Dan Loeb's Lawyer Is Waiting In Line At The Eiffel Tower, Doesn't Have Time For Your Sh*t

Author:
Updated:
Original:

As you may have heard, over at Vanity Fair today you will find a profile of hedge fund manager Dan Loeb by William D. Cohan, titled "Little Big Man." It's kind of unflattering! Among other things, Loeb is described, by his peers, as "Machiavellian," being possessed of a "Napoleonic" complex, and "the Kanye [West] of Wall Street." With the exception of his mother and Anthony Scaramucci, none of the people quoted re: Loeb's character had very nice things to say, instead noting that:

  • "He is just long and loud. He took a position and then started screaming and trying to force some change."
  • "Loeb can write the most obnoxious letters on the planet, make up shit—[because he does] not really care … whether or not you hurt people or don’t hurt people. You just don’t care. The only thing you care about is making money on their stock. . . . [His letters] were juvenile, sophomoric, and cringe-making. Horrible. If you’re a decent member of society you [don ’t do] shit like that."
  • "He never, ever in a million years would have written these [Bloomberg] posts back in 2008 when he was down nearly 50 percent and nearly blew up. That was a humble Dan Loeb, who never would have gone out making enemies needlessly."
  • "The guy almost went out of business in 2008. . . . I think what happened was he had a good couple of years. He bounced back. He put up some good numbers, and I just think his ego has gotten so out of control. . . . With the fund doing well, I just think it’s completely gone to his head, and he surrounds himself with a bunch of sycophants."

The person who has the most to share, though, is Loeb's former friend Bob Chapman* (who is not so different from Loeb in his love of layingintoCEO's and dialing into earnings calls to ask companies to comment on alleged 'ass rapings'). The most amusing part of Chapman's commentary on all things Loeb is his habit of adding a back-handed compliment or striking a self-deprecating note to soften each of his mildly to majorly devastating blows:

On Loeb only having one skill, which Chapman would trade his many skills for:

“Here’s the thing about Dan,” he says. “He’s smart not in the way of some 180 I.Q. kid from M.I.T. who immediately grasps complex derivatives or investment scenarios. His brain is not wired that way. However, he does have unparalleled judgment on when, why, and how much capital to deploy into a particular investment—what’s going to work and what’s not going to work. Believe me, I’d rather have that one instinct than all of mine combined.”

On Loeb surpassing the bar Chapman says he himself set for acting like a prick.

Some people think Loeb’s hostile behavior may derive from feelings of insecurity. “Given Dan’s extraordinary success, his behavior can be extraordinarily odd, and coming from me that says something,” says Chapman. “If I had to guess, he sees himself as a phenomenal filterer of other people’s investment ideas, and maybe that’s the source of a behavior normally attendant on someone hopelessly insecure.”

On that time Loeb supposedly called Chapman crying after being detained in Cuba for hitting a kid with his car, an incident during which Chapman's heart truly went out to the guy, who Chapman is pretty certain would never have intentionally run down a child. He's a monster, sure, but he's not mowing over locals for kicks!

In March 2002 there was a strange blip in Loeb’s biography, when he traveled to Cuba with his friend Alexander von Furstenberg (son of the designer Diane von Furstenberg, a Vanity Fair contributor) for what was supposed to be a long weekend. Things unexpectedly took a dark turn, and according to a lawsuit later filed by Youlia Miteva, a former Third Point analyst who accused Loeb of breach of contract, among other things, “Cuban authorities had refused to allow him to leave.” Asked what had happened in Cuba, Loeb told me earlier this year, for a previous Vanity Fair story, that he had been involved in a car accident, stuck around for a couple more weeks, had a legal hearing, and everything turned out fine. But, according to Chapman, a desperate and sobbing Loeb had called him from Cuba, where he was confined to his hotel after the accident. “I remember how scared Dan sounded when describing the incident involving his hitting a local Cuban kid with his car,” recalls Chapman. “I truly felt so sorry for him when he told me he had found himself unable to leave the country, curled up in a ball on the floor of his room crying, promising God that he’d do anything if the Almighty got him out of his predicament. It wasn’t as if Dan had done it on purpose, and who really knows what ended up happening to the kid?”

