If you are asked to guess the one major hedge fund that spends a great deal of time in courts, battling on several fronts, the answer would be none other than Paul Singer’s Elliott Management. With many conquests with companies and sovereigns under its belt and a ton of them running in court, this hedge fund is very busy. Right now, Paul Singer’s activist hedge fund has come up in news based in at least four separate cases.
Take a look at how Elliott Management and others performed in September.
Elliott loses one against Irish bank
Most recently, a U.S bankruptcy court rejected Elliott’s request for more information about Irish Bank Resolution Corp’s liquidation and what actually caused its sudden demise. The Delaware judge ruled that the court was not interested in analyzing Ireland’s legislative and executive procedures at this time, reported Tom Hals for Reuters.
Elliott held subordinated IBRC debt worth $75 million, and is not happy with the way IBRC was hurriedly and covertly wound down, through a late night legislation that was approved by the Irish Parliament in February 2013. IBRC was a make-shift setup to keep the assets of Anglo Irish Bank, whose bankruptcy nearly brought Ireland to the brink of default. The hurried liquidation of IBRC has undervalued the assets held by its creditors and therefore they are not happy.
Elliott continues to juice more from Lehman
Elliott has been one of the largest holders of Lehman Brothers credit and has sought to buy more through a number of ways in the past. Lehman debt was the largest position in Paul Singer’s portfolio at one point. Earlier this month Elliott agreed to buy Lehman U.K claims for $1.05 billion. The claims were bought from the U.K arm of Lehman Brothers and can be worth $2 billion. Paul Singer’s mastery in distressed debt investment continues to profit even five years after Lehman’s liquidation.
Take a look at how Seth Klarman’s Baupost Group is getting rich from Lehman.
Holding out in Germany as well
Elliott Management has been the dissatisfied creditor or shareholder in a variety of cases now—the other court battle the fund is fighting is in Germany. Elliott is the largest shareholder of a German cable operator which was bought by Vodafone recently. The hedge fund increased its position in the company just weeks before the Vodafone’s tender offer was set to expire. The fund, which holds 11% of the German company’s shares, apparently did not tender a single share in the offering and chose to ask a higher price and wants to take the matter to German courts.
Elliott has played this game before in Germany—the hedge fund sued Terex Corporation (NYSE:TEX) which bought Demag Cranes AG last year in a similar tender offer. Along with a bunch of other shareholders Elliott asked for a higher pay-off on its 12.7% stake in Demag.
Another legal fight that the hedge fund is involved in is with Universal Studios. According to the Hollywood Reporter, Elliott Management has accused Universal of fradulent accounting. The hedge fund has been a major backer of the production house and has invested millions of dollars in the company since 2005.
Negotiations with Argentina
And to cap it all off, everyone is abundantly familiar with Paul Singer’s decade-long tussle with the government of Argentina. Elliott and its subsidiaries have held Argentine bonds worth face value of $630 million, which the fund now claims are worth over $1.3 billion. This has been a long and drawn-out battle which has included a lot of drama from both sides. Earlier this week, the U.S Supreme Court refused to accept Argentina’s appeal to reverse the decision that required the sovereign to pay in full to the holding out creditors. While Argentina will of course appeal again, there has been a change of tone from Elliott’s side. Senior PM Jay Newman said in an op-ed published in the Financial Times, “We remain willing to engage in discussions, and we believe we could reach a beneficial resolution. But we need a partner on the other side of the table.”
Newman also said that an end to this longstanding issue will bring more investment in the country and will curb inflation. He also appeared on CNBC yesterday, where he said that an Argentine default does not make any sense and it can be avoided.