Hedge Funds Face $525 Million Clawback as Appraisal Bet Sours

Dozens of hedge funds face having to repay hundreds of millions of dollars combined to a Chinese recruiting firm if a ruling is upheld on appeal that the company was overpriced.

The high-stakes legal fight over 51job Inc. could force the group, including Oasis Management Co., Pentwater Capital Management and Alpine Global Management, to return about $525 million that the company paid them in advance for their shares, according to people familiar with the matter.

The group of money managers, which also included Millennium Management and Man Group Plc, argued that the $61 per share paid ...