Investor Sues Falcone Over Share Swap
by Paula Schaap, Senior Reporter, December 23, 2010
by Paula Schaap, Senior Reporter, December 23, 2010
As though he hasn’t had enough grief to finish the year, hedge fund manager Phil Falcone is being sued by an investor over a stock swap he engineered.
Harbinger Group shareholder Alan Kahn, who has made a career out of shareholder lawsuits, sued in Delaware Chancery Court this week, according to Reuters.
The suit claims that a stock swap between Falcone’s holding company Harbinger Group and consumer products company Spectrum Brands Holding, which is owned by Falcone’s hedge fund, is unfair to shareholders.
Kahn’s attorney declined to comment further on the lawsuit.
Falcone used the swap as part of a bond sale that raised $350 million.
The share price of Harbinger Group has risen about 37% since Falcone arranged the swap, closing at $6.09 per share Wednesday.
A spokesman for Harbinger and Falcone said in a statement, “This is a thoroughly meritless lawsuit as to which we intend to seek dismissal at the earliest opportunity. This transaction was reviewed at Harbinger Group Inc. by an independent committee of directors advised by outside financial and legal advisors.”
But the lawsuit piles onto other troubles dogging the hedge fund manager. Investors, reportedly upset about a $113 million loan Falcone took from his special situations fund to pay a personal tax bill, have been pulling money out of the fund.
Go to Reuters article
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Falcone Raises $350M With Bond Sale
Harbinger Group shareholder Alan Kahn, who has made a career out of shareholder lawsuits, sued in Delaware Chancery Court this week, according to Reuters.
The suit claims that a stock swap between Falcone’s holding company Harbinger Group and consumer products company Spectrum Brands Holding, which is owned by Falcone’s hedge fund, is unfair to shareholders.
Kahn’s attorney declined to comment further on the lawsuit.
Falcone used the swap as part of a bond sale that raised $350 million.
The share price of Harbinger Group has risen about 37% since Falcone arranged the swap, closing at $6.09 per share Wednesday.
A spokesman for Harbinger and Falcone said in a statement, “This is a thoroughly meritless lawsuit as to which we intend to seek dismissal at the earliest opportunity. This transaction was reviewed at Harbinger Group Inc. by an independent committee of directors advised by outside financial and legal advisors.”
But the lawsuit piles onto other troubles dogging the hedge fund manager. Investors, reportedly upset about a $113 million loan Falcone took from his special situations fund to pay a personal tax bill, have been pulling money out of the fund.
Go to Reuters article
Related Stories
Falcone Raises $350M With Bond Sale
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