The Puerto Rico business partner of John Paulson is asking a local court to block alleged attempts by the financier to gain control of a real estate company, the latest twist in an increasingly bitter legal feud with the hedge fund billionaire.
(Bloomberg) — The Puerto Rico business partner of John Paulson is asking a local court to block alleged attempts by the financier to gain control of a real estate company, the latest twist in an increasingly bitter legal feud with the hedge fund billionaire.
Fahad Ghaffar’s company, Better Puerto Rico LLC, on Tuesday sought an injunction to prevent Paulson PRV Holdings from making further changes to V12, an entity that owns the property beneath luxury auto dealerships in the US territory that sell Lamborghinis and Maseratis.
Ghaffar says Better Puerto Rico owns a 50% stake in V12 and has corporate voting rights. But since he and Paulson fell out this year, Paulson PRV has taken unilateral actions, including firing Ghaffar as V12’s chief executive officer, replacing its principal financier and engaging in new construction projects, according to the filing.
“In other words, this is a classic corporate coup d’etat,” Better Puerto Rico alleges in the filing, in which Ghaffar is asking to be reinstated as CEO and for Paulson’s alleged actions to be undone. “Paulson PRV continues to operate V12 as if it was the only full member or shareholder.”
The salvo comes on the heels of a federal lawsuit Ghaffar filed last month in which he accused Paulson of cheating him out of his share of the business, and as the 67-year-old financier and his wife, Jenica Paulson, are locked in contentious divorce proceedings. The business is owned by one of several trusts that Jenica Paulson alleges her husband used to shield billions of dollars in assets from her.
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Paulson and Ghaffar are longtime business partners in Puerto Rico. Ghaffar has said he holds a stake in several of the billionaire’s properties, including the Condado Vanderbilt Hotel and La Concha Renaissance resort, two of Paulson’s most iconic on the island.
In a statement, Paulson’s spokespeople called Ghaffar’s filing Tuesday “another meritless lawsuit with the sole intent of gaining media exposure to deflect scrutiny from the serious suits that have been and will be filed against him.”
On Monday, Puerto Rico’s Noticel newspaper reported that Ghaffar is facing an $8.8 million suit from another business partner in the territory. The partner claims Ghaffar denied him distributions and other income from their hospitality joint venture.
In a statement, a spokesperson for Ghaffar called the suit meritless.
In the federal case, Ghaffar claims he paid $17 million for a convertible note that would eventually give him a 50% share of the business. He claims the note never materialized and that he was then ousted as CEO.
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Paulson’s spokespeople said in a statement last month that the federal suit was a “baseless attempt to deflect attention” and that they would be filing a complaint against Ghaffar showing numerous instances of wrongdoing.
Paulson has a net worth of $5 billion, according to the Bloomberg Billionaires Index.
The federal case is Ghaffar v. Paulson, 23-cv-1455, US District Court, District of Puerto Rico.
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