Scott R. Williams

A North Carolina business court judge has dismissed a lawsuit from shareholders alleging leaders of an investment fund allowed an exchange of more than $300 million in diversified assets for "worthless" illiquid equity, finding the complaint did not allege either a material benefit or a substantial likelihood of liability as to the adviser. Judge Julianna Theall Earp said in the order Friday the suit does not currently satisfy the derivative demand prerequisite. "Plaintiffs have failed to meet a threshold requirement necessary for this court to have subject matter jurisdiction," Judge Earp said. The suit was brought on behalf of Hatteras Master Fund LP against its directors and adviser Hatteras Investment Partners LP, and involves four "feeder" funds and a master fund. The four named shareholders and plaintiffs — Joseph Meyer, Henry G. Schwartz Jr., James M. Alland and Carol C. Collier — invest in three of the four feeder funds. The master fund is directed by David B. Perkins, H. Alexander Holmes, Steve E. Moss, Gregory S. Sellers and Thomas Mann, according to the suit, and they are all named defendants. All the funds are controlled by Hatteras Investment Partners, which in turn is controlled by Perkins, the plaintiffs said. According to the plaintiffs, the defendants caused the master fund to enter a transaction with The Beneficient Company Group LP, also known as "Ben," that led to a 98% drop in value of the master fund. At a hearing in September, Corri A. Hopkins of Parker Poe Adams & Bernstein LLP, counsel for Perkins and Hatteras Investment Partners, said the shareholders did not fulfill pre-suit requirements under North Carolina and Delaware laws, like serving a demand on the fund's general partner before suing. And the plaintiffs admitted they did not make a litigation demand on the limited partnership's general partner, Judge Earp noted in the order Friday. They also did not adequately plead that the adviser received a material benefit from the Ben transaction that would have made the demand futile, or that the demand would be futile because the adviser faced a substantial likelihood of liability on their claim, according to the order. When moving to dismiss the suit, the defendants had argued the plaintiffs only generally describe the terms of any purported agreements between Ben and Hatteras Investment Partners, and that the size of the transaction alone is not material to show demand futility. Judge Earp agreed with the defendants on Friday. "That the business opportunities Ben proposed to the Adviser would presumably involve large sums of money is insufficient to show materiality without facts to put those amounts in context," Judge Earp said. The judge also said the plaintiffs failed to meet the "heavy" burden of showing that Hatteras Investment Partners displayed "willful misfeasance, gross negligence, bad faith, or reckless disregard of its duties." "Because fiduciaries must take risks ... they are exposed to liability for breach of fiduciary duty only if their breach of the duty of care is extreme," Judge Earp said, citing the Delaware Chancery Court's 2009 decision In re Citigroup Inc. Shareholder Derivative Litigation . In a July opinion in another suit against Hatteras Investment Partners in the North Carolina Business Court, Judge Matthew T. Houston declined to allow another investor to voluntarily dismiss its lawsuit against Hatteras Investment Partners and move it to Delaware because it failed to plead facts demonstrating a legitimate claim under Delaware law. Hatteras Investment Partners was also named in a putative class action filed in Chancery Court in April 2024, in which stockholders in Hatteras-managed funds alleged breaches of fiduciary duty in conjunction with the Ben transaction. In August, A North Carolina Business Court judge declined to allow Hatteras Investment Partners to remove the case to Delaware federal court. Representatives of the parties did not immediately respond to requests for comment Tuesday. The four shareholders are represented by Paul D. Malmfeldt of Malmfeldt Law Group PC, and Matthew E. Lee, Jeremy R. Williams and Eric G. Steber of Lee Segui PLLC. Perkins and Hatteras Investment Partners are represented by Corri A. Hopkins and Melanie Black Dubis of Parker Poe Adams & Bernstein LLP. Holmes, Moss, Sellers and Mann are represented by Edward B. Davis and Joshua B. Durham of Bell Davis & Pitt PA, and Joshua L. Solomon and Phillip Rakhunov of Pollack Solomon Duffy LLP. The Hatteras Master Fund LP is represented by Jennifer K. Van Zant, Greg Gaught, Clint S. Morse and Gabrielle E. Supak of Brooks Pierce McLendon Humphrey & Leonard LLP. The case is Meyer v. Hatteras Investment Partners LP, case number 2024CVS27958, in the North Carolina Business Court.

