The trustee overseeing the bankruptcy of the investment firm once led by the flashy money manager Alphonse Fletcher Jr. has reached a $4.25 million settlement with the law firm Skadden, Arps, Slate, Meagher & Flom, the New York Times DealBook blog reported on Friday. A court-appointed trustee claimed that Skadden, which represented Fletcher’s hedge fund, Fletcher Asset Management, failed to “adequately” protect the firm’s funds and their investors. The hedge fund, which once reported 300 percent returns, also stands accused in a separate civil suit of defrauding three Louisiana pension funds out of more than $100 million. While Skadden called the trustee’s findings “devoid of merit” in the court filing, both parties agreed to the settlement in order to avoid a lawsuit. Skadden made it clear, however, that it could have defended itself had such a suit been filed.
