11th Circ. Nixes Funds' Suit Over CompuCredit Dividends

Law360, New York (April 25, 2012, 6:07 PM EDT) -- The Eleventh Circuit on Wednesday tossed claims brought by hedge funds alleging CompuCredit Holdings Corp. unlawfully handed out dividends to company insiders while in financial distress, ruling a standard no-action clause in the noteholder agreements barred the suit.

A three-judge panel reversed and remanded for dismissal a Georgia federal judge's decision that had denied CompuCredit's motion to dismiss the suit, finding the plain language of the no-action clause stated that noteholders were prohibited from bringing the suit.

“Because we find no persuasive, legally grounded reason to...
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