Friday, 29 May 2015
Last updated 8 hours ago
Jan 31 2007 | 11:47am ET
The son and brother of presidential candidate Sen. Joseph Biden (D-Del.) have been sued by a former business partner, accusing the pair of fraudulently excluding him from their purchase of $500 million fund of hedge funds firm.
Anthony Lotito, in a complaint filed in New York Jan. 5, charges that the R. Hunter Biden and his uncle James lied to convince him to accept a buyout from their three-way partnership at the same time they were negotiating a better deal for New York-based Paradigm Cos., the parent of the fund of hedge funds, Paradigm Global Advisors. He’s seeking $100 million.
Lotito’s complaint also tells a very different story about the purchase of Paradigm, one that Sen. Biden is not likely to want to hear on the day he announced his candidacy for the nation’s highest office. According to Lotito, he introduced the Bidens to Paradigm executives after Hunter Biden’s father expressed concern that his son’s lobbying activities would be problematic during his presidential run.
The trio formed a partnership and in May, agreed to buy Paradigm for $21.3 million. Contradicting Hunter Biden, who stepped down as Paradigm’s interim CEO this month and said he never intended to give up lobbying, Lotito said the plan had Biden serving as the permanent president and CEO, with a $1.2 million salary. He remains the firm’s chairman.
In September, Lotito said he sold his stake in LBB Holdings USA, the Washington-based partnership, to the Bidens after they rejected several third-party investors and claimed LBB had “substantial liabilities.” In fact, according to the complaint, the pair had agreed to buy Paradigm in August for just $8.1 million.
Lotito alleges that the Bidens were obligated to tell him of their competing bid, which he accuses them of failing to do.
The Bidens’ laywer, Vincent Syracuse, told Bloomberg News that Lotito’s lawsuit was just sour grapes. “Before Mr. Lotito brought this lawsuit, he made an agreement with Hunter and James Biden severing what had become an unhappy business relationship with them,” he said.
May 27 2015 | 2:15pm ET
Support Hedge Funds Care, also known as Help For Children (HFC), by participating in this year's raffle. All proceeds go to support HFC's mission of preventing and treating child abuse. Read more…