Oct 14

3 min

Scott R. Williams has been named to Crain’s Chicago Business’ 2024 “Notable Leaders in Accounting, Consulting, and Law” list, which recognizes his exceptional contributions to the legal field. The special editorial profiles top accountants, consultants, and lawyers in the Chicago area. Scott is a partner in Sidley’s M&A practice. With more than 20 years of experience, Scott has played a significant role in transactions with an aggregate value exceeding US$250 billion, representing clients in a diverse array of industries including financial services, insurance, energy, healthcare, and retail. He also has experience representing clients in such industries as life sciences, consulting, consumer products, machine industrial, and food services.~~Scott R. Williams has been named to Crain’s Chicago Business’ 2024 “Notable Leaders in Accounting, Consulting, and Law” list, which recognizes his exceptional contributions to the legal field. The special editorial profiles top accountants, consultants, and lawyers in the Chicago area. Scott is a partner in Sidley’s M&A practice. With more than 20 years of experience, Scott has played a significant role in transactions with an aggregate value exceeding US$250 billion, representing clients in a diverse array of industries including financial services, insurance, energy, healthcare, and retail. He also has experience representing clients in such industries as life sciences, consulting, consumer products, machine industrial, and food services.

Sep 9

1 min

An insurer owes more than $790,000 for damage to a hotel roof during a winter storm and resulting water damage, a Colorado property owner alleged in a suit removed to federal court, saying the carrier unreasonably delayed and denied coverage. In a complaint filed in Colorado state court in November and removed to federal court Monday, Lazier Tivoli LLC said Westfield Champion Insurance Co. breached the insurance policy and acted in bad faith by depriving the owner of the Tivoli Lodge in Vail, Colorado, of its available benefits. "Defendant failed to issue any payment for the covered loss despite receiving satisfactory proof of damage," Lazier said. "Defendant unreasonably denied or failed to properly adjust the claim, attributing the damages to wear and tear, despite clear evidence to the contrary." According to the complaint, the weight of ice and snow during a storm in August 2023 damaged the hotel's roof, allowing for water to enter the property and cause further damage. Lazier said a public adjuster inspected the property in June 2024 and estimated it would cost more than $791,000 to repair the damage. The property owner said it submitted a claim under its property with Westfield, which provided up to $38.9 million in building coverage and $1.7 million in business personal property coverage, but the insurer failed to communicate with Lazier for months and still has not resolved the matter nearly two years later. "Although defendant did send an engineer to inspect the property, defendant unreasonably refused to give meaningful consideration to plaintiff's estimate and failed to conduct a reasonable investigation into the scope and value of the claimed damages," Lazier said. The property owner said Westfield should have known that its investigation and handling of the claim was inadequate, incomplete and otherwise inconsistent with industry standards and its obligations under Colorado law. The insurer's conduct "resulted in a substantial delay of covered benefits to plaintiff without a reasonable basis," Lazier said, asserting that it is entitled to two times the covered benefits that have been delayed and denied, pursuant to Colorado Revised Statute Section 10-3-1116. Representatives for the parties did not immediately respond to requests for comment Tuesday. Lazier is represented by Johnny R. Williams of The Morgan Law Group. Westfield is represented by Jason D. Cooper of Freeman Mathis & Gary LLP The case is Lazier Tivolli LLC v. Westfield Champion Insurance Co., case number 1:25-cv-03866, in the U.S. District Court for the District of Colorado.

