(Updates with Tetragon comment in fourth paragraph.)
Aug. 8 (Bloomberg) -- Leon Cooperman’s Omega Partners lost its lawsuit against Tetragon Financial Group Ltd. over the 2012 purchase of hedge-fund firm Polygon Management LP.
Omega Partners failed to state a claim against Guernsey, Channel Islands-based Tetragon, U.S. District Judge Richard Sullivan in Manhattan said in a ruling issued today.
Omega, based in New York, claimed that Tetragon’s co- founders, Patrick Dear and Reade Griffith, made tens of millions of dollars from the sale of Polygon, which they owned, for 11.7 million nonvoting Tetragon shares. The defendants then used $150 million of Tetragon’s cash to buy back nonvoting Tetragon shares, according to the lawsuit.
“We are pleased that this nuisance lawsuit has been dismissed,” Jonathan Gasthalter, a spokesman for Tetragon at Sard Verbinnen & Co., said in an e-mailed statement. “Tetragon remains focused on creating long-term value for all of its shareholders.”
Dear and Griffith co-founded Polygon in 2002 and Tetragon in 2005, according to Tetragon’s website. Tetragon invests in assets including collateralized loan obligations.
The 2013 shareholder lawsuit was filed against company officials on behalf of Tetragon by Omega Partners, which said it’s in the biggest outside investor.
Omega had sought unspecified damages on behalf of Tetragon and an order directing Tetragon’s board to reform its corporate governance practices and altering the Polygon transaction to prevent the alleged illegal diversion of its assets.
Sullivan said in his ruling that he was rejecting Omega’s “backdoor” route to a claim that was barred by a prior U.S. Supreme Court decision.
A. Rick Atwood Jr., a lawyer representing Omega in the lawsuit, didn’t immediately respond to a voice-mail message left at his office seeking comment on the ruling.
The case is Omega Overseas Partners Ltd. v. Griffith, 13- cv-4202, U.S. District Court, Southern District of New York (Manhattan).