Hedge fund files slander lawsuit

Jayhawk Capital responds 13 months after being sued by Calif. group

? A local hedge fund has responded after being sued over a year ago by a group of California hedge funds with a lawsuit of its own.

Jayhawk Capital Management and its principal owner, Kent C. McCarthy, filed a lawsuit Friday in federal court in Kansas City, Kan., 13 months after being sued by Primarius Capital LLC.

Jayhawk and McCarthy say Primarius cost Jayhawk millions of dollars by making slanderous statements.

Primarius’ statements “were willfully and maliciously aimed at conveying the false message that Jayhawk and McCarthy’s business practices are unethical and illegal,” the lawsuit charges.

Primarius’ attorney, Philip Heller of Los Angeles, said Jayhawk’s new lawsuit is “more of the same nonsense.”

Calls from the Journal-World to Jayhawk’s offices for comment were referred to Jim McMullen, chief operating officer and general counsel, who was unavailable for comment Monday.

The federal lawsuit counters an action brought by Primarius and its principal, Patrick Lin of Orinda, Calif., in March 2007 in federal court in San Francisco. That lawsuit accused Jayhawk of defrauding Primarius and Lin. It alleged that McCarthy offered to provide the Primarius funds with investment capital and advice only to sell stocks in which he recommended they invest.

McCarthy, an alumnus of Kansas University and a major supporter of its business school, does not see it that way.

In 2006, Jayhawk sought to redeem most of $20 million in investments in Primarius, in part because of Primarius’ poor performance and in part because Lin misrepresented the extent of Primarius’ performance in China, Jayhawk’s lawsuit alleges.

The lawsuit seeks unspecified damages for defamation, wrongful interference with contract and wrongful interference with business relationships.