In the lawsuit filed with the U.S. Bankruptcy Court in Manhattan, PlusFunds contended S&P violated the terms of a license agreement by terminating the Hedge Fund Index on June 30. It asked a judge to order S&P to sell its copyright and other proprietary rights involving the index to Plusfunds for $1.

PlusFunds, which has said it expects to go out of business by the end of the month, has said that if it obtains those rights it can sell them for a “substantial” profit. It filed its lawsuit Wednesday, just as U.S. Bankruptcy Judge James M. Peck ruled that S&P’s termination of its agreement with PlusFunds didn’t violate bankruptcy laws.

The company filed a voluntary petition under chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of New York. This agreement is subject to an auction seeking higher or better offers pursuant to the bid procedures established by the Court.

In terminating the Hedge Fund Index, S&P said PlusFunds’ data had become unreliable partly because as many as eight of the 40 managers whose funds were tracked by the index had ended their dealings with PlusFunds. In addition, it said, some of the data PlusFunds provided last month contained “material errors” that were caught only because of S&P’s vigilance.

Dow Jones Newswires stated that PlusFunds objected to the termination of its agreement with S&P, saying S&P “knowingly and intentionally” broke bankruptcy law by deciding unilaterally to kill the hedge fund index. That decision gives “PlusFunds a claim for compensatory and punitive damages,” Plus Funds said in court papers earlier this month.

Alex Akesson
Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net

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