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Lehman Ap 27
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Google’s Eric Schmidt Plays the Adult in D.E. Shaw Investment
Apr 24, 2015 | The New York Times - Dealbook
By Richard Beales
Eric E. Schmidt, the executive chairman of Googloe, is reprising the adult supervisory role he played with Google’s founders. Not for him the frivolity of, say, a sports team investment like the $2 billion that Steven A. Ballmer paid for basketball’s Los Angeles Clippers. Mr. Schmidt’s family vehicle, Hillspire, is instead buying 20 percent of the $36... -
Schmidt's Hillspire Acquires Lehman's D.E. Shaw Stake
Apr 24, 2015 | FIN Alternatives
Eric Schmidt’s family office Hillspire LLC has taken a 20% equity stake in D.E. Shaw. The position, which is characterized as a passive economic interest in the D. E. Shaw group of companies, was previously owned by Lehman Brothers Holdings. D.E. Shaw will continue to function independently, with no changes in management or... -
Sale of Lehman’s Stake in D.E. Shaw Proves That Valley People Will Buy Anything
Apr 24, 2015 | Dealbreaker
By Thornton McEnery
D.E. Shaw is a hedge fund with $36 billion under management and a strategy famed for its bold mixing of quant trading with the hiring of poetry majors from liberal arts colleges… or something. But despite all of its modern bona fides, up until yesterday, 20% of D.E. Shaw was held in the icy death grip of what used to be Lehman Brothers. -
Shaw Thing
Apr 26, 2015 | Business Standard
By Richard Beales
Eric Schmidt is reprising the adult supervisory role he played with Google's young founders. Not for him the frivolity of, say, a sports team investment like the $2-billion Steve Ballmer paid for basketball's Los Angeles Clippers. The Google executive chairman's family vehicle, Hillspire, is instead buying 20 per cent of $36-billion hedge fund firm DE Shaw ... -
Lehman’s $83 Million Trader Taped Conversations
Apr 24, 2015 | The Wall Street Journal
By Patrick Fitzgerald
A former Lehman Brothers star trader secretly recorded several conversations that he says prove Lehman owes him more than $83 million in bonuses for his work done mostly in 2008, even though he received a similar amount when Barclays BARC.LN -0.31% PLC bought Lehman, The Wall Street Journal reports. -
Former Trader Suing Lehman For $83 Mil Bonus Secretly Recorded Conversations
Apr 24, 2015 | ValueWalk
By Clayton Browne
A highly successful ex-Lehman Brothers trader apparently secretly recorded a number of conversations he says prove Lehman owes him more than $83 million in bonuses for work done in 2008, although he received a similar amount when Barclays PLC (NYSE:BCS) (LON:BARC) acquired Lehman a few months later. -
Morning Coffee: Enormous Profits of Arrogant 42 Year-Old Trader. Hiring Mistake at Credit Suisse
Apr 27, 2015 | eFinancial Careers
By Sarah Butcher
If anyone gives ‘bankers’ a bad name, it is surely Jonathan Hoffman, a 42 year-old ex-Barclays rates trader and the former head of global rates at Lehman Brothers. Despite being paid $83m (£55m) to join Barclays when it purchased Lehman’s core business in September 2008, Hoffman is adamant that he is still owed $83m from Lehman Brother’s ... -
Litigation Department of the Year, Securities: Bernstein Litowitz Berger & Grossmann
Apr 24, 2015 | The Recorder
By Ginny LaRoe
...Led by San Diego partner David Stickney, Bernstein Litowitz secured a $99 million settlement with Ernst & Young, Lehman Brothers' audit firm, bringing the firm's total recovery in the Lehman litigation to $615 million. In addition the team obtained $280 million from JPMorgan Chase & Co., and $95 million from Morgan Stanley in a case claiming...
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
D.E. Shaw
Jonathan Hoffman
Comment - Ernst & Young
Full Text of Stories Below
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Google’s Eric Schmidt Plays the Adult in D.E. Shaw Investment
Apr 24, 2015 | The New York Times - Dealbook
By Richard Beales
Eric E. Schmidt, the executive chairman of Googloe, is reprising the adult supervisory role he played with Google’s founders.
