By Niki Natarajan
This is a cautionary
tale of dotting the 'I's and crossing the 'T's. It would seem
that the founders of Pacific Alternative Asset Management
Company are paying dearly for a lack of legal expertise in the
The bill so far is $74 million in interest and profits - and
soon 40% of their holding company. And that is before any
potential reputational damage is added to the mix following
Judge Richard Sullivan's observation that their seed capital
deal was structured to mislead investors.
In the coming days, the founders of PAAMCO need to decide
whether or not to fight the judge's ruling that Franklin
Holdings becomes a 40% equity holder. Although, even without
this stake, with an ROI of 5,200% surely Paloma Partners'
Donald Sussman's seed...