As you likely heard, Philip Falcone was sued last week by a former mid-level employee. Howard Kagan claims he didn’t get paid enough after he stopped working for Harbinger Capital Partners, and that Falcone owes him something in the ballpark of $62 million. According to sources close to Kagan and inside Harbinger, the Guccione mansion-dwelling fund manager doesn’t owe the guy near that amount, and that Howie-boy has yet to find a new job. And while court documents show Kagan claims he was let go without cause, many involved in the drama say he was clearly fired for non-performance. “The street knows he’s toxic. Who would want to hire him after he’d been booted from Harbinger,” says a person familiar with the situation.
Kagan began working with Falcone in 2003 as an independent analyst, at which time the firm deemed his investment consulting advice was worth only $20,000 a month. A year later he made it onto the expanding hedge fund’s staff to help analyze distressed companies and after two years was award some equity interest in the fund. Contrary to other media reports, Harbinger confirmed Kagan never wore the chief investment officer hat (a role that belongs to none other than Falcone).
Sources inside the firm also say a report in the New York Post claiming Kagan was offered half of what he thinks he’s owed, $32 million, as a veil threat to not sue Falcone and his partners is flat out not true. In what now appears to a smear campaign against Falcone to taint him as a deadbeat boss, a New York based public relations firm representing hedge clients leaked a copy of the Kagan suit to the Post before it was filed in Manhattan Supreme Court.
Late last summer, as the market was sliding deeper into the red from the credit crisis, Kagan emailed Falcone in an attempt to make his firing seem amicable and to inquiry about the payment he thought he was owed. Court documents reveal Kagan wrote Falcone,”… [as] far as I’m concerned.. I don’t believe we have any issues.”
On, September 1, 2008, Falcone emailed Kagan back saying, “[y]ou will get your money and that’s that. We have terms, a charter and a contract that everyone abides by.”
Kagan, like his fellow equity partners in the fund, was contracted to be paid on the hedge funds performance at the end of the 2008. Harbinger’s funds rose to a 45 percent gain mid 2008 yet ended in the red at negative 27 percent. Kagan’s suit reads he was upset that he couldn’t get what he thought were millions he was entitled to out of the fund while it was booking double digit positive returns, and about the fact that he had to wait till the end of the year like the rest of the partners.
One Harbinger employee who spoke on the condition of anonymity said, “Kagan lost us more money than he ever made us.”
I’m on Falcone’s side on this one.
And can DB please switch the default “Guest” to “Autonomous”?
great reporting
Turning and turning in the widening gyre;
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned;
… William Butler Yeats or Dick Van Patten
savage tan on that guy- no wonder the sun bleached his hair out!
“a nice maple syrupy color…”
Just give Bonaduce his cash before someone gets hurt….
just another douche looking for jackpot justice
Who in their right mind hires that guy…I mean look at him.
Isn’t Falcone the evil genius who came up with the plan to tap into the City’s water supply and spike it with hallucinogens?
@7- have you seen falcone?
Who is Teri Buhl?
@8, try again.
Teri Buhl = a NY Post wall street reporter in 08, who now reports at housingwire.com
Broke stories on Falcone before and lots of other top banking news.
Ok just a little nit-picking, when a “PR” firm intentionally provides a media outlet with information, I don’t think that qualifies as “leaking.”
Otherwise, yea, carry on.
@analyst– you miss the point. the nypost believed it was a leak b/c they thought the pr firm was giving them confidential, non-bs info. which it clearly wasnt.
@7 — true that. I’d never hire that guy. I wouldn’t want to look at his pale ginger a$$ all day. But I guess if everyone used that standard, Janet Reno never would have been hired by Bill. That chick was for sure a dude. But hey, maybe Bill liked to experiment a little….
I’m looking at a Harbinger pitchbook from ’07 – and it dedicates an entire slide to Howard P Kagan – Managing Director and Director of Investments. He was not just “mid-level” employee.
@14
Don’t agree. When you get something from a PR firm don’t believe one word they are saying, especially if they tell you it’s confidential.
Steve Bruce at Abernathy MacGregor runs the press for the law firm (Lowenstein Sandler) Kagan is using. As a former journalist who’s had to fact check with this ‘new york press man’ before I can see why the New York Post was fed some bad info on the Kagan lawsuit. At least Dealbreaker followed the story through (with a professional journalist) to report out some fun facts on this hedge fund battle.
Nice Reporting DB!
I personally knew Howard growing up as kids. He was honest and a good student. His family was middle class. Howard has earned everything he has in life, no silver spoon here. You bashers have no idea who this man is, you are all probably just jellous.
This guy is a ruthless lying cheat!!!!!
Howard and Janet Kagan are the worst kind of people there are. I too knew them personally and I have never been happier about parting ways with someone. Howard is an abusive ego-maniac with serious entitlement issues and his wife makes a fool of herself standing by a man who would throw her under a bus the first chance he got. I feel sad for their kids…they never stood a chance with those two pigs.
What a disgusting human being…Howard Kagan is now coaching his brother in-law to do the same thing. His brother in-law a "mid-level employee" is running a smear campaign against his former employer and suing for millions. I guess integrity is foreign word to this family..Disgusting doesn't even begin to characterize this family.
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