Private Equity Firms Seek $750 Million in Lawsuit Against Morgan Stanley for Alleged Fraud

Posted on October 13th, 2023 at 11:51 AM

From the desk of Jim Eccleston at Eccleston Law 

Private equity firms Certares Management LLC and Knighthead Capital Management LLC have filed a lawsuit against Morgan Stanley, seeking at least $750 million in damages.

The firms allege that Morgan Stanley fraudulently restructured a deal related to their investment in a credit agreement for a luxury high-speed rail line developed by Brightline Holdings, a company backed by Fortress Investment Group. Brightline Holdings is also named as a defendant in the lawsuit, according to AdvisorHub.

The firms allege that Morgan Stanley misrepresented and concealed certain terms of the deal, which were crucial for ratifying a preferred-share issue by a subsidiary of Brightline.

According to the firms, this preferred-share issue should have triggered the prepayment make-whole provisions of the deal. They are seeking an order that mandates Brightline to prepay the loan and make the required make-whole payments. Certares also claims it faced retaliation from Morgan Stanley for objecting to the bank's actions. The suit states that Morgan Stanley declined to participate in another unrelated financing deal with Certares last month, citing the ongoing dispute with Brightline.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next

Hiring Eccleston Law has been one of the best career decisions I have made and this "investment" to maintain my sterling regulatory record has been returned many times over.  If you are in a situation where you've been unfairly accused, don't hesitate to talk with Eccleston Law. They are the best.

Thomas C.

LATEST NEWS AND ARTICLES

February 4, 2026
Investor Redemptions Rise in Nontraded BDCs Amid Credit Concerns

Financial advisors and their clients have increased redemptions from nontraded business development companies (BDCs) following a series of high-profile corporate bankruptcies, according to InvestmentNews. The surge highlights growing investor concern about liquidity and credit exposure within these high-yield but often risky investment ...

February 3, 2026
FINRA Accuses Spartan Capital of Widespread Churning That Allegedly Harmed Customers

The Financial Industry Regulatory Authority (FINRA) has brought a disciplinary complaint against Spartan Capital Securities and several senior leaders of the New York City–based broker-dealer, alleging that the firm facilitated excessive trading that generated millions of dollars in revenue while causing substantial losses to customers.

February 2, 2026
California Investors Allege Unsuitable DST Recommendations in FINRA Arbitration

Two investors from the San Francisco Bay Area have filed a FINRA arbitration claim against brokerage firm Realized Financial and its financial advisors.