WILMINGTON, DEL. (CN) – Investors have filed a class action against two hedge funds and their manager, Citigroup. They claim Citigroup’s offer for MAT Five LLC and Municipal Opportunity Fund Five LLC is a self-serving, overly secretive $246 million deal that will cash them out at 23 cents per share, while failing disclose an SEC inquiry into Citigroup hedge funds.
MAT is or was a private hedge fund that supposedly offered safe returns through MOF Five, “an affiliated fund that implements municipal bond arbitrage strategies,” both of them managed by Citigroup. “Under the guise of a self-tender offer recently commenced by MAT Five, Citigroup intends to acquire as many shares of the Company as possible, capitalize on the appreciation of the assets and investments so acquired, and continue the ongoing liquidation of the Company. In addition, investors who tender their shares must accept the terms of an extremely broad general release that covers any conceivable claims that could be brought against any of the defendants or their affiliates.
“In this action, plaintiffs charge defendants with breaches of fiduciary duty arising out of their self-dealing and failure to disclose all material facts in the Tender Offer, including information regarding a pending SEC inquiry into Citigroup’s hedge funds.” the complaint states.
Plaintiffs are represented in Chancery Court by Rosenthal, Monhait & Goddess.
Here are the defendants: MAT Five LLC, Municipal Opportunity Fund Five LLC, Citigroup, Citigroup Alternative Investments LLC, Citigroup Fixed Income Alternatives LLC, and Reaz Islam.