(Bloomberg) -- Highland Capital Management said investors in its shuttered hedge fund from 2008 were awarded $175 million in arbitration, and that the firm doesn’t have the cash on hand for an immediate payment.

An attorney for the investment firm disclosed the information in an affidavit in Delaware Chancery Court that was meant to be sealed from public view. The award pertains to a case in which Dallas-based Highland was sued for not returning investors’ money in a hedge fund that was shut down during the financial crisis. Highland said in a separate filing that it oversees about $15 billion.

Investors in the Crusader Fund were supposed to get their money within three years of its closure in October 2008, following losses on high-yield, high-risk loans and other types of debt. In 2011, Highland said it would take another three years to return the cash. A group of investors sued in 2016 saying Highland engaged in “willful misconduct and gross negligence” by refusing to return their money and taking more than $30 million in fees it wasn’t entitled to. An arbitration panel issued a partial award on March 6 that investors have asked a Delaware judge to confirm.

The details in the March 22 affidavit -- in which the lawyer said Highland “did not have cash, cash equivalents, or immediately liquid assets equal to the amount of the partial final award”-- were meant to be blacked out, according to a separate filing asking the court to retroactively redact the original document. The request was denied. The affidavit was made as part of an argument opposing the investors’ request that the court prevent Highland from making major changes to its corporate structure and assets.

The $175 million award, which was one of multiple awards granted by the panel, is greater than the current size of the Crusader fund, which has been run by Alvarez & Marsal since investors fired Highland in 2016. The fund, which has distributed almost all of the $1.7 billion of assets it had in 2011, had $128 million in net partners’ capital as of Feb. 28, according to a document seen by Bloomberg. About $100 million of that is in cash.

William Braun, a spokesman for the investor committee at Abernathy MacGregor, declined to comment. A spokeswoman for Highland didn’t immediately respond to phone and e-mail messages seeking comment.

The case is Redeemer Committee of the Highland Crusader Fund v. Highland Capital Management LP, CA12533, Delaware Chancery Court (Wilmington).

--With assistance from Bob Van Voris.

To contact the reporter on this story: Katia Porzecanski in New York at kporzecansk1@bloomberg.net

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Peter Blumberg, Joe Schneider

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