New York court dismisses shareholder class action against Bermuda and BVI fund companies (again)

A US District Judge in New York has dismissed (for the second time, after an appeal set aside her first dismissal judgment) a US$3 billion class action lawsuit asserted by the shareholders in two “feeder funds” that invested with Bernard Madoff.

In a 145-page decision released on 29 September 2016, District Judge Deborah Batts found that the shareholders lacked standing to pursue their 28 pleaded heads of claims against Tremont Group Holdings Inc and Kingate Management Ltd., and other consultants, administrators and auditors for Kingate Global Fund Ltd and Kingate Euro Fund Ltd.

Applying the laws of Bermuda and the British Virgin Islands, District Judge Batts concluded that the shareholders’ claims overlapped with the claims belonging to the Kingate funds themselves (who were the proper Plaintiffs to any such claims), and that letting them go forward could result in an impermissible “double recovery”.

 

 

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