Investigations

BAUPOST GROUP LLC FUNDS – INVESTIGATION OVER ITS MEGA-QUARRY INVESTMENT

Zamansky LLC is currently investigating the Baupost Group LLC (“Baupost”) hedge funds over its investment in the Highlands’ “mega-quarry” in Ontario, Canada.   Baupost is the based in Boston, MA, hedge fund group with reported assets under management of $22 billion.  Founded by Seth Klarman in 1982, Baupost has a successful record at “value investing”.

In 2006, according to public reports, Baupost formed Highland Companies, a Nova Scotia-based corporation that began buying farmland in Melancthon Township, approximately 120 kilometres north of Toronto, Ontario, purportedly for the purpose of farming.  By early 2011, Highland amassed over 7,000 acres that it actively farmed. Highland, then, submitted an application for a 2,316 acre Amabel dolostone (limestone) mega-quarry. The application saw heated opposition, as opponents raise concerns about groundwater contamination, local heritage, food security concerns, truck traffic congestion, highway safety, noise and dust pollution. On November 21, 2012, Highland withdrew the application, in the face of the fierce opposition.

Zamansky’s investigation concerns whether Baupost’s stake and/or activities associated with the “mega-quarry” breached duties owed to investors.  In particular, Zamansky is investigating whether such a venture capital development as the mega-quarry investment was authorized for the value-oriented Baupost funds, and whether the risks were sufficiently disclosed.

Recently, Baupost’s research has come under fire when it was caught holding a large position in Hewlett-Packard Corporation (”HP”) after it announced an $8 billion writedown associated with accounting fraud in the Autonomy merger.   HP took previous hits when it took a writedown for its EDS merger, and its sudden business strategy change to-then-abrupt reversal-away-from mobile devices.  HP also has two CEOs resign in three years.  Critics have questioned whether Baupost’s bet on HP was reflective of disciplined value investing for which it has been known.

If you invested in any of the Baupost funds which suffered a loss from the Highlands’ mega-quarry failure, please contact Jake Zamansky at 212 742-1414 or jake@zamansky.com for a free and confidential consultation with one of our securities attorneys.

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