Not for him the frivolity of, say, a sports team investment like the $2 billion that Steven A. Ballmer paid for basketball’s Los Angeles Clippers. Mr. Schmidt’s family vehicle, Hillspire, is instead buying 20 percent of the $36 billion hedge fund firm D.E. Shaw from the estate of bankrupt Lehman Brothers.
Passive investments in private hedge fund management firms are awkward assets. Controlling founders, in this case David Shaw, can typically veto any transfer. They also value their privacy. The Affiliated Managers Group made Lehman an offer north of $500 million for the same stake in 2014, according to news reports, but that deal didn’t happen. One reason may be that public companies like Affiliated Managerscan’t guarantee keeping information on their holdings to themselves.
That leaves few natural buyers. Lehman bought pieces of a number of hedge funds before the financial crisis, and some other institutions have also purchased slices. Neuberger Berman’s Dyal Capital Partners unit specializes in such investments, recently snapping up a 20 percent stake in activist investment firm Jana Partners. Family offices regularly seed new hedge fund firms. But Mr. Schmidt’s purchase of a big existing stake is unusual.Lehman paid at least $750 million D.E. Shaw, according to media reports. But 2007 was the end of a financial bubble, and D.E. Shaw’s business mix was different then. The roughly 5 percent ratio of market value to assets under management for two publicly traded hedge fund firms, Och-Ziff Capital Management and Fortress Investment, would imply a value below $400 million for 20 percent of D.E. Shaw...
For full story:
http://www.nytimes.com/2015/04/25/business/dealbook/googles-eric-schmidt-plays-the-adult-in-de-shaw-investment.html?_r=0
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Schmidt's Hillspire Acquires Lehman's D.E. Shaw Stake
Apr 24, 2015 | FIN Alternatives
Eric Schmidt’s family office Hillspire LLC has taken a 20% equity stake in D.E. Shaw.
The position, which is characterized as a passive economic interest in the D. E. Shaw group of companies, was previously owned by Lehman Brothers Holdings.
D.E. Shaw will continue to function independently, with no changes in management or operations, according to a press release.
Lehman purchased the stake in 2007 for between $750 million and $800 million. Terms of the Hillspire acquisition were not immediately disclosed, although media reports note that Boston-based Affiliated Managers Group explored the purchase of the same position for $500 million last year.
“I’ve always regarded Eric as a kindred spirit—someone who shares our belief in the power of groundbreaking innovation, analytical rigor, and extraordinarily gifted employees,” said David Shaw, founder of the D. E. Shaw group, said in the press release.
“I’ve known and respected David for many years, and as a longstanding investor in the D. E. Shaw group’s funds, I have the highest regard for their team and the firm that they’ve built,” said Eric Schmidt in the same release. “I’m excited to invest in an enterprise that has so successfully used technology to deliver superior risk-adjusted returns across asset classes globally.”
Liquidators of Lehman’s estate following the company’s bankruptcy have reportedly been looking to sell the stake for quite a while, but were hampered by restrictions on the stake negotiated when Lehman bought it...
For full story:
http://www.finalternatives.com/node/30638
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Sale of Lehman’s Stake in D.E. Shaw Proves That Valley People Will Buy Anything
Apr 24, 2015 | Dealbreaker
By Thornton McEnery
D.E. Shaw is a hedge fund with $36 billion under management and a strategy famed for its bold mixing of quant trading with the hiring of poetry majors from liberal arts colleges… or something. But despite all of its modern bona fides, up until yesterday, 20% of D.E. Shaw was held in the icy death grip of what used to be Lehman Brothers.
For more than a year, Goldman Sachs bankers working for the Lehman estate had struggled to drum up interest in the stake, which the bank bought a year before it collapsed. At the time, the biggest hurdle for prospective buyers was not the price — which was said to be between $550 million and $800 million — but the terms of the stake itself, according to people who were briefed on the matter last year.
Blackstone Group, Dyal Capital and Affiliated Managers Group were among the investment firms that considered buying the stake.
But ultimately the others firms declined, some because of the terms of the agreement that were negotiated in early 2007. Lehman paid about $800 million and a contingency based on future performance for the stake. As part of the deal, Lehman paid a large upfront sum and then additional payments in 2009 and 2012.Who didn’t want to buy part of D.E. Shaw?
