Hedge Fund’s Battle With Its REIT Escalates With New Claims (1)

Hedge fund Pine River Capital Management and Two Harbors Investment Corp., the real estate investment trust it manages, escalated their legal battle, with each lodging new allegations against the other.

Two Harbors, a REIT specializing in residential mortgages, said in a filing Tuesday night that it was terminating its management agreement with Pine River for cause, citing gross negligence and breaches of contract.

The firm had announced in April that it was severing the contract due to “unfair compensation,” and expected it would need to pay Pine River a $144 million fee for doing so. But because they’re now ...