The Wall Street Journal recently published an article titled “Burned Carlyle Investor Backs Suit Against Private-Equity Firm.”
The plaintiff is Louis J.K.J. Reijtenbagh, a Dutch investor who lost $60 million investing a fund titled Carlyle Capital Corporation, Ltd. Carlyle Capital Corporation invested residential mortgage backed securities (MBS) tied to home mortgages in the United States. In 2008 when the housing market collapsed, Carlyle Group was forced to liquidate the fund.
In addition to Reijtenbagh and his affiliated companies suing Carlyle, there is also an entity representing the interests of other shareholders called Defendant Stichting Recovery CCC (“SRCCC”). A “stichting” is a corporate entity formed to pursue what would be considered a class action suit in the US. The formation of this entity speaks to the fear class action lawyers and firms have for litigation finance.