Friday, January 25, 2013

Here's The 'Schmuck Insurance' Contract That Started A Decade-Long Feud Between Carl Icahn And Bill Ackman





According to BI it's all out being put out there now. The feud between hedge fund managers Bill Ackman and Carl Icahn reached a fevered pitch yesterday, when Carl Icahn told Bloomberg TV's Trish Regan that Ackman was "disingenuous" in his short against multi-level marketing firm, Herbalife.

Last night, Ackman responded simply by detailing the root of he and Icahn's animosity, a 2003 deal over Hallwood Realty.  At the time, Ackman's hedge fund, Gotham Partners, was going bust. He needed to do a deal so he called up Carl Icahn and offered to sell him shares of Hallwood for $80 a share. It was trading at $60, but Ackman thought it was worth $140.

The deal was, if Icahn sold the shares within 3 years and made a profit of 10% or more, he and Ackman would split the proceeds. To ensure that the deal went off without a hitch, Ackman and Icahn signed a 10 page agreement they called "schmuck insurance."


Read more: http://www.businessinsider.com/ackman-icahn-hallwood-contract-2013-1#ixzz2J0FtFlnY

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