Leon Cooperman’s Omega Partners lawsuit against Tetragon Financial Group Limited (AMS:TFG) (OTCMKTS:TGONF) has been thrown out, ending a nasty fight.
Legal issue centered on Tetragon’s purchase of Polygon
The legal issue centered on Tetragon’s purchase of Polygon Management and fees paid to related parties.
New York based Omega had charged that Tetragon’s co-founders, Patrick Dear and Reade Griffith, who also co-founded Polygon in 2002, generated of millions of dollars from the sale of Polygon to a related party in Tetragon. Dear and Griffith were then accused of using $150 million of Tetragon’s cash to buy back nonvoting Tetragon shares, the lawsuit noted. Omega was the largest shareholder in Tetragon.
Tetragon’s lawsuit related party transactions and corporate governance
The lawsuit raised issues with related party transactions and corporate governance. In its lawsuit Omega wanted unspecified damages along with an order directing Tetragon’s board to change its corporate governance practices and alter the Polygon transaction to prevent what Omega said was the alleged illegal diversion of its assets. In a 2011 interview with Bloomberg, Cooperman described Tetragon Financial Group Limited (AMS:TFG) (OTCMKTS:TGONF) as “abusive to stockholders as anyone I’ve ever seen.”
Tetragon’s board of directors said in an August 11 statement that they “believe that Mr. Cooperman has been repeatedly untruthful in his dealings with the company,” and noted the Court itself stated that “Cooperman may have been dishonest in his communications with Tetragon and that he may be prone to sophistry while under oath.”
“We are pleased that this nuisance lawsuit has been dismissed,” Jonathan Gasthalter, a spokesman for Tetragon at Sard Verbinnen & Co., was quoted as saying in a Bloomberg report. “Tetragon remains focused on creating long-term value for all of its shareholders.”
Anthony Bozza adds Tetragon to his exposure
Tetragon Financial Group Limited (AMS:TFG) (OTCMKTS:TGONF), a publicly traded fund that invests in high-risk leveraged loan funds, picked up a new investor before the court ruling was announced, as the founder of Lakewood Capital Management, Anthony Bozza, added to his exposure, as reported on July 29, and as confirmed recently by VW.
In an investor letter, Lakewood said they expected the stock price to double if the assets in which Tetragon invests perform as expected and the company buys back stock at discounted prices.
“There is little doubt this management team is greedy, and we are hopeful that this greed will finally be for the benefit of shareholders,” Bozza was quoted as saying in the report. Bozza noted that “if the stock trades at its forward net asset value of $20 per share, the Tetragon management team would have a stake worth over $400 million.”