Nursing Home Foundation Sues Highland Capital For Repayment

The Amarillo Globe-News reports that the Mary E. Bivins Foundation is suing the Highland Credit Strategies Fund and Dallas-based Highland Capital Management to reclaim the nearly $2 million it invested in the fund three years ago. Back then, the fund’s shares were worth about $20 each, the suit alleges. A quick check this morning indicates its shares are worth $5.71 each. What exactly does the Amarillo-based foundation do? It funds nursing homes. Arg.

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One response to “Nursing Home Foundation Sues Highland Capital For Repayment”

  1. N says:

    Well, they should know that any investment – whether it be stocks, mutual funds, commodities, etc. – bears a certain degree of risk. Yes, hedge funds are usually less risky because of a long-term commitment, where returns can be realized after the commitment term is complete. However, the state of the economy wiped away any of the cushion of risk by investing in a hedge fund. Nearly every investment firm got hit hard. As large and prominent as Highland is, they could not avoid the troubles of the banking, mortgage and real estate industries.

    Now, if Highland can be proven to have been negligent in its management of the fund, primarily by the partners and principals, the Foundation may have some grounds for the suit. However, like any investment nowadays, you’re lucky if you break even when you sell. Unfortunately this foundation lost quite a bit of money, but they should have known the risk when entering into the commitment.

    My gut says that this lawsuit will not make it to trial.