New York – (HedgeCo.net): Shawn Carter, known by his legions of adoring hip-hop fans as rapper Jay-Z, has sued Dallas-based hedge fund firm, Highland Capital Management, LP, according to a story published by Bloomberg. The rap mogul, who also founded Rocawear, a clothing line, is seeking damages as a result of a loan guarantee made by the fund.
The dispute arises from a $52 million loan Carter and several associates obtained in relation to a boutique hotel they planned to build in Manhattan’s Chelsea neighborhood. That loan, which went into default in August, is currently held by Highland.
According to the suit filed in federal court in New York, Carter and his associates claim that Highland and NexBank SSB are attempting to recover funds from them in excess of what they initially agreed to allocate to the project. Carter seeks verification from the court that he has met his obligations, as well as an additional $3.7 million in interest.
Despite Jay Z’s reputation, Highland Capital Management may be the real “g’s” in this situation. In 2009, Highland was accused of “holding investors hostage” and refusing to return capital invested in the fund to continue to generate fees. However, some have mentioned that Highland Capital Management’s actions might be a marketing ploy, attempting to increase “street cred” for future hedge fund releases.
Dave Thompson
For HedgeCo.net
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