- The CEO of a $19 billion pension fund in Maine said that Angelo Gordon’s disclosure about the lawsuit, years after it was first filed, raised transparency concerns.
- Another pension CEO in California said the litigation “raises concerns” and they are “monitoring the situation closely.”
- A new judge was recently appointed to the ongoing suit, which was filed in Illinois.
Two pension clients of the hedge fund Angelo Gordon say they only recently learned about the 2019 accusations of sexual assault against a former top executive of the fund’s direct lending arm, Twin Brook Capital Partners.
The CEO of a $18 billion pension fund in Maine told Insider that staff were first notified on June 22 about the lawsuit, which has raised transparency concerns for the investor.
“Transparency is a concern and that has been discussed with them,” Rebecca Wyke, CEO of the Maine Public Employees Retirement System, said of Angelo Gordon.
The CEO of a $4 billion California pension fund, the San Joaquin County Employees’ Retirement Association, said that her staff was aware of litigation impacting the money manager, but they were not told of specific details such as the assault claims.
Angelo Gordon, through a spokesperson, declined to comment.
In the lawsuit, initially filed in 2019 in an Illinois state court, Michael Ann Bulthuis, a former marketing director at Twin Brook, accused Christopher Williams, a former portfolio manager and co-founder of the unit, of sexual assault and battery. The plaintiff, Bulthuis, alleged that Williams raped her in November 2017, and that he aggressively pursued her when they were both employed at the company, even after a brief consensual relationship between the two ended.
Twin Brook and Williams have since sought to get the case dismissed, but a judge has yet to decide on their motion. In court filings, Angelo Gordon has denied any negligence or wrongdoing.
In June, Insider first covered the previously unreported lawsuit. Williams, Bulthuis, and her attorneys have not responded to requests for comment. An attorney for Williams declined to comment on the ongoing lawsuit.
The investment firm’s Chicago-based unit Twin Brook is also named as a defendant in the case. Twin Brook is accused of breach of contract, negligence, negligent hiring, and negligent supervision.
Last year, Maine committed $50 million to AG Direct Lending Fund IV, which is managed by Angelo Gordon’s direct lending unit Twin Brook, pension board disclosures show. The pension board also approved a $125 million allocation to the firm’s AG Direct Lending Fund V, “but has not yet committed those funds,” Wyke said in an email to Insider.
“At this point, we don’t see a material impact on the fund managed by AG,” Wyke said, adding that neither Bulthuis nor Williams has been employed at the firm for years.
Private companies are not bound by the kind of rigorous reporting obligations that publicly traded companies are governed by under federal securities laws. Particularly for private companies, it’s up to their discretion to disclose the details of such lawsuits, a decision that will often depend on whether they consider it in their business interest to do so, said Andrew Vollmer, a senior affiliated scholar at the Mercatus Center at George Mason University. Vollmer was also a deputy general counsel at the US Securities and Exchange Commission during the administration of President George W. Bush.
“Generally, companies make public disclosures all the time even when they’re not required to,” Vollmer said. “They do it to cultivate a good reputation in the marketplace with customers, suppliers, employees, and their shareholders.”
Williams left Angelo Gordon in December 2018, according to company materials shown to investors and his LinkedIn profile. But Williams was away from the company well before then, according to legal filings by Angelo Gordon, which said that Williams took a leave of absence in November 2017 and never returned to work. Bulthuis’ LinkedIn profile shows that she left Twin Brook in October 2018.
Wyke expects the pension fund will close on the Fund V investment in August.
“MainePERS was notified about the lawsuit by Angelo Gordon. Members of our investment team and our investment consultant, Cliffwater, met with representatives of Angelo Gordon as part of our due diligence. We determined not to take any action at this time while the lawsuit is pending,” Wyke said in an email.
On July 25, Stephen Nesbitt, the CEO of investment consultant Cliffwater, declined to comment on the matter via email, saying the firm “does not comment publicly” on money managers it advises clients about.
The California pension fund, the San Joaquin County Employees’ Retirement Association, has been a client of Angelo Gordon since 2015.
“My understanding is that we were aware there was litigation, and we did not know the specifics of the litigation,” SJCERA CEO Johanna Shick said in a phone call with Insider.
“Angelo Gordon was reticent to do that,” Shick said, adding that is not uncommon in cases of ongoing litigation and personnel related matters.
She also noted in an email that, since being notified of the lawsuit, the pension has worked with its investment consultant Meketa “to further our understanding of the case and its potential effect on our investment.”
Angelo Gordon notified the investor that it was facing a lawsuit that alleged breach of contract and negligent supervision against “an affiliate of the firm,” an apparent reference to its Twin Brook unit, June pension meeting documents, published online by SJCERA, show.
Regarding the sexual assault claims in the lawsuit, however, Angelo Gordon’s due diligence reporting only stated there were “separate tort claims against another former employee of the firm.”
In 2015, the California pension fund committed $20 million to an Angelo Gordon core plus real estate fund that is not managed by the Twin Brook unit, Shick said in an email to Insider.
“Nonetheless, litigation of this nature raises concerns and we are monitoring the situation closely,” Shick wrote.
In her complaint, Bulthuis said that Angelo Gordon conducted an internal investigation after she reported her alleged assault by Williams to Twin Brook managing partner Trevor Clark. But she portrayed even the investigation, which took place in February 2018, as an example of the company’s failure to protect her. She characterized it as a six-hour-long grilling that “raised so much trauma for Bulthuis that she could not overcome the depression,” according to her complaint.
And though she also told investigators about Williams’ alleged harassment, including that he wouldn’t return a key to her apartment, they ultimately concluded that their November 2017 encounter was consensual, she wrote in the complaint.
In a separate proceeding before the Equal Employment Opportunity Commission, where Bulthuis had also filed a complaint, Angelo Gordon said company leadership promptly responded to Bulthuis’ concerns by hiring outside lawyers to conduct an “independent investigation.” The investment firm depicted the inquiry as thorough — investigators spoke to five witnesses, including Williams, and produced an 18-page report that highlighted inconsistencies in Bulthuis’ narrative, the company said.
Angelo Gordon also said in the legal filings that it hired a top white-collar law partner, Martha Stolley of Morgan Lewis & Bockius, to conduct its independent investigation of the sexual assault claims. The ensuing two-month inquiry concluded the allegations were, “unsubstantiated and not credible,” the firm said.
During her time at Morgan Lewis, Stolley has worked on several high-profile cases. She was retained by the NBA in 2014 to help independently investigate a domestic violence incident involving former Charlotte Hornets player Jeffery Taylor, who was later suspended from the league and plead guilty to domestic abuse and malicious destruction of property charges. Stolley is also a former sex crimes prosecutor for the Manhattan District Attorney’s office.
Internal investigations are a common feature of corporate governance protocols, which companies dealing with serious complaints are obliged to conduct. The white-collar practices of top law firms like Morgan Lewis are often brought on to conduct such investigations, led by partners who often have prior experience as prosecutors.
Hiring lawyers to conduct such investigations can also shield the details of the investigation, even when it becomes publicly known through a lawsuit, said Bruce Green, professor at the Fordham University School of Law.
“If you hire lawyers, the conversations with people in the company are privileged,” said Green, speaking generally. “The idea is that they’re doing the investigation to provide legal advice to the company, board, or audit committee — somebody at the company whom they’re reporting to.”
The Bulthuis suit is still pending in Illinois state court, and was assigned to a new judge in June, according to the docket. James E. Snyder, an associate judge of the Circuit Court of Cook County, Illinois, is now on the case.