There’s more than one way for a hedge fund to make a buck, but trying to convince a judge that a losing bidder deserves more than 12 million smackeroos apparently isn’t one of them. A number of hedge funds, including Deephaven Capital Management and D.E. Shaw & Co., as well as Fidelity Management & Research, were denied a collective $12.5 million payday by U.S. Bankruptcy Judge Judith Fitzgerald of Wilmington, Del. Fitzgerald rejected the consortium’s motion for the money as a “bonus” for its bid against Warren Buffett for the right to backstop a $1.8 billion equity rights offering by USG Corp. (Credit Suisse also bid but, according to Dow Jones Newswires, is asking only for $500,00 to cover the costs of assembling a proposal.) The offering is part of USG’s plan to emerge from bankruptcy, and the consortium led by Deephaven felt that the competition enabled the manufacturer to save some $33 million in fees by countering Buffett’s $100 million offer to buy any unsold shares. Buffett eventually lowered his fee to $67 million, and Deephaven and the rest think they should be rewarded.

“You have no chance of convincing me that $12.5 million of equity should go out to someone who made a counterproposal – and lost,” Fitzgerald told the consortium, reported Dow Jones. While the hedgies may walk away pretty much empty-handed, except for about $175,000 in attorney fees the judge is considering, USG shareholders are backing Credit Suisse’s request.

There’s more than one way for a hedge fund to make a buck, but trying to convince a judge that a losing bidder deserves more than 12 million smackeroos apparently isn’t one of them. A number of hedge funds, including Deephaven Capital Management and D.E. Shaw & Co., as well as Fidelity Management & Research, were denied a collective $12.5 million payday by U.S. Bankruptcy Judge Judith Fitzgerald of Wilmington, Del., who rejected their motion for the money as a “bonus” for its bid against Warren Buffett for the right to backstop a $1.8 billion equity rights offering by USG Corp. (Credit Suisse also bid but, according to Dow Jones Newswires, is asking only for $500,00 to cover the costs of assembling a proposal.) The offering is part of USG’s plan to emerge from bankruptcy, and the consortium led by Deephaven felt that the competition enabled the manufacturer to save some $33 million in fees by countering Buffett’s $100 million offer to buy any unsold shares. Buffett eventually lowered his fee to $67 million, and Deephaven and the rest think they should be rewarded.

“You have no chance of convincing me that $12.5 million of equity should go out to someone who made a counterproposal – and lost,” Fitzgerald told the consortium, reported Dow Jones. While the hedgies may walk away pretty much empty-handed, except for about $175,000 in attorney fees the judge is considering, USG shareholders are backing Credit Suisse’s request.