Bill Ackman’s $4 Billion Valeant Loss May Be Just The First Two-Thirds Of It

How much would you pay to avoid 12 hours of depositions?
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Losing the first $4 billion may be the hardest. Losing the next $2 billion on a stock you don’t even own anymore, due to an insider-tradinglawsuit that you've called “baseless,” “shameless” and a waste of money, after spending half a day in the dock under hostile questioning by lawyers from the company that bested him and started this whole damned downward Valeant spiral in the first place? That’s liable to the most painful.

CryingAckman

This is not just any lawsuit. Damages in the case may be $2 billion, as noted by the judge who certified the litigation as a class action Wednesday….

The case is entering a crucial stage. Court documents indicate that Mr. Ackman and Mr. Pearson have either been deposed by lawyers for the plaintiffs or will be questioned under oath soon. The documents also show that Mr. Ackman must set aside 12 hours to answer questions.

While Ackman’s own lawyers get down to preparing their shell-shocked and scarred client to be deposed in the case, Wall Street is taking part in its favorite game: Kicking Bill Ackman while he’s down.

Some investment managers — Mr. Ackman’s peers and rivals — say that his Valeant wager raises questions about his investment style. His failure to limit his losses on the trade and his unusual public comments as a Valeant director, in which he cheered the company’s management and strategies even as its business was collapsing, are viewed as troubling.

D. Ellen Shuman is the veteran manager of Edgehill Endowment Partners, which oversees $650 million in nonprofit money. She evaluates money managers for her clients and said she had avoided investing in Pershing Square.

Why? “It is all about Bill Ackman,” she said in a recent telephone interview. “It is not about his investors or the companies in which he is investing.”

Hedge Fund Titan’s Surefire Bet Turns Into a $4 Billion Loss [NYT]

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