Dec 2

2 min

Sidley partners Sean M. Carney and Scott R. Williams have been recognized by Crain’s Chicago Business as “Notable M&A Dealmakers” on its 2025 list. The feature highlights Chicago professionals who are “guiding transformative deals across industries.” Sean is a co-leader of Sidley's Private Equity practice, a co-leader of Sidley’s global Insurance practice, and a member of the firm's Executive Committee. Sean’s practice focuses on advising insurers and reinsurers, investment banks, private equity firms, and other participants in the insurance and financial services industries in a variety of corporate, securities, and regulatory matters. Crain’s has specifically highlighted Sean’s role in Arthur J. Gallagher's acquisition of Woodruff Sawyer and his work in Sentry Insurance's US$1.7 billion acquisition of The General. Scott is known for his work on transformative, highly complex and first-in-kind transactions. Over the course of his career he has played a significant role in transaction with an aggregate value in excess of US$325 billion. His work over his 20 plus years of practice has included public and private mergers and acquisitions, spinoffs, carveout sales of businesses, joint ventures, significant investments, and bankruptcy reorganizations. Crain’s has noted his advice to the special committee of Nordstrom on its US$6.3 billion sale to a group including Nordstrom family members and to US Cellular on its US$4.4 billion sale to T-Mobile.~~Sidley partners Sean M. Carney and Scott R. Williams have been recognized by Crain’s Chicago Business as “Notable M&A Dealmakers” on its 2025 list. The feature highlights Chicago professionals who are “guiding transformative deals across industries.” Sean is a co-leader of Sidley's Private Equity practice, a co-leader of Sidley’s global Insurance practice, and a member of the firm's Executive Committee. Sean’s practice focuses on advising insurers and reinsurers, investment banks, private equity firms, and other participants in the insurance and financial services industries in a variety of corporate, securities, and regulatory matters. Crain’s has specifically highlighted Sean’s role in Arthur J. Gallagher's acquisition of Woodruff Sawyer and his work in Sentry Insurance's US$1.7 billion acquisition of The General. Scott is known for his work on transformative, highly complex and first-in-kind transactions. Over the course of his career he has played a significant role in transaction with an aggregate value in excess of US$325 billion. His work over his 20 plus years of practice has included public and private mergers and acquisitions, spinoffs, carveout sales of businesses, joint ventures, significant investments, and bankruptcy reorganizations. Crain’s has noted his advice to the special committee of Nordstrom on its US$6.3 billion sale to a group including Nordstrom family members and to US Cellular on its US$4.4 billion sale to T-Mobile.

Aug 19

2 min

CECO Environmental Corp. said Tuesday it has agreed to acquire Thermon Group Holdings Inc. in a stock and cash deal valued at about $2.2 billion, expanding its footprint in industrial thermal and environmental solutions. Gibson Dunn & Crutcher LLP is advising CECO, while Sidley Austin LLP is advising Thermon. For each share held, Thermon shareholders can elect to receive either $10 in cash and 0.6840 shares of CECO common stock, $63.89 in cash, or 0.8110 shares of CECO stock, subject to terms that keep each payout within agreed limits, the companies said in an announcement. The consideration implies a value of about $63.13 per Thermon share, representing a premium of about 26.8% to Thermon's prior-day closing price of $49.77, the companies said. Thermon's stock was up about 2.5% Tuesday, trading at $51.08 midafternoon. The combination will add Thermon's process heating, heat tracing, and temperature management technologies to CECO's portfolio of air quality, emissions control, and water treatment solutions. Upon completion, CECO and Thermon shareholders are expected to own about 62.5% and 37.5%, respectively, of the combined company. CECO CEO Todd Gleason will continue to lead the company, and the CECO board will include two members from Thermon's current board. The companies said they expect to generate about $40 million in annual cost synergies within 36 months of closing, and they expect to have a more balanced revenue mix with greater exposure to short cycle and aftermarket revenues. The deal has been unanimously approved by the boards of both companies and is expected to close in mid-2026, subject to customary closing conditions. The Sidley team is led by partners Scott Williams and Matthew Stoker. The Gibson Dunn team is led by partners Jonathan Whalen and Jeffrey Chapman.

Feb 24

1 min