Citibank Wins Fund Dispute in Second Circuit

March 12, 2014

Cleary Gottlieb achieved victory in a unanimous opinion by the U.S. Court of Appeals for the Second Circuit, which upheld the Southern District’s dismissal of all claims against Citibank, N.A., and related entities in connection with Brazilian private equity investments.

The litigation followed in the wake of Citibank’s successful resolution of litigation brought by it against Opportunity, the former general partner of a private equity fund established by Citibank to make investments in Brazilian companies. Plaintiff, a former employee of Opportunity (and before that Citibank), claimed that Opportunity improperly denied him a share of alleged profits made from the investments and claimed that Citibank and Opportunity were liable for compensation allegedly owed to him. The Court rejected each of the theories on which plaintiff based his claims, including that Citibank owed him fiduciary duties, that it aided and abetted breaches by Opportunity and that Citibank owed compensation to plaintiff as a matter of the contracts governing the conduct of the investment fund.