Hedge Fund Jay-Z

Hedge Fund Jay-Z

Rapper Jay-Z Sues Hedge Fund over Delayed Loan

It seems for hedge funds better performance brings more lawsuits.  The latest high-profile lawsuit involving a hedge fund has been filed by rap star Jay-Z.  Shawn Carter (Jay-Z) had hoped to build the J Hotel on West 21st Street in New York City, but a loan from a hedge fund has caused difficulties in the real estate deal.  Carter has accused Highland Capital Management of delaying a loan so that the firm could still collect interest payments.
The loan came due in August, and discussions through November failed to produce an agreement on a restructuring of the loan. Jay-Z and his partners, who guaranteed the interest and other carrying costs of the loan but not its principle, proposed handing over the property in lieu of foreclosure, as well as more than $4 million to settle disputed payments and transfer costs.
According to the lawsuit, which seeks more than $3.7 million in damages, filed in Manhattan federal court, Highland and Dallas-based NexBank SSB acted in bad faith, delaying the deal to “bleed additional funds.” The loan was accruing about $20,000 per day in interest and carrying costs.
The lawsuit also seeks a judgment declaring that Jay-Z and the other guarantors have fulfilled their obligations.  Source

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