Liquidators of Ex-Harvard QB’s Funds Sue Barclays for $80 Million

The liquidators of a pair of failed Cayman Islands-based hedge funds run by a former Harvard quarterback are suing Barclays PLC to claw back some $80 million they say was illegally funneled to the bank to cover margin calls, The Wall Street Journal reported. The offshore funds--ICP Strategic Credit Income Fund Ltd. and ICP Strategic Credit Income Master Fund Ltd. -- were so-called feeder funds managed by ICP Asset Management LLC, a money-management firm founded by Thomas C. Priore. Lawyers for the liquidators said in a suit filed in U.S. Bankruptcy Court in New York that Mr. Priore, ICP’s 46-year-old founder and former Harvard University quarterback, fraudulently transferred more than $40 million to Barclays to cover margin calls at a troubled collateralized debt obligation known as Triaxx. “Barclays knowingly participated in ICP Asset Management’s and Priore’s fraudulent purposes,” lawyers for the liquidators said. “Barclays knew that during the first half of 2008, ICP Asset Management and Priore caused other investment vehicles they managed to make over $40 million in fraudulent transfers to Barclays to cover Triaxx Funding’s margin obligations.” In U.S. bankruptcy proceedings, a judge can find certain transfers or payments to be fraudulent if a company was insolvent when taking on new liabilities. The $80 million liquidators are seeking comes from the addition of interest and damages. Read more. (Subscription required.)