Morgan Stanley Seeks Dismissal of $750 Million Suit by PE Firms

Morgan Stanley asked a judge to toss a suit by two private equity firms that claim they were cheated out of $750 million in an investment in the bank’s loans to a Fortress Investment Group-backed high-speed rail operator.

In a Monday court filing in New York, Morgan Stanley said Certares Management LLC and Knighthead Capital Management LLC were seeking a windfall they weren’t entitled to under their credit agreement with the bank. According to Morgan Stanley, the firms’ fraud claims were “implausible” because the bank itself would be harmed by the alleged scheme.

Certares and Knighthead first sued Morgan ...