Obviously there's a lot here that Loeb and/or his representatives might not be happy with, but it's the last anecdote that really got his lawyer fired up, particularly as it ate into his time in the City of Light.

Loeb’s friend, art dealer Christophe Van de Weghe, insisted to the Post: “I was with Daniel Loeb in Cuba at the time of the accident and the period following. I state categorically that Daniel was never in jail . . . and that the child involved in the accident was not killed. These statements are malicious and defamatory.” The incident is also described in Michael Gross’ upcoming book, “House of Outrageous Fortune.” Gross writes, “He’d been in a car crash, and that he’d ended up in jail until he was bailed out by another financier” after seven weeks. Loeb’s pompous lawyer Matthew S. Dontzin said: “The statements you attribute to Mr. Chapman, Gross and an ‘unidentified source’ are entirely untrue, defamatory and libelous, and will be treated as such . . . I am in Paris and I don’t have any more time to talk to you, lady.”

Little Big Man [VF]
Tycoon was ‘held in Cuba after hitting kid with car’ [NYP]

*Somewhat related, best WSJ correction ever goes to:

"Corrections & Amplifications

CHAPMAN CAPITAL LLC didn't state in a 13D filed with the Securities and Exchange Commission that it had earned $1.4 million from trading in Footstar stock. The $1.4 million estimate in a Jan. 28 Money &Investing article actually was taken from an article on TheStreet.com and should have been attributed properly. Chapman Capital hasn't specified the correct number. The offices of Robert Chapman, head of the firm, aren't decorated with sharks teeth and he doesn't liken himself to the fictional characters Darth Vader and the Terminator, as incorrectly stated in the Jan. 28 article. The article incorrectly attributed certain comments to a representative of the firm who had been identified as Robert Lewis; after publication, Mr. Chapman said he had made those comments himself."

Related

Memo To Yahoo: Dan Loeb Will Personally Shake Out ALL The Skeletons In Your Closet If He Has To

