DealBreaker – Several months back, it came to light that Phil Falcone had loaned himself some $113 million from one of Harbinger’s funds to pay personal taxes. He didn’t tell anyone about it at the time because he hadn’t thought it was that big a deal but when investors finally heard about it in November, it turned out they were mighty pissed.
Goldman and Blackstone pulled their entire investments from the flagship fund and even though they should’ve take the loan as a postive sign (Falcone pays his taxes! Not everyone does that!), a bunch of clients feared it was a harbinger of not very good moments to come (some where also miffed about the fact that the loan was taken from a fund in which redemptions had been suspended).
