Pillsbury Law

Recovering Millions for a Hedge Fund Client

When Passport Capital made its investment in Terralliance Technologies, it thought it was buying into a fast-growing startup with a promising idea for optimizing oil field exploration. Passport’s investment in Terralliance was comparatively modest, but sizeable for the young San Francisco hedge fund. So when Terralliance collapsed amid allegations of mismanagement and misappropriation of funds by its founder, Passport turned to Pillsbury for help. Passport had made significant bridge loans to Terralliance while the startup was waiting for a $1.1 billion financing from a Singaporean sovereign wealth fund. But the Singapore investors balked after finding out that Terralliance founder Erlend Olson wired himself substantial amounts of company money without documenting any business justification. Ultimately, Terralliance defaulted on its loans and assigned to Passport various promissory notes from Olson. When Passport’s lawsuit for nonpayment finally came to trial in 2012, Olson argued he was the victim of a conspiracy by Terralliance’s investors. After a nine-day trial, Pillsbury defeated all of Olson’s defenses and secured an award in excess of $6 million, saving vital funds for a young hedge fund.