Paul Singer’s activist investment hedge fund firm Elliott Investment Management has won a legal battle compelling a Texas-based private equity firm to begin liquidating an oil and gas fund, according to a report by Bloomberg.
Delaware Chancery Court Judge Bonnie David ruled that Stronghold Investment Management breached a prior settlement with Elliott by failing to sell all assets by agreed deadlines. The judge instructed the parties to submit a plan for winding down the two partnerships managing Elliott’s investment, known collectively as Fund II.
The dispute began in September when Elliott sued Stronghold, alleging excessive fees and breach of contract for refusing to liquidate the partnerships. Stronghold countered that forced liquidation would harm other investors, requiring asset sales at discounted prices, and denied overcharging Elliott, citing strong returns.
Judge David rejected Stronghold’s argument, noting that the previous settlement “does not permit Stronghold to delay all asset sales indefinitely.” Stronghold has indicated it intends to appeal the ruling.
