Investment Advisers of Minneapolis, Minn. has settled a lawsuit brought against it by a would-be purchaser of a private security the firm held in its IAI Growth & Income Fund, according to a source close to IAI. Terms of the settlement were not disclosed. The security is now in the process of being sold.
The lawsuit, filed in February on behalf of two principals of Montauk Partners of Huntington, N.Y., alleged that the fund adviser did not adhere to the terms of a letter of intent it had signed this past October with Montauk, according to an IAI fund prospectus amendment filed March 7. That agreement stipulated that IAI would sell its shares of the privately held company, MatrixOne of Chemsford, Pa., to Montauk Partners at a discounted rate of $1.60 per share. MatrixOne sells software to facilitate Internet collaboration between different locations of a business, according to the IPO registration statement for MatrixOne.