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Invictus Global Loses Control of Flagship Fund
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Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Monday, November 20. In today's briefing, Invictus Global Management, a new distressed-debt manager, lost control of its flagship fund after top investors ousted it for business tactics they considered too aggressive, sources told The Wall Street Journal. Hawaii officials have touted the more-than-$150 million fund to help families of the victims that died from the August fire. But some victims, payments are too little too soon.
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Invictus Global Management is based in Austin, Texas.
SERGIO FLORES/BLOOMBERG NEWS
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Invictus loses control of flagship fund. A new distressed-debt manager lost control of its flagship fund after top investors ousted it for business tactics they considered too aggressive, including conduct during a chapter 11 bankruptcy that resulted in court sanctions against the fund, according to people familiar with the matter.
Austin, Texas-based Invictus Global Management has run a flagship $100 million distressed-debt fund that invests in struggling or bankrupt companies. It has been active in several major chapter 11 and litigation finance cases in the last four years, including the bankruptcies of Aeromexico, Latam Airlines and discount retailer Tuesday Morning.
The fund’s two largest investors, Corbin Capital Partners and Gatewood Capital Partners, voted to remove Invictus as fund manager in September as Invictus faced litigation tied to its actions on Wall Street, according to people familiar with Corbin’s and Gatewood’s thinking.
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A public memorial honors the people who died in the Lahaina, Hawaii, wildfire this summer. PHOTO: MARIO TAMA/GETTY IMAGES
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For some Maui fire victims, payments are too little, too soon. Hawaii officials have touted the more-than-$150 million fund as a voluntary option for victims’ families to begin the healing process while avoiding costly and drawn-out lawsuits that often follow disasters. The governor said he had received financial commitments from the four parties so far which have been named as defendants in dozens of lawsuits over the fire and are facing the greatest liability. Payments, which could amount to over $1 million per family, would go out as early as the middle of next year.
Hawaii hasn’t indicated when families must choose whether to opt into the fund, which also covers the small number of people who suffered serious injuries. Victims’ families who choose to participate could still file lawsuits over damaged property.
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“There are so many levels of failure.”
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— Kimberly Buen, family of the fire victim
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Signature Bank’s loans selling at a steep discount. A venture of two nonprofits and Related Fund Management is poised to win an auction for billions of dollars of Signature Bank loans backed by New York apartments, according to people familiar with the matter.
The venture’s leading bid of less than 70 cents of the loan’s face value shows how much the value of New York’s rent-regulated apartment sector has deteriorated in recent years.
A formal winner could be awarded as early as Monday, according to a person familiar with the auction of real-estate assets once owned by the failed bank.
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Office landlords can’t get a loan anymore. The office sector’s credit crunch is intensifying. By one measure, it’s now worse than during the 2008-09 global financial crisis.
Only one out of every three securitized office mortgages that expired during the first nine months of 2023 was paid off by the end of September, according to Moody’s Analytics.
That is the smallest share for the first nine months of any year since at least 2008 and well below the nadir reached in 2009, when 47% of these loans got paid off. That share is also well below the rate before the pandemic, when more than eight out of every 10 maturing securitized office mortgages were paid back in some years.
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Bayer has spent years in legal battles over Roundup following its acquisition of Monsanto, which developed the herbicide. PHOTO: ANDREW KELLY/REUTERS
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Bayer told to pay $1.56 billion after losing Roundup case. Bayer faces a payout of $1.56 billion after a Missouri jury found in favor of the plaintiffs who blamed its Roundup weedkiller for causing their cancers.
The decision is the fourth in a row to go against Bayer during a roller-coaster five-year legal battle over Roundup, the world’s most popular weedkiller, which included nine straight victories for the company, as well as earlier losses. The cases represent tens of thousands of claims from farmers and gardeners.
The mounting charges from cases tied to the herbicide come against the backdrop of Bayer’s restructuring efforts. The overhaul could lead to the separation of its health business and its agriculture unit, which includes the U.S.-based Monsanto operation that developed Roundup. Analysts said how any Roundup-related liabilities are divided would affect the potential valuation of the two businesses.
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Jim Chanos is shutting down hedge funds he managed for decades that wager against companies he believes are overpriced or fraudulent. VICTOR J. BLUE/BLOOMBERG NEWS
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Jim Chanos to close hedge funds. Wall Street’s best-known bear is going into hibernation.
After nearly four decades, Jim Chanos is shutting down hedge funds he manages that wager against companies he believes are overpriced or fraudulent. His
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career as a short seller spanned a contrarian bet against Enron that paid off when the energy trader collapsed as well as yearslong, money-losing campaigns against Tesla and AOL.
More recently, Chanos has struggled to turn his pessimistic positions into profits while markets generally moved higher. His firm, Chanos & Co., manages less than $200 million today, down from $6 billion in 2008, and its funds are down 4% so far this year, while the S&P 500 is up 19%, including dividends. Shares of Tesla are up about 90% this year, and the electric-vehicle maker is one of the world’s most valuable companies.
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“The marketplace for what I do has changed."
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— Jim Chanos
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David Boies to step down. Famed litigator David Boies will step down next year as chair of the law firm he co-founded 26 years ago, as the firm seeks to move past some turbulent years and questions about its future.
The 82-year-old leader of Boies Schiller Flexner represented Vice President Al Gore during the 2000 presidential election, won a landmark government antitrust case against Microsoft and helped secure same-sex marriage rights in California. His current portfolio includes a pair of lawsuits against Google and a new lawsuit challenging U.S. narcotics restrictions on behalf of a group of marijuana companies.
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