Baupost Makes A Ton Of Money From Madoff!

[indythinker85]

http://www.forbes.com/sites/nathanvardi/2013/01/16/the-great-baupost-madoff-claims-trade-that-made-a-big-madoff-feeder-fund-a-loser-again/

[siddharth18]

I was about to post it - but you beat me to it!

 

Funny about the judge labeling the disgruntled seller's case as a "simple case of seller’s remorse."

[ubuy2wron]

I have nothing but a ton of regard and admiration for Seth but this is not the nicest way to make a bunch of money. It would have been nicer if he out smarted a Saudi Prince or a Columbian drug lord or any number of other ways. I am sure his investors are deserving and all its just that the Madoff victims are not a group I want to make a bunch of dough off of. It may be legal and it may be smart but it aint always nice.

[Kraven]

I have nothing but a ton of regard and admiration for Seth but this is not the nicest way to make a bunch of money. It would have been nicer if he out smarted a Saudi Prince or a Columbian drug lord or any number of other ways. I am sure his investors are deserving and all its just that the Madoff victims are not a group I want to make a bunch of dough off of. It may be legal and it may be smart but it aint always nice.

 

I had a completely different take on this.  I don't see anything wrong with it at all.  Think about it at the time the deal occurred.  The guy was probably half suicidal thinking all his money was going kaput.  Someone comes in and says I'll buy it from you which obviously means they think it is worth more.  The guy probably told anyone who would listen how lucky he is to get anything out of it and if they were smart they'd do the same.  Then it turns out if he had been more patient he would have been able to get more out of it.  Seller's remorse indeed. 

 

I just don't see it as a "taking advantage of" situation.  This is a guy who still got around $75 mil out.  More money than 99.999% of people will ever see.  This isn't a case of unconscionability to me where someone has no choices in life.  This guy could have afforded the best advisors and lawyers.  I am not saying it's a happy situation, obviously it isn't, it's awful.  But he could have made other decisions and was in a position to have been able to do so.

[cwericb]

While it’s unfortunate for Madoff victims it obviously looked like a good deal to both sides at the time or it would not have transpired.

 

Hindsight is 20/20. No one set out to take advantage of anyone. It seems like someone did their homework and someone did not.  If I sell a stock tomorrow and it triples next month that is just my bad luck or mismanagement, I certainly don’t think the people on the other side of the trade should refund my money or pay me more. This might be a bit of oversimplification but doesn’t the same principle apply?

[Parsad]

I have nothing but a ton of regard and admiration for Seth but this is not the nicest way to make a bunch of money. It would have been nicer if he out smarted a Saudi Prince or a Columbian drug lord or any number of other ways. I am sure his investors are deserving and all its just that the Madoff victims are not a group I want to make a bunch of dough off of. It may be legal and it may be smart but it aint always nice.

 

I felt the same way.  Nothing wrong with it...just didn't feel right.  Cheers!

[twacowfca]

I have nothing but a ton of regard and admiration for Seth but this is not the nicest way to make a bunch of money. It would have been nicer if he out smarted a Saudi Prince or a Columbian drug lord or any number of other ways. I am sure his investors are deserving and all its just that the Madoff victims are not a group I want to make a bunch of dough off of. It may be legal and it may be smart but it aint always nice.

 

I felt the same way.  Nothing wrong with it...just didn't feel right.  Cheers!

 

The man who sold the claim (evidently he had offered the claim to distressed debt or claims investors at the highest bid) wasn't a victim, but an offshore owner of a Madoff feeder fund.  The managers of those feeder funds, unlike the victims, we're generally sophisticated operators who didn't ask too many questions about how Madoff made his remarkable stated returns. 

 

Once the fraud became known, a prudent, sophisticated manager should have waited for price discovery to see how much his claim was worth, given that the world's best attorney for recovering money was aggressively persuing restitution to victims who lost money.  That he did not wait for price discovery to run it's course, suggests that other time sensitive motives a may have influenced his decision to sell the claim of his feeder fund for what was almost certainly going to be a discount to the value of the ultimate recovery.

[Parsad]

I have nothing but a ton of regard and admiration for Seth but this is not the nicest way to make a bunch of money. It would have been nicer if he out smarted a Saudi Prince or a Columbian drug lord or any number of other ways. I am sure his investors are deserving and all its just that the Madoff victims are not a group I want to make a bunch of dough off of. It may be legal and it may be smart but it aint always nice.

 

I felt the same way.  Nothing wrong with it...just didn't feel right.  Cheers!

 

The man who sold the claim (evidently he had offered the claim to distressed debt or claims investors at the highest bid) wasn't a victim, but an offshore owner of a Madoff feeder fund.  The managers of those feeder funds, unlike the victims, we're generally sophisticated operators who didn't ask too many questions about how Madoff made his remarkable stated returns. 

 

Once the fraud became known, a prudent, sophisticated manager should have waited for price discovery to see how much his claim was worth, given that the world's best attorney for recovering money was aggressively persuing restitution to victims who lost money.  That he did not wait for price discovery to run it's course, suggests that other time sensitive motives a may have influenced his decision to sell the claim of his feeder fund for what was almost certainly going to be a discount to the value of the ultimate recovery.

 

You're probably correct Tim.  Just too bad the actual investors are getting screwed over by their manager.  Cheers!

[bookie71]

A few folks made some money from the claims on the Exxon Valdez oil spill.  Is it right or wrong?  Folks needed money to keep their boats, houses, cars etc.  People were willing to pay.  simply a future value, present value calculation. Actually it took much longer for the claims to get paid than most anticipated.

[constructive]

The man who sold the claim (evidently he had offered the claim to distressed debt or claims investors at the highest bid) wasn't a victim, but an offshore owner of a Madoff feeder fund.  The managers of those feeder funds, unlike the victims, we're generally sophisticated operators who didn't ask too many questions about how Madoff made his remarkable stated returns. 

 

Once the fraud became known, a prudent, sophisticated manager should have waited for price discovery to see how much his claim was worth, given that the world's best attorney for recovering money was aggressively persuing restitution to victims who lost money.  That he did not wait for price discovery to run it's course, suggests that other time sensitive motives a may have influenced his decision to sell the claim of his feeder fund for what was almost certainly going to be a discount to the value of the ultimate recovery.

 

Plus, who knows if he's refunded all the cash to his investors yet. Based on his past mistakes, I assume he's still not doing right by his clients and the lawsuit against Baupost is being paid for with client money.

[JSArbitrage]

I wouldn't like Seth buying directly from an unsophisticated Madoff victim and making a profit.  But this was a feeder fund managed by a sophisticated investor.  I am fine with it.