Morgan Stanley Hit With $750 Million Fraud Suit by PE Firms (1)

Morgan Stanley was sued for at least $750 million by private equity firms who claim they were defrauded in a deal to invest in a credit agreement for a luxury high-speed rail line.

-bsp-bb-link state=”{“bbHref”:”bbg://securities/0962995D%20US%20Equity”,”_id”:”0000018a-aa41-dbb9-afcf-aff3fe370000″,”_type”:”0000016b-944a-dc2b-ab6b-d57ba1cc0000″}”>Certares Management LLC and -bsp-bb-link state=”{“bbHref”:”bbg://securities/0705815D%20US%20Equity”,”_id”:”0000018a-aa41-dbb9-afcf-aff3fe370001″,”_type”:”0000016b-944a-dc2b-ab6b-d57ba1cc0000″}”>Knighthead Capital Management LLC filed suit Monday in New York state court, alleging Morgan Stanley unlawfully restructured the deal by which they invested in a loan to Miami-based -rte-company state=”{“_id”:”0000018a-aa41-dbb9-afcf-aff3fe370003″,”_type”:”00000160-4b23-d8bd-adfd-4b3348fd0000″}”>Brightline Holdings, a -bsp-bb-link state=”{“bbHref”:”bbg://securities/3867693Z%20US%20Equity”,”_id”:”0000018a-aa41-dbb9-afcf-aff3fe370004″,”_type”:”0000016b-944a-dc2b-ab6b-d57ba1cc0000″}”>Fortress Investment Group-backed company currently developing a Los Angeles-Las Vegas rail line. Brightline is also a defendant in the suit.

Certares and Knighthead claim that, in late 2022 and early …