Pali Capital’s hedge fund manager, Brad Reifler, is completely in the hole.
Update: Brad sets the record straight.
Pali’s board fired Reifler (or he “resigned”) in October 2008.
He used to helicopter to work from his “expansive 12 horse farm” in upstate New York. The 150-acre estate has ice hockey rink, tennis courts, indoor and outdoor swimming pools, and a shooting range.
His office was equally flashy. Pali was decorated with multiple Rodin sculptures, a model aeroplane, tons of artwork, and plush furniture. Instead of just coffee, they served one interviewee freshly-brewed espresso in gold-rimmed china cups.
Apparently much of Pali’s downfall can be blamed on Reifler’s own litigiousness.
Pali Capital’s legal fees skyrocketed from $4.5 million to $13.8 million from 2008 to 2009, mostly because of Reifler’s fees. The fund only had $1.1 million on its balance sheet at the time.
In a 10 year period, Reifler filed twelve lawsuits.
Around 2008, Pali’s shareholders became concerned that Reifler had “secretly run Pali as his own private fiefdom.”
“He appointed himself head of everything, including compliance, and everyone reported to him,” a former employee told Reuters.
“If you crossed him, you didn’t get a bonus.”
Now Pali Capital is collapsed. And Reifler is personally in the hole for at least the $6.5 million he personally guaranteed to Bear Stearns investors if they invested in Pali Capital.
(Cue Chris Farley’s Tommy Boy monologue…”Because they know all they sold ya was a guaranteed piece of shit!”)