Morgan Stanley, HSBC Settle Tops Grocery Dividend Awards Suit

Private equity units of Morgan Stanley and HSBC agreed to terms to settle a trustee’s claims accusing the investors of rendering grocery chain Tops Friendly Markets insolvent while paying themselves $375 million in dividends.

Morgan Stanley Investment Management Inc. and HSBC Equity Partners USA LP, along with a trust established for creditors of Tops Holding II Corp., said in a joint letter to the US Bankruptcy Court for the Southern District of New York that they reached a deal in principle to resolve a 2020 suit filed to claw back “massive, illegal dividends.”

The court should hold in abeyance any ...