Hedge Fund's Company Town Votes To Split

Sep 1 2011 | 11:11am ET

When Marathon Asset Management helped acquire the assets of the Pacific Lumber Co. during its bankruptcy two years ago, it wound up with a unique asset—a town of its own.

The hedge fund bought Scotia, Calif., a company town founded and owned by PALCo., which went bankrupt in 2007. That had Marathon doing some unusual things for a hedge fund, among them maintaining public spaces and handling repairs for all houses in the town of 800 about 250 miles north of San Francisco.

But that's all coming to an end. Scotia's residents (by a vote of 136-9) have decided to cut ties with Marathon. Instead of being governed by Marathon subsidiary Town of Scotia Co., the new community services district will be helmed by five board members elected Tuesday.

California's last company town will cease to be such in December. Marathon will sell the town's homes—all rented—to their tenants over the next several years, as well as upgrading its sewer system.


In Depth

Q&A: Reg A+ Will Transform the Alternative Asset Landscape

Jul 7 2015 | 4:03pm ET

In addition to easing capital formation for small companies, Regulation A+ has enormous...

Lifestyle

Fiat Chrysler Files Paperwork For Ferrari IPO

Jul 23 2015 | 5:05pm ET

Italian sportscar maker Ferrari has taken a step closer to a stock market listing...

Guest Contributor

Lifting of Foreign Ownership Limits Signals Sea Change in Vietnam's Capital Markets

Jul 28 2015 | 3:01pm ET

The lifting of restrictions on foreign ownership limits in Vietnam later this year...

 

Editor's Note