They hired Larry Summers once for f-ck’s sake, and he’s famous.
Maybe the ship of Wall Street insiders had sailed. Maybe it was time to look outside the box and find a buyer with cash to burn and no fear of Lehman’s ghost. But where do you find that kind of mythical creature?...
For full story:
http://dealbreaker.com/2015/04/sale-of-lehmans-stake-in-d-e-shaw-proves-that-valley-people-will-buy-anything/
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Apr 26, 2015 | Business Standard
By Richard Beales
Eric Schmidt is reprising the adult supervisory role he played with Google's young founders. Not for him the frivolity of, say, a sports team investment like the $2-billion Steve Ballmer paid for basketball's Los Angeles Clippers. The Google executive chairman's family vehicle, Hillspire, is instead buying 20 per cent of $36-billion hedge fund firm DE Shaw from the estate of bankrupt Lehman Brothers.
Passive investments in private hedge fund management firms are awkward assets. Controlling founders, in this case David Shaw, can typically veto any transfer. They also value their privacy. Affiliated Managers made Lehman an offer north of $500 million for the same stake in 2014, according to news reports, but that deal didn't happen. One reason may be that public companies like AMG can't guarantee keeping information on their holdings to themselves.
That leaves few natural buyers. Lehman bought pieces of a number of hedge funds before the financial crisis, and some other institutions have also purchased slices. Neuberger Berman's Dyal Capital Partners unit specialises in such investments, recently snapping up a 20 per cent stake in activist firm Jana Partners. Family offices regularly seed new hedge fund firms. But Schmidt's purchase of a big existing stake is unusual.
Lehman originally paid at least $750 million, according to media reports. But 2007 was the tail-end of a financial bubble, and DE Shaw's business mix was different then. The roughly 5 per cent ratio of market value to assets under management for two publicly traded hedge fund firms, Och-Ziff Capital Management and Fortress Investment, would imply a value below $400 million for 20 per cent of DE Shaw. That's a very rough comparison, though, and it may be that Schmidt paid something near AMG's reported offer last year...For full story:
http://www.business-standard.com/article/opinion/shaw-thing-115042700009_1.html
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Lehman’s $83 Million Trader Taped Conversations
Apr 24, 2015 | The Wall Street Journal
By Patrick Fitzgerald
A former Lehman Brothers star trader secretly recorded several conversations that he says prove Lehman owes him more than $83 million in bonuses for his work done mostly in 2008, even though he received a similar amount when Barclays BARC.LN -0.31% PLC bought Lehman, The Wall Street Journal reports.
New Jersey has tapped former bankruptcy judge Donald Steckroth to mediate talks between struggling Atlantic City and groups expected to play a major part in its looming restructuring, including casino operators and police and firefighters’ unions, according to the Journal
A federal judge denied Lehman Brothers Inc.’s bid to carve out $1.3 billion from an earlier court decision that awarded $4 billion in disputed assets to Barclays PLC stemming from the U.K. bank’s purchase of Lehman’s brokerage business, WSJ reports.
General Motors Co.GM -0.92% continued its winning streak in North America amid sizzling U.S. demand for trucks and sport-utility vehicles, but momentum at home was dented elsewhere by the strong dollar and dismal conditions in South America, writes WSJ...
For full story:
http://blogs.wsj.com/bankruptcy/2015/04/24/lehmans-83-million-trader-taped-conversations/
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Former Trader Suing Lehman For $83 Mil Bonus Secretly Recorded Conversations
Apr 24, 2015 | ValueWalk
By Clayton Browne
A highly successful ex-Lehman Brothers trader apparently secretly recorded a number of conversations he says prove Lehman owes him more than $83 million in bonuses for work done in 2008, although he received a similar amount when Barclays PLC (NYSE:BCS) (LON:BARC) acquired Lehman a few months later.
Testimony from ex Lehman trader
On the second day of a trial over whether Lehman owes its ex-employees bonus money, ex- Lehman global rates trader Jonathan Hoffman testified he frequently taped conversations with colleagues without telling parties he was recording them. Hoffman claims it was his method of taking notes.
Back in 2008, in a negotiation with Rich Ricci, the chief of Barclays’s IB at the time, Hoffman told Ricci, “I guess I’m surprised that my contract isn’t just being made whole.”
