A Delaware Chancery Court has dismissed without prejudice a lawsuit by the $1.9 billion Houston Municipal Employees Pension System against Highland Capital Management and J.P. Morgan Chase over the failure of Highland’s flagship hedge fund, the Highland Crusader Fund.
The pension plan sued Highland and J.P. Morgan Chase and J.P. Morgan Investor Services, which administered the fund, in early 2011, arguing the companies misled investors about the financial health of the Highland Crusader Fund and engaged in actions aimed at benefiting Highland over the fund’s interests.
Megan D. McIntyre, a plaintiff’s attorney with Grant & Eisenhofer, said in a telephone message that the retirement fund agreed to drop the lawsuit because of a decision by investors in July to distribute the assets of the fund.
“The dismissal of the case does not mean the claims were not meritorious,” she said. “It simply means that the Crusader Fund investors as a group approved a plan of distribution that releases the fund’s claims against Highland Capital Management.”
Rhonda Smith, executive director of the Houston Municipal plan, could not be reached for comment. Highland representatives did not respond to requests for comment.
Highland Capital Management has $24 billion in assets under management, according to a news release from the firm announcing the lawsuit’s dismissal.