The chief operating officer of Cerberus and two other people are being sued by a Japanese company for alleged violation of fiduciary duties, adding to the woes of the embattled US private equity group.

Kokusai Kogyo Holdings is seeking to recover Y52.6bn ($560m) in damages in a lawsuit filed against Mark Neporent, Cerberus’s chief operating officer, and two former directors of Kokusai Kogyo, a bus, hotels and property company, who were appointed by Cerberus.

KKH claims that Mr Neporent, who is a director of Kokusai Kogyo, and former directors Kazuhiko Kawai and Toshikiyo Shimuzu had violated their fiduciary duties, resulting in losses to Kokusai Kogyo (KK) of Y52.6bn.

KKH alleges: “The defendants allowed Cerberus to drain KK’s corporate value by selling away its valuable assets and [imposing] unnecessary refinancing and other expenses on KK group”.

Cerberus said that it could not comment on legal cases but added it was extremely baffled by the lawsuit.

The lawsuit comes as Cerberus has been battered by problems in the US, particularly its investments in Chrysler, which filed for Chapter 11 bankruptcy protection and GMAC, which has had to be bailed out by the US government.

The private equity group has been one of the most active distressed investors in Japan, acquiring a controlling stake in Aozora Bank and 32.4 per cent in Seibu Holdings, owner of Seibu Railways, among others.

KK, which is 55 per cent owned by Cerberus and 45 per cent by KKH, is best-known for its bus services and its hotels, which include the Royal Hawaiian, also known as the “Pink Palace.”

KKH alleges that the Cerberus-appointed directors led KK to replace debts owed to Cerberus with a Y200bn loan from Wachovia at much higher interest rates.

While KK was paying 0.1 per cent to 0.2 per cent interest on the debts to Cerberus, it is now paying between 7 and 8 per cent interest on its loans from Wachovia, resulting in a loss of Y25.5bn, said Yoshihiko Fuchibe, a lawyer representing KKH.

KKH also claims that the three defendants led KK to sell its 33.2 per cent stake in the Imperial Hotel, Tokyo, to Mitsui Fudosan, a leading real estate developer, even though KKH says that there was another prospective buyer who offered a higher price.

The sale of what was then KK’s most valuable asset resulted in KK’s loss of Y12.3bn, the plaintiff claimed.

A further complaint is that the defendants used the proceeds from that sale to redeem preferred shares issued to Cerberus, rather than repay loans, which were costing KK substantially more in interest. As a result, KK has lost about Y14.8bn, according to KKH.