TORONTO — Manulife Financial Corp. says a Saskatchewan court has ruled in its favour in its legal fight with hedge fund Mosten Investment LP over insurance contracts.
Mosten had argued that under the terms of the universal life insurance policy, it could deposit an unlimited amount of money and receive an annualized guaranteed return of at least four per cent with one-month liquidity.
However, Manulife says the ruling by the Saskatchewan Court of Queen’s Bench found the policy in question “does not provide for unlimited stand-alone investment opportunities within the carrier fund.”
The insurer says the ruling is consistent with its position that the case was legally unfounded and commercially absurd.
Prominent short-seller Muddy Waters had warned that if the court had sided with Mosten, the hedge fund could sell an unlimited amount of partnership interests backed by Manulife and “financially cripple” the insurer.
Manulife had argued that issuers of universal life policies never intended to have them function as deposit or securities contracts, and disagreed with the short-seller’s conclusions.
Companies in this story: (TSX:MFC)
The Canadian Press