Highland Capital Management is suing Geoffrey Stern, president of Muirfield Capital Management, claiming that Mr. Stern defamed Highland by knowingly making false statements in a news story.
The lawsuit, filed in New York State Supreme Court in Manhattan, references an October article in the Wall Street Journal about a dispute over a hedge fund managed by Highland Capital Management that was ultimately liquidated.
In that story, Mr. Stern alleges that Highland took a secret $30 million fee out of the fund.
“Just when you think you've seen it all, Jim Dondero comes up with a new twist,” said Mr. Stern of the co-founder and president of Highland, in the article. “They just took our money.”
The complaint said Mr. Stern's statement exposed Highland Capital Management to “public hatred, ridicule and disgrace.”
Highland Capital is asking in the lawsuit for a court order barring Mr. Stern from making similar future statements and is seeking unspecified punitive damages.
"It's a nuisance lawsuit,” said Mr. Stern in a interview. “It is completely without merit.”
Mr. Stern had sued Highland in the Bermuda court system back in 2011, which resulted in the hedge fund being put into liquidation.
A Highland Capital Management spokeswoman said Mr. Stern's published statement was, “an affront to the foundation of our business, and we therefore cannot let it go uncorrected. Our legal action was necessary to correct the public record and defend the reputation of our firm.”
Highland has $15.4 billion in assets under management.