Disappointing former hedge fund manager Philip Falcone lost fraud and breach of contract judgments in a case of a local broker in New York’s loan to a series of art-backed loans. The ruling, released on July 25 in the New York Supreme Court, stems from a complex plan that includes a $6.3 million 20-carat Harry Winston Diamond engagement ring and four pieces of art by Damien Hirst, Richard Prince and Pablo Picasso.
Falcone, founder of Harbinger Capital, is also a one-time majority shareholder New York Timesonce considered worth $2 billion. He made money by betting on subprime mortgages in 2007. In 2013, he effectively banned the financial services industry after reaching a $18 million settlement with the Securities and Exchange Commission. This is an allegation of market manipulation, abusing customer funds to pay taxes, and preferring some customers over others.
Court documents show that Falcone used two different lenders to make a double artwork of loans, and then kept the pieces in his property. He also allegedly used a limited liability company to hide it in searches of other potential creditors.
According to court documents filed by law firm Grossman LLP, the document represented BLCE in the lawsuit, specializing in research on the $92.5 million loan received in 2013 by Art Law Falcone and his wife Lisa Maria, and Melody Business Finance in 2013. The loan acquires a variety of assets, including 12 works of art. Soon after, the couple established a new entity called “First Street LLC” and they transferred ownership of the artwork. By 2018, Falcones had defaulted on loans with melody.
Falcone then attempted to raise funds through a range of other secured loans, including some from BLCE, court documents show. A $600,000 loan was guaranteed by his wife’s Harry Wilson diamond ring, and Booles’s estimated price was $6.3 million.
Between September 2019 and October 2020, Falcone deux nusRichard Prince Untitled (denim)and Hurst I love you, love buds and Playful bubble gum kiss. Grossman LLP said Falcone even handed themselves over to BLCE in person. He then signed a contract claiming that he personally owned the artwork of Picasso, Prince and Hearst and that they were not bound by any personal property mortgage, security agreement or affidavit agreement. “But these statements and warranties are wrong,” Grossman LLC said in a statement on its website.
Falcone boldly declared that the double commitment to art “is equivalent to getting a second loan on the house and giving a second mortgage.” Grossman LLP said it was a “quite common practice” Support documents will be available on March 7.
In February 2020, Melody Finance sued Falcone for violating a 2013 loan and attempting to cancel the artwork. However, Falcone refused to hand them over and then used them as collateral in the loan Blce brought. Shortly thereafter, he also defaulted on loans with BLCE.
As a result, BLCE is for sale Bubble gum kiss and Untitled (denim) auction. In June 2021, Melody Finance subsequently sued BLCE, claiming to possess the title of four works of art. By then, it was obvious that Falcone lied about his title and ownership of Boers. “Then our client resolved the dispute [Melody Finance],” said Grossman LLP.
“At the end of 2021, Falcone filed a lawsuit claiming that our clients should not cancel the loan and sell collateral on the loan,” the law firm said. “Our clients, in turn, filed a counterclaim against Falcone for fraud and breach of contract by falsely stating his ownership and ownership and legal status of the artwork. We have made an overview of our contract and our client approval before ensuring Falcone’s usury and Replevin claims to dismiss Falcone’s lawsuit and Replevin’s publicity ahead of our overview of 2023’s general judgment, we have made an objection judgment on our contract and our client approval.”
In court documents, BLCE said it did not know about First Street LLC and its ownership of the artwork, which is why they did not search the database for Unified Commercial Regulation (UCC) documents. UCC documents state when a specific asset in a secured transaction, such as a work of art, is used as collateral for a loan or other obligation.
On July 25, Judge Lyle E. ruled in favor of the counterclaim of BLCE’s breach of contract, compensation and fraud, and ordered the loan company to “the amount that should be determined at the time of trial or other amounts to resolve the issue.
Grossman LLP responded to the verdict, saying: “We are pleased to have achieved favorable results for our clients and are proud to continue our record of litigation victory in art-backed loan transactions.”
Law firm refuses Artnews.
John Lonuzzi, a lawyer representing Falcone, did not respond to a request for comment.
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