As you may have heard, Third Point Management is currently waging a proxy battle against Yahoo, of which it owns 5.81 percent. Last September, the hedge fund and its founder, Dan Loeb, wrote a letter to the company's board of directors entitled "The Failures of Yahoo’s Board of Directors Necessitate a Significant Infusion of Fresh Board Talent," in November it demanded two board seats in order to rest the ship from a bunch of bumbling incompetents, and in February, it said actually, make that four seats. Unfortunately, Yahoo resisted. Which is why yesterday, Loeb and Third Point were forced to enter into the record some damning evidence showing current YHOO CEO Scott Thompson to be a dangerous, dangerous liar, the likes of which the search engine would be wise to sever ties. Specifically, Third Point revealed that contrary to statements made on SEC filings, Thompson? Did not graduate from Stonehill College with degrees in both computer science and accounting but only the latter. The reason Third Point knew this to be true was because it Googled Stonehill College and found that the school did not even start offering computer science degrees until 1983, well after the time Thompson graduated. So, a liar and a liar who can't even be bothered to cover his tracks to boot. Oh, but the résumé chicanery did not stop there. Yahoo director Patti Hart, Third Point, went on to reveal, also had her own little C.V. "error" to speak of. Whereas Ms. Hart claimed to have graduated from Illinois State University with degrees in marketing and economics, in fact, merely earned a bachelors in business administration and specialized in marketing and econ. Yahoo, which yesterday confirmed the résumé duplicity, clearly needed no further substantiation that these two were academic frauds. Third Point and Loeb knew this much to be true. AND YET. As of 2PM today, a whopping twenty-four hours after their lies caught up to them, they remain employed by the company. So now this is happening because apparently some people need to be put on a deadline: Dear Board of Directors: Yahoo!’s initial response yesterday to Third Point’s identification of material inaccuracies in both CEO Scott Thompson’s and Director Patti Hart’s educational record was insulting to shareholders. We assume that these initial statements were attributable to Mr. Thompson and were not made with the Board’s approval. While we appreciate the Board’s statement late last night that it would conduct an investigation, unfortunately, for this Board and this Company, it is too little and months too late. To assert that years of inaccurate SEC filings, website biographies and, most likely, D&O questionnaires and curriculum vitae (including, presumably, the CV provided to Yahoo! when Mr. Thompson reached out for the job) were “inadvertent” is, in our view, the height of arrogance. Mr. Thompson and the Board should make no mistake: this is a big deal. CEO’s have been terminated for less at other companies. The Company’s Preliminary Proxy Statement filed on April 27, 2012 (at page 22) states that the “minimum qualification for service as a director of the Company are that a nominee possess...an impeccable reputation of integrity and competence in his or her personal and professional activities.” Furthermore, Yahoo!’s response “confirming” that Ms. Hart “specialized” in Marketing and Economics, rather than having earned her degree in such subjects (as Ms. Hart has asserted in filings for years) is a similar canard. A “specialty” is not a major. It is not a “minor”. We don’t know what it is, but we do know that like Mr. Thompson, Ms. Hart has been misrepresenting her actual degree to the investing public for years. Again, we hope that the Board does not accept this feeble attempt at “spin” as a justification for Ms. Hart’s misrepresentations. Irreparable damage to Yahoo!’s culture will continue every day that the Board allows Mr. Thompson and Ms. Hart to remain at the helm of the Company after having clearly demonstrated that they lack even the “minimum qualifications for service as a director of the Company.” Mr. Thompson, in particular, cannot possibly have any credibility remaining with the all-important Yahoo! engineers, many of which earned real – not invented – degrees in computer science. Moreover, permitting Mr. Thompson and Ms. Hart to stay with the Company after apparently violating the Code of Ethics sends a message to all Yahoo! employees that a different set of rules applies at the top. Third Point, Yahoo!’s largest outside shareholder with over $1 billion invested, called yesterday for an immediate investigation if our assertions were true. The Board appears to have acceded to this demand. Its response must be swift and decisive. In that regard, Third Point will consider it grounds for further action if the Board does not take the following steps by Noon EDT on Monday, May 7th: 1) Publicly reveal the process by which it vetted Mr. Thompson as a potential CEO candidate. This disclosure should include the release of all minutes of any meeting at which Mr. Thompson’s candidacy was discussed and any reports or other materials upon which directors relied to evaluate Mr. Thompson’s candidacy. 2) Disclose whether any Board member, including Maynard Webb, who has long-standing ties to Mr. Thompson, and Ms. Hart, who headed the Search Committee, was aware of Mr. Thompson’s deception prior to receipt of Third Point’s letter yesterday. 3) Provide shareholders with all information regarding the director nomination process, including the so-called “skills matrix” referred to in the Company’s preliminary proxy statement, which the Board purportedly used to determine the qualifications of various candidates, including Third Point’s nominees. 4) Terminate Mr. Thompson for cause immediately given his demonstrable unsuitability to remain Chief Executive Officer and a director of Yahoo! and accept the resignation of Ms. Hart for similar reasons. Finally, we urge the Board to stop wasting valuable company resources and drop its resistance to placing the Third Point nominees on the Board. We are prepared to join immediately. Once on the Board, our first tasks will be to work with the remaining Board members to find Yahoo! a new leader with the qualifications and integrity to lead the Company and install best practices of corporate governance. The Company can ill afford to continue this misguided fight with its largest outside shareholder while it has so many other fires to put out. There has been enough damage already. Sincerely, Daniel S. Loeb Chief Executive Officer Third Point LLC So, take the weekend to mull it over and while you're at it, consider gathering documentation of other potentially false claims such as: 1. His first-place finish in his 3rd grade spelling bee (do you really think a future Stonehill grad would know how to spell 'abhinaya'?) 2. That he bought Apple stock at $76/share (RIGHT) 3. That he can bench 285 (sure) 4. That he graduated high school (just don't know) 5. His circumcision (do you want to get to the bottom of this guy or not? If he lied about comp sci, who knows what else he'd lie about) Third Point Demands Yahoo C.E.O. Be Fired by Monday [Dealbook] Loeb Asks Yahoo To Fire CEO By Monday [MarketWatch]