Pop quiz: you're a hedge fund manager named Phil Falcone. Your relationship with your investors has been on the downhill since you loaned yourself $113 million from a gated fund in order to pay personal taxes you didn't set aside enough cash to cover. You apologized after the fact but apparently that wasn't good enough, because they'd already moved on to freaking out over your decision to tie up much of their capital in a side project building walkie-talkies that might not pan out on account of the growing opinion that it might kill a few people. A bunch of them asked for their money back and although you weren't really in a place to be offering any cash refunds, in July, you came up with what you thought was a pretty genius alternative plan to offer them, in place of actual money, illiquid LightSquared equity. Great idea, right? You thought so, too, but noooooo, they didn't like that.

At this juncture, most money managers would've said, you don't like that? Well door number two is the option to go fuck yourself. But not you. Even with everything you've got going on, from your pissy investors to getting killed on the walkie-talkies, to the boss riding you, to a prima donna named Wilbur who doesn't let a day go by without not only letting you know he's got options but flaunting them in your face, you went back to the drawing board. And there, you came up with something even better.

Harbinger Capital partners LLC, the $6 billion hedge fund run by Philip Falcone, told clients who’ve been unable to withdraw all their money for almost three years they can sell their stakes to a third party, according to a letter obtained by Bloomberg News. “We are exploring several options in an attempt to accommodate investors,” Falcone said in the letter, dated yesterday. Harbinger, based in New York, said it would put investors in contact with unnamed “potential purchasers” who have approached the firm. It also will allow investors to strike their own deals with other bidders they may find. Transactions are subject to final approval by Harbinger, the firm said.

If anyone thinks this whole "we know a guy" thing sounds like just a bunch a smoke, think again. We have it on good authority that Phil has indeed has been making the weekend rounds at the Tri-state area's best garage sales and flea markets for guys that might be in the market for quirky little numbers. If you think you can do better unloading this stuff yourself, as stated in the letter, be his guest.

Harbinger to Allow investors to Sell Stakes in Locked-up Funds [Bloomberg Brief]