So Phil Falcone Took Out Another Loan, So What?

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The last month or so has not been the best of times for Phil Falcone. Harbinger Capital’s flagship is down, Goldman Sachs, Blackstone and some others have pulled their money, investors have been giving him shit for borrowing $113 million from one of his funds (where redemptions had been frozen) in order to pay personal taxes, he had to put up his art as collateral to borrow even more cash (for what, it’s unclear), he’s being investigated by the SEC and Wilbur, the family's dancing pig, has been such a god damn bitch. He told the Times none of this is any way a big deal (“The last thing I’m thinking about in the morning is whether I have a cash-flow problem,” he said) and now, he's be forced to defend his liquidity again. This time, with regard to the mortgage he took out on his house over the summer, after buying it for $49 million in cash.

According to documents filed with the New York City Department of Finance, Mr. Falcone and his wife took out a $22.5 million mortgage on their upper-east side townhouse this summer. According to the documents, the Falcones received the 30-year adjustable-rate mortgage, at an initial interest rate of 2.357%, from Citi Mortgage on May 20, 2010. It is the only mortgage on the home, located on East 67th St. The Falcones bought 27-room mansion in 2008 for a reported $49 million in cash — making it the second most expensive home ever sold in Manhattan. The Falcones spent more than a year renovating the home, formerly owned by Penthouse Magazine founder Bob Guccione.

In a statement, a spokesman for Mr. Falcone said “This is a normal ordinary course mortgage financing on Mr. Falcone’s home that was completed seven months ago and has no relevance to Harbinger Capital Partners’ business or its investors."

So get off his ass! Rather than suggest Phil or Harbinger Capital are having money problems we should 1) applaud him for his creativity (obviously the rationale was to borrow at 3%, invest it, make 10% and pocket the difference) and 2) preemptively THANK him for the nice things** he's going to buy everyone with the return on the money.

**Your very own Wilburs, which do not come cheap.

Related

Phil Falcone Maintains 'Absolute Lawfulness' Of Lending Himself A Hundred Mill From Investor Fund

Remember, back in 2009, when Phil Falcone realized he'd forgotten to set aside enough cash to cover his taxes and came up with the idea to loan himself the money from a gated investor fund? And investors got all bent out of shape about it and the SEC did too? If the former was looking for some sort of an apology and the latter was looking for some show of groveling (in an attempt to avoid paying a fine/have a judge rule he can't come within 200 feet of a public company sorry), sorry, 'cause Phil's not sorry.

Phil Falcone Is Turning His Life Around

To put it lightly, the last couple years have been a rather dark time for Phil Falcone. Though his woes are too numerous to mention in full, they include: the adversity he's faced in getting people to believe in LightSquared; his unbelievably pissy investors, who still aren't over the time he borrowed $113 million from a gated fund to pay personal taxes, or offered to pay out redemptions in illiquid LightSquared equity; the Securities and Exchange Commission, which wants him banned from the industry for life; the woman who once offered a respite from it all, who now won't even come out of her room when she knows he's home; and, of course, the plunging returns in his once highly profitable hedge fund. It would be enough to make a grown man say 'Fuck, it. I'm done.' Put a few things in a sack, tie it to the blade of a hockey stick, and hitchhike back to Minnesota. But Phil didn't do that and now? After a merciless storm of shit that felt like it would never ease up? After long days of investors and regulators breathing down his neck and nights of having to pound on the front door because he was accidentally purposely locked out of the house? The tide feels like it's turning for Philip Falcone. Beleaguered hedge fund honcho Phil Falcone’s big bet on his own publicly traded entity, Harbinger Group, is helping to lift his troubled hedge fund, Harbinger Capital Management, out of the deep end. Falcone’s flagship fund posted returns of 10.6 percent in July and a whopping 28 percent gain in June. Of course, he's still down 5.8 percent year-to-date, and the the director of the SEC's division of enforcement wants hedge fund graduate schools to use Harbinger as a case study during the unit on "how to operate a hedge fund unlawfully," but tonight? Tonight he tells Lisa to treat herself to something nice. Tonight he tells Wilbur to pull the baby grand out of the closet, where it's sat untouched for months. Tonight his key works in the lock. Tonight we dance. Phil Helps Himself [NYP]