Legal analysts say the main question in the trial main is whether Barclays paid Hoffman the $83 million bonus as part of his Lehman contract or as part of a new arrangement. Attorneys for the trustee winding down Lehman argued that Lehman doesn’t owe Hoffman anything since the trader’s contract with acquirer Barclays was basically the same as his Lehman contract and Barclays already paid him the bonuses. Details on the case
Of note, Hoffman’s trading resulted in almost $550 million in profits for Lehman in 2008, and his trading represented a solid 10% of the bank’s profits in 2007. Obviously, this meant Barclays wasn’t his only employment option...
For full story:
http://www.valuewalk.com/2015/04/lehman-jonathan-hoffman/
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Morning Coffee: Enormous Profits of Arrogant 42 Year-Old Trader. Hiring Mistake at Credit Suisse
Apr 27, 2015 | eFinancial Careers
By Sarah Butcher
If anyone gives ‘bankers’ a bad name, it is surely Jonathan Hoffman, a 42 year-old ex-Barclays rates trader and the former head of global rates at Lehman Brothers. Despite being paid $83m (£55m) to join Barclays when it purchased Lehman’s core business in September 2008, Hoffman is adamant that he is still owed $83m from Lehman Brother’s Holdings for work done earlier that year and he’s taking Lehman’s carcass to court in an attempt to extract his dues.
Hoffman’s argument is that the $83m allocated to him by Barclays was to persuade him to join the British bank and not to compensate him for the money he left behind at Lehman. Like Sonia Pereiro-Mendez, the ex-Goldman trader who used covert films to extract an out of court settlement from the US bank last week, Hoffman made a secret recording of the negotiations he had with Barclays. In this recording, Hoffman is reportedly heard talking to Rich Ricci, Barclays’ then COO, and expressing surprise that his Lehman contract wasn’t being “made whole.”
Recording or not, few people are likely to have much sympathy for Hoffman, who is already a very wealthy man. He was allocated $65.5m in pay by Lehman between 2005 and 2007 alone. Hoffman, however, considers his outlandish pay valid in light of the enormous profit he made for his employers. In 2008, he generated $550m of Lehman’s profits. And between 2009 and 2014, he claims to have made $1.25bn in profits for Barclays. In the circumstances, Hoffman says he was such hot property he could have joined a hedge fund like Citadel or Millennium and that Barclays’ $83m was simply to get him on board. Cue tiny violins...
For full story:http://news.efinancialcareers.com/uk-en/206371/morning-coffee-enormous-profits-of-arrogant-42-year-old-trader-hiring-mistake-at-credit-suisse/
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Litigation Department of the Year, Securities: Bernstein Litowitz Berger & Grossmann
Apr 24, 2015 | The Recorder
By Ginny LaRoe
These were not cookie-cutter securities suits with well-worn paths. And where there could have been parallel federal enforcement actions to help guide the way, the U.S. Department of Justice and Securities and Exchange Commission were absent.
...Led by San Diego partner David Stickney, Bernstein Litowitz secured a $99 million settlement with Ernst & Young, Lehman Brothers' audit firm, bringing the firm's total recovery in the Lehman litigation to $615 million. In addition the team obtained $280 million from JPMorgan Chase & Co., and $95 million from Morgan Stanley in a case claiming documents for residential mortgage-backed securities misrepresented the underlying mortgage loans and overvalued the collateral.
...Berger, who is based in New York, was heavily involved securing the $99 million settlement with Ernst & Young in the Lehman Brothers matter. It is considered one of the largest auditor settlements in a securities fraud class action ever.
The feds passed on bringing a case against the audit firm, which stood accused by investors of failing to properly investigate Lehman's statements before its fall. The plaintiffs found themselves in fairly uncharted territory, trying to recoup their lost investments from a banking institution that had gone bankrupt.
Stickney said they amassed some 26 million documents and conducted 50 depositions of fact witnesses to develop a record...
For full story:
http://www.therecorder.com/id=1202724169904/Litigation-Department-of-the-Year-Securities-Bernstein-Litowitz-Berger-amp-Grossmann?slreturn=20150327033143
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
D.E. Shaw
Jonathan Hoffman
Comment - Ernst & Young
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