Connecticut Retirement Plans and Trust Funds, Hartford, filed a lawsuit in state superior court today against Forstmann Little, seeking to recover more than $100 million in state pension money managed by the private equity firm. The move was widely anticipated after the fund announced in January that it had hired the law firm of Paul, Hastings, Janofsky & Walker to examine possible litigation against Forstmann Little.
State Treasurer Denise L. Nappier and Attorney General Richard Blumenthal said at a news conference that Forstmann Littles investments in telecommunications companies McLeodUSA Inc. and XO Communications Inc. violated Forstmann Littles contract with the state, and the company "misled, misrepresented and concealed information regarding the nature of their investments.
The lawsuit deals with Forstmann Littles valuations of McLeod and XO, how much money Forstmann Little invested in the new ventures and which funds the firm tapped for those investments.
Forstmann Little released a statement calling Connecticuts lawsuit "totally without merit and promising to defend itself "vigorously.