Colbeck Capital Management is a New York-based investment firm that specializes in middle market private credit. In 2015, Colbeck was sued by Relativity Media, a film production and distribution company, for breach of fiduciary duty and other claims. The lawsuit alleged that Colbeck executives had aided and abetted Relativity founder Ryan Kavanaugh in a fraudulent scheme to misspend millions of dollars in loan proceeds.
The lawsuit alleged that Colbeck executives had turned a blind eye to Kavanaugh’s misuse of loan proceeds, which included using the money to fund his personal lifestyle and to pay off debts from other failed business ventures. The lawsuit also alleged that Colbeck had failed to adequately monitor Relativity’s financial condition and had provided misleading information to investors about the company’s health.
The Colbeck Capital lawsuit was settled out of court in 2017 for an undisclosed amount of money. However, the settlement did not include any admission of wrongdoing by Colbeck.
FAQs:
Q: What is Colbeck Capital Management?
A: Colbeck Capital Management is a New York-based investment firm that specializes in middle market private credit.
Q: What is the Colbeck Capital lawsuit about?
A: The Colbeck Capital lawsuit alleged that the firm had aided and abetted Relativity Media founder Ryan Kavanaugh in a fraudulent scheme to misspend millions of dollars in loan proceeds.
Q: What was the outcome of the Colbeck Capital lawsuit?
A: The Colbeck Capital lawsuit was settled out of court in 2017 for an undisclosed amount of money. However, the settlement did not include any admission of wrongdoing by Colbeck.
Q: Is Colbeck Capital Management still in business?
A: Yes, Colbeck Capital Management is still in business.
Q: Who are the principals of Colbeck Capital Management?
A: The principals of Colbeck Capital Management are Jason Colodne and Jason Beckman.
Conclusion
The Colbeck Capital lawsuit was a major scandal in the private credit industry. The lawsuit alleged that Colbeck executives had turned a blind eye to Ryan Kavanaugh’s misuse of loan proceeds, which included using the money to fund his personal lifestyle and to pay off debts from other failed business ventures.
The Colbeck Capital lawsuit was settled out of court in 2017 for an undisclosed amount of money. However, the settlement did not include any admission of wrongdoing by Colbeck.
The Colbeck Capital lawsuit is a cautionary tale for investors in private credit funds. Investors should carefully scrutinize the track record of any fund manager before investing their money.
References:
- Variety: https://variety.com/2019/biz/news/ryan-kavanaugh-ponzi-scheme-elon-spar-lawsuit-1203235781/
- Deadline: https://deadline.com/2016/01/relativity-joseph-nicholas-unsecured-creditors-500m-fraud-case-colbeck-capital-1201686006/
- 9fin: https://www.colbeck.com/jason-colodne
- Colbeck Capital Management Website: https://www.colbeck.com/news
