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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