Court Dismisses Hedge Fund Manager's Unwritten Contract Claim Against LLFW's Client.

LLFW obtained a summary judgment ruling dismissing the claims of a hedge fund management company, which alleged that it had an unwritten contract with LLFW's client, a money center investment bank. The ruling from the Court of Common Pleas, Philadelphia County, Pennsylvania dismissed the lawsuit, which challenged certain margin calls issued by the investment bank to two municipal bond hedge funds in February 2008.

Plaintiff, the investment manager of the hedge funds, alleged that it had an unwritten contract with the defendants, separate from the bank's contracts with the hedge funds, that allowed it to sue in its own right for alleged defects in margin calls issued to the funds.

The Court held that there was no separate unwritten contract between the defendants and the hedge funds' manager, and that the written financing agreements between the investment bank and the hedge funds left no room for an additional implied or oral agreement with the manager regarding the hedge funds' financing.

The Court also held that the manager's alleged damages were not recoverable because they did not flow directly from any alleged misconduct by the defendants and therefore were solely derivative of the hedge funds' losses.

In addition, the Court dismissed plaintiff's claim for misappropriation of confidential information and unfair competition, holding that there was no evidence that defendants improperly used the manager's or the hedge funds' confidential information.

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