Friday, 25 July 2014
Last updated 29 min ago
Jun 30 2011 | 4:36pm ET
Amidst a very bleak year, yesterday proved a rather bright one for Paulson & Co.
The $36 billion hedge fund, which has struggled through the first half of 2011 with big losses, punctuated by the allegation that one of its key portfolio companies misled about the amount of timberland in China it controls, got two much-needed pieces of good news yesterday. First, Bank of America settled a major lawsuit stemming from Countrywide Financial-issued mortgage-backed securities. Then, a federal bankruptcy court gave the firm more time to get a group of luxury resorts it bought in January out of bankruptcy.
Today, firm founder John Paulson said he welcomed the $8.5 billion BofA settlement. His hedge fund owns a roughly 1.22% stake in the bank.
“While we don’t comment on positions between public quarterly filings, we believe it is positive that Bank of America is seeking to put legacy mortgage issues behind it so that investors can focus on the power of future earnings.”
Meanwhile, a federal bankruptcy judge rejected a bid from Singapore’s sovereign wealth fund to buy five of the resorts acquired in foreclosure by Paulson and several other investors. That gives Paulson more time to come up with a plan for the resorts, in which the Government of Singapore Investment Corp. is a major creditor.
“The debtors do get a chance to do what Chapter 11 contemplates,” U.S. Bankruptcy Judge Sean Lane said. GIC had sought an end to the Paulson group’s control of the bankruptcy proceedings, arguing that prolonging the case put it and other creditors at risk.
Of course, in a year with much to cheer about, there was at least one caveat to yesterday’s good news: Paulson, CNBC reported today, has dumped a “substantial portion” of his BofA stake over the past two months, missing out on yesterday’s short-lived spike in the stock’s price. Still, sources told Reuters that the reported sell-off was an exaggeration.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…