A Delaware federal judge has sent back to the Delaware Court of Chancery a proposed class and derivative action over an alleged $1 billion “Ponzi-like scheme” at Texas-based limited partnership United Development Funding III, finding that claims for fiduciary breaches, waste and unjust enrichment called for state, and not federal, review.
The plaintiffs, co-trustees of the David C. Fannin Revocable Trust, initially filed suit in the Chancery Court in early July, asserting individual and derivative claims against UDF’s brass and eight other companies for self-dealing and self-enrichment in a supposed scheme to misappropriate investor funds.
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