Europe reckoned with Greek elections and the Spanish government took a controlling stake in the country’s third-largest lender. Phil Falcone kept cool at a hedge fund conference, despite turmoil facing LightSquared. Green Mountain founder Robert Stiller talked about the sale of company stock that led to his ouster as chairman. That and more, in this morning’s Wall Street roundup.
Europe simmers: European governments held back a part of rescue funds promised to Greece after weekend elections raised the specter that the country’s new governing coalition might shred an existing bailout agreement. As in, literally. With the Greek government unformed, and leftist Syriza coalition talking tough, the Journal reports that German and Finnish made a stink before agreeing to release $5.5 billion in bailout funds.
Spain said it would take over Bankia SA yesterday, converting $5.8 billion in preferred equity into voting shares, good enough to control a 45 percent stake in the nation’s third-largest lender. The country’s banking system is looking more and more like an Ireland-sized catastrophe, according to Bloomberg: While the government has ordered banks to post additional capital to cover losses on construction and property loans, the prescribed collateral-raise would leave nothing in the tank for trillions more in home loans and corporate debt.
Calm before: Storm clouds may gather over Phil Falcone, but when Dealbook went to see the Harbinger Capital founder speak at the SALT conference in Vegas, the hedge fund manager was the epitome of calm, or at least, he spoke thoughtfully and in mellifluous tones. On the other hand, no one asked about LightSquared.
Bad documents: The Florida Supreme Court will hear arguments today in a case that could undo hundreds of thousands of foreclosures, as the court decides whether banks that used fraudulent paperwork to file foreclosures can dismiss the suits and refile with new documents. Reuters has the story of how a 35-year-old drywall hanger initiated the case, and potential implications in Florida and across the country.
Stiller spills: Robert Stiller told his side of the story to the Wall Street Journal. The Green Mountain founder was stripped of his role as company chairman after selling $123 million in stock last week in a margin call as Green Mountain’s share price plummeted following the release of second-quarter results. Stiller, often described as the richest man in Vermont, wore sweaters to work, practiced yoga…and took out hundreds of millions of dollars in loans for charitable donations and real estate transactions, including a $17.5 million Time Warner Center apartment previously owned by Tom Brady. “Lavish is relative,” Stiller told the Journal.
When, not if: The FDIC will announce its M.O. for the next crisis that brings a financial institution to its knees: Regulators will seize the parent company and allow units to operate; Shareholders will be wiped out and bond owners would likely suffer losses as their holdings are swapped for equity in a new entity.
Expense account: Wendy’s offered the president of its international division a lump sum payment of $850,000 if he moves to the company’s new headquarters in Dublin, Ohio, and stays for at least two yeas, Footnoted reports. Word of that payment, buried in the supporting exhibits of the company’s quarterly report, comes after Wendy’s paid millions of dollars in severance costs when its CEO opted to resign over moving from Atlanta to Dublin last year.