Growth Partners LP, investment company D. Canale & Co., and four other investors cannot keep the $13 million, rejecting claims that the investors redeemed their...
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