United Development Funding filed an appellate brief in the Texas Judicial Branch Fifth Court of Appeals in the matter of J. Kyle Bass, et. al. versus United Development Funding, L.P., et. al.
As previously reported, UDF claims that its funds were damaged by disparaging statements made by defendants Bass and Hayman Capital, the investment firm controlled by Bass, including that it operated as a Ponzi scheme, which the company vigorously denies.
In late 2015, Bass allegedly anonymously authored and posted a series of online reports on an investor networking website that detailed unsubstantiated claims against UDF that sent stock prices plummeting.
The firm contends that Bass and Hayman Capital instigated a “short-and-distort” campaign as it was targeted by the defendants, who allegedly spread damaging information in order to profit from their short position with an estimated $60 million or more.
On November 28, 2017, UDF filed a lawsuit in Dallas County Court against Bass and Hayman Capital claiming they made false statements that disparaged UDF’s business and interfered with its contracts and business relation. The suit also claims those statements were made with malice and caused extensive damage to UDF’s business.
The matter escalated on June 12, 2018, when the Court allowed limited discovery and ruled that UDF had set a cause of action to defend the intentional business disparagement and tortious interference by the defendants.
The defendants quickly filed an appeal on June 29, 2018, which allowed them to stay any additional discovery until a ruling is made in the Appeals Court, where the matter is now pending.
UDF is represented by Ellen A. Cirangle, Jonathan E. Sommer and Kyle A. Withers with Lubin Olson & Niewiadomski LLP, who have extensive experience successfully litigating market manipulation claims against hedge funds.