Legal

Law Firm Fights Back in PIPE Dissipation Case

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Investors in a $12.5 million PIPE issued by Aamaxan Transport Group (AAXT) allege an individual involved in the deal stole the proceeds through ATM withdrawals and other personal transactions. Deheng Law Firm recently asked the court to be dismissed from the case on the basis that actions of a former employee close to the deal did not make the firm liable for the dissipation. The case began in September 2010, when investors filed suit in a New York U.S. District Court and then submitted an amended complaint a few weeks later. The complaint was dismissed, but the investors were allowed to file another complaint Deheng is seeking to dismiss. The PIPE took place in 2008, when funds including Alder Capital Partners, Pope Investments, Chestnut Ridge Partners and Paragon Capital purchased convertible preferred stock from Aamaxan (aDelaware corporation with operations inChina).

Legal

Hedge Funds Claim Hyperdynamics Misled Investors

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Four hedge funds have filed a lawsuit alleging that Hyperdynamics Corp. (HDY) fraudulently misled investors in order to close a funding round. The Houston-based oil explorer intentionally dragged its heels on exploratory drilling, knowing poor results would have scared off investors, according to allegations in the suit filed by Iroquois Master Fund, Hudson Bay Capital, Cranshire Capital and Kingsbrook Opportunities Master Fund. The suit was filed on May 9 in the New York State Supreme Court. Another suit by an individual investor is ongoing inHouston’s U.S. District Court, where a third class action was also filed in May.