Le-Nature's trust, Harbinger join forces to prosecute fraud claims

By Caroline Salls

Pittsburgh, Dec. 29 - Harbinger Capital Partners has joined forces with the Le-Nature's Inc. Liquidation Trust, according to a Harbinger news release.

Harbinger said Le-Nature's collapsed after an extensive fraudulent scheme was uncovered. The trust was formed under Le-Nature's bankruptcy liquidation plan, in part to prosecute fraud-related claims against several third parties, including Wachovia Securities.

According to the release, the trust has filed a lawsuit against Wachovia resulting from Wachovia's long-term involvement in the Le-Nature's scheme. The case is pending in the federal district court in Pennsylvania.

A Harbinger affiliated fund is the lead plaintiff in a separate action against Wachovia and other third parties pending in New York state court in connection with the same scheme.

As part of this arrangement, a Harbinger affiliated fund is financing up to an additional $8 million of the trust's operating expenses. The funding will be used to prosecute the claims.

"These actions will enable the Harbinger litigation group and the trust to maximize potential recoveries against Wachovia and other third parties," Harbinger chief executive officer and chief investment officer Philip Falcone said in the release.

The Harbinger New York State lawsuit seeks damages against Wachovia and other third parties in excess of $182 million. The trust is seeking more than $450 million in damages against Wachovia and other third parties.

Le-Nature's, a Latrobe, Pa., manufacturer of flavored bottled water and other beverages, emerged from Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Western District of Pennsylvania on July 25, 2008. The case number is 06-25454.

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