Monday, March 25, 2013

Falcone Follows Michael Jackson Path Taking Fortress Loan

Hedge-fund manager Philip Falcone, beset by declining assets, federal securities regulators and the bankruptcy of his largest investment, is borrowing money against personal real estate he bought during better days, Bloomberg reports.

Falcone and his wife, Lisa, pledged their $39 million Caribbean villa to Fortress Credit Corp., the lender that provided Michael Jackson with a mortgage on his Neverland Ranch when the late pop idol was close to insolvency, according to a February regulatory filing. Within the past year, the couple also agreed to post both of their Manhattan townhouses as collateral for about $25 million of personal loans, real estate records show.

Assets under management at Falcone’s Harbinger Capital Partners LLC have plunged 89 percent since Falcone bought several of the properties in 2008, reducing the fees generated by the New York-based firm’s hedge funds. While it’s not unusual for wealthy individuals to use real estate as collateral, Fortress Credit specializes in higher-rate loans to borrowers who have difficulties getting bank financing, and it isn’t shy about seizing assets in a default, according to Steven Altman, an attorney who participated in litigation involving Michael Jackson’s debt….

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