In his day, Phil Falcone was a pretty good hedge fund manager. But he’s not so good at paying taxes, so he had to stop doing that, and unfortunately, just about everything he’s tried since has fallen squarely on the “paying taxes” side of his competency: building the wireless network of the future, making women’s undergarments, (allegedly) meeting loan obligations, (allegedly) paying lawyers and, of course, paying taxes. To this list, one can now add figuring out the long-term insurance care industry, although this is very much someone else’s problem now.
Over time, Mr. Corcoran became concerned by what he described in a 2019 memo to the insurer’s independent board members as Mr. Falcone’s “continuing interjections into [Continental’s] day-to-day transactions, affairs and operations that include what look like threats and intimidation” in regards to investments. He wrote that those actions possibly violated the conditions put on Mr. Falcone in the insurance-department deal approvals.
You know, the ones he had to accept on account of the whole being banned from the securities industry thing.
Additional detail is contained in a lawsuit filed in a Texas state court last May by Continental against Mr. Corcoran accusing him of breach of contract and other employment-related wrongdoing.
Mr. Corcoran said Mr. Falcone pushed Continental to invest in HC2 affiliates as well as make at least two other specific investments. One of those took the form of more than $10 million in loans to an upstart gem and jewelry business named Arcot Finance LLC. Continental’s regulatory filings for 2019 indicated the investment had lost money…. Mr. Corcoran, along with an independent Continental director, raised concerns about Mr. Falcone to the Texas Department of Insurance in 2019. In early 2020, the department was examining the insurer’s related-party activities, affiliated agreements, investments and corporate governance, according to Continental’s regulatory filings.