Morgan Stanley Sued by Tops’ Trust for Bleeding Grocer ‘Dry’

A litigation trust from Tops Holding II Corp.'s bankruptcy is suing Morgan Stanley and other private equity firms for allegedly over-leveraging the grocery store operator and taking “massive, illegal dividends” totaling $375 million.

“In six short years, Morgan Stanley and the other Private Equity Investors bled a once-thriving regional grocery chain dry,” Alan D. Halperin, the trustee for the Tops Holding Litigation Trust, said in a complaint filed Wednesday in the U.S. Bankruptcy Court for the Southern District of New York.

HSBC Equity Partners USA and North Haven Capital Partners were among the private equity investors named in the ...