John Paulson secures major victory in bitter fight – Business News
Billionaire investor John Paulson gained a major victory in his bitter fight with a former business companion after an arbitrator ordered about $48 million paid back to him and concluded he was justified in firing one of his prime executives.
The choice, revealed Monday, is the newest twist in Paulson’s long-running feud with Fahad Ghaffar, a former prime aide who helped run Paulson’s Puerto Rico empire earlier than the boys fell out with one another.
An arbitrator discovered that Ghaffar engaged in “intentional misconduct and fraud” and was correctly terminated by Paulson in July 2023, in line with a submitting submitted Monday in federal court docket in Puerto Rico.
Hedge fund billionaire John Paulson gained a major arbitration victory towards former business affiliate Fahad Ghaffar, in line with newly filed court docket papers. Getty Images
Ghaffar was ordered to pay back $35.66 million in income tied to an investment referred to as Dynamic Payments and repay one other $112,936 related to American Express rewards factors that the arbitrator discovered had been improperly retained.
Carolyn Demarest, the retired New York choose who was serving because the arbitrator, additionally discovered that Ghaffar dedicated fraud in reference to Paulson’s $11.48 million investment in software program company Innoveo, in line with a court docket submitting.
All instructed, Ghaffar owes Paulson about $48 million, beneath the arbitrator’s choice.
“Following a three-week hearing, the Arbitrator ruled that Mr. Paulson proved, by clear and convincing evidence, that Ghaffar was terminated for Cause, finding that Ghaffar committed fraud, securities fraud, and violated both his fiduciary and contractual obligations to Mr. Paulson,” Paulson’s lawyer mentioned in a assertion to The Post.
Paulson, who made billions betting towards the housing market earlier than the 2008 financial disaster, first employed Ghaffar in 2013 to help oversee a growing portfolio of resorts, resorts and real estate investments on the island.
The relationship ultimately deteriorated into an ugly courtroom battle.
In 2023, Ghaffar sued Paulson, claiming the billionaire reneged on a deal that may have given him a 50% stake in F40, a luxurious car dealership enterprise in Puerto Rico.
An arbitrator backed Paulson’s choice to fire former aide Fahad Ghaffar. fahadghaffarpr.com
Ghaffar alleged he invested roughly $17 million into the business with the understanding it could convert into a 50% equity stake.
Months later, Paulson fired back with a racketeering lawsuit accusing Ghaffar of siphoning thousands and thousands of {dollars} from company accounts to fund a lavish way of life.
The newest arbitration ruling stems from a separate dispute over compensation and profit-sharing preparations between the boys.
After a three-week listening to that concluded final November, Demarest discovered that Ghaffar misled Paulson about his financial curiosity in Innoveo whereas arranging contracts between Paulson-controlled corporations and the software program firm that boosted Innoveo’s worth.
The arbitrator concluded that Ghaffar’s conduct amounted to deception, fraud and securities fraud and offered grounds for termination beneath the events’ settlement.
Paulson’s F40 luxurious car dealership enterprise in Puerto Rico grew to become a flashpoint in the billionaire’s legal battle with former business companion Fahad Ghaffar. Paulson Puerto Rico/LinkedIn
“Respondents have proved, by clear and convincing evidence, that Claimant committed acts of intentional misconduct or fraud,” Demarest wrote.
The ruling additionally discovered that Ghaffar improperly took for himself an alternative to invest in Dynamic Payments after advising Paulson to go on the deal.
While Demarest mentioned that conduct didn’t itself justify firing Ghaffar years later, she ruled that he breached his fiduciary duties and should give up the income he earned from the investment.
The arbitrator was much less receptive to many of Paulson’s different allegations.
John Paulson employed Fahad Ghaffar in 2013 to help oversee his growing portfolio of Puerto Rico resorts, resorts and real estate investments. Getty Images
Demarest discovered that quite a few claims involving furnishings purchases, art work, reductions, journey bills and different alleged perks didn’t set up fraud or intentional misconduct beneath the demanding customary required to justify termination.
The case isn’t over.
In a follow-up order issued June 8, Demarest mentioned extra damages points stay unresolved and will probably be addressed in a second part of the arbitration.
The Post has sought remark from Ghaffar’s lawyer, Martin Russo.
