Jefferies Strategic Investments and Leucadia Asset Management Holdings have won a major legal victory against George Weiss, after a federal judge ruled that the hedge fund founder is personally liable for millions in unpaid debts tied to the collapse of Weiss Multi-Strategy Advisers, according to a report by Investment News.
Founded in 1978, Weiss Multi-Strategy Advisers was once one of the industry’s most respected firms, managing over $2bn in assets. However, a combination of lavish executive spending, declining performance, and mounting debts led to its dramatic shutdown in early 2024.
On 29 February, 2024, Weiss shocked his team in a Zoom call, instructing portfolio managers to liquidate all positions. Despite declining assets, executives allegedly continued flying on private jets and distributing six-figure bonuses, while Chief Investment Officer Jordi Visser faced criticism for focusing on his personal brand instead of stabilising operations.
The final blow came when Leucadia, a strategic partner of Jefferies, demanded repayment on outstanding loans. With no funds to meet its obligations, Weiss Multi-Strategy Advisers filed for Chapter 11 bankruptcy in April 2024, leaving creditors and employees – some owed millions in deferred compensation – scrambling.
Before the bankruptcy, Weiss signed a Forbearance Agreement in February 2024 with Jefferies and Leucadia, seeking to delay payments on $53m in debts tied to a 2018 Strategic Relationship Agreement (SRA) and two Note Purchase Agreements (NPAs).
Crucially, Weiss signed the agreement both personally and on behalf of the firm, with provisions explicitly binding him. Judge Alvin K Hellerstein of the US District Court for the Southern District of New York ruled firmly in favour of Jefferies and Leucadia, granting summary judgment against Weiss.
Weiss attempted several legal defences, arguing duress, lack of consideration, and lack of mutual assent, all of which were rejected. His claims that he signed the agreement under coercion, citing threats of lawsuits and reputational damage, were dismissed as insufficient to establish economic duress, especially given his status as a seasoned financial professional with legal representation.
The ruling strengthens Jefferies and Leucadia’s position in ongoing bankruptcy litigation, where Leucadia has accused Weiss of treating the hedge fund as a “personal piggy bank”, citing $28m in executive bonuses paid while the firm was insolvent.
