Baupost Blocking $8.5B BofA Mortgage Settlement

Dec 12 2011 | 12:52pm ET

Baupost Group and Bank of America agree on at least one thing: The hedge fund is doing its level best to sink the bank's proposed $8.5 billion mortgage bond settlement.

At a court hearing last week, a lawyer for Bank of America said that Walnut Place, the group seeking to block the settlement and remove the case to federal court, is actually Baupost, "known as a distressed debt or sometimes a vulture fund." On Friday, Baupost told its clients that it was, in fact, Walnut Place.

Baupost, or its Walnut Place alter-ego, is opposing the deal, which would resolve most of BofA's legal headaches from its 2008 purchases of Countrywide Financial Corp. More than 20 institutional investors have signed up to the settlement, seeking to impose it on other investors.

But Baupost doesn't plan on going so easily.

The Boston-based hedge fund did deny a rumor that it was shorting BofA, telling investors "we currently have no long or short position in equity, corporate debt or credit default swaps of Bank of America."


In Depth

Steinbrugge: Will Hedge Funds Help or Hurt During the Next Market Correction?

Sep 7 2016 | 11:55pm ET

Most investors have become accustomed to quick rebounds when markets correct, but...

Lifestyle

Quattrex Sports AG Debuts Soccer-Focused UCITS Fund

Sep 9 2016 | 9:54pm ET

Innovative alternative investment company Quattrex Sports has unveiled a new UCITS...

Guest Contributor

Malik: The Ever-Changing Middle Market and The Entering Class of 2016

Sep 2 2016 | 5:01pm ET

Deal sourcing and origination is only going to get more competitive given current...