Hasso

As they say, timing is everything. In August 2007, the initial trustee of two family trusts invested millions in the Rockwater American Municipal Fund, LLC (RAM Fund)—a hedge fund engaged in municipal arbitrage. The RAM Fund was managed by Rockwater Municipal Advisors, LLC (RMA), its managing member. In November 2007, Charles Fish Investments, Inc. (CFI), transferred its assets to Rockwater CFI, LLC, a wholly owned subsidiary of RMA, in exchange for a 15 percent interest in RMA. CFI had an option to unwind the transaction, if its interest in RMA did not meet certain benchmark values. The RAM Fund was devastated by the stock market crash and the trust investments were largely wiped out by 2008. CFI exercised its option to unwind the transaction with RMA and Rockwater CFI, LLC, and obtained a return of the assets originally belonging to it.

The successor trustee of the trusts sued the RAM Fund; RMA; Bryan Williams (Williams), who was the founder of the RAM Fund and the chief executive officer of RMA; John Hapke (Hapke), who was the chief financial officer of the RAM Fund; CFI; and Charles Fish (Fish), who was the chairman and chief executive officer of CFI. After it had…