State Judge Rebuffs Bid for $40 Million Share of Health Care Fund

After nearly three decades atop the $10 billion hedge fund Caxton Associates, Bruce Kovner retired in September as one of the richest men in America. Four months later, his lawyers at Kasowitz Benson Torres & Friedman have also sent into retirement a $40 million lawsuit hanging over Mr. Kovner and his fund since 2006.

A state court judge ruled on Jan. 19 in Foster v. Kovner, 601349/06, that a retired McKinsey & Co. partner could not back his claims that he had a deal for a 10 percent stake in a $1 billion healthcare fund that he and Mr. Kovner’s hedge fund founded in 2005. Richard Foster, who after retiring from McKinsey briefly became chief executive of the fund, Caxton Health Holdings, claimed that Caxton promised him the 10 percent stake before firing him in 2005. Mr. Foster demanded $40 million for his purported stake in CHH, but Manhattan Supreme Court Justice Barbara Kapnick (See Profile) concluded that the evidence showed that no deal for an equity stake existed at the time of Mr. Foster’s termination.