What does a former lawyer who’s brand name was built as Chief Corporate Watchdog for the Securities and Exchange Commission know about the fine art of activist investing?
Richard Breeden, of Greenwich-based billion dollar hedge fund Breeden Capital, appears to be losing his investors a lot of money, so it’s a fair question. Friday, the Wall Street Journal wrote a front page story on Breeden, spelling out how his experience as chairman of the SEC doesn’t seem to transfer to success in trading, because on paper he’s lost around $200 million on his two-year investment in mass market jeweler Zale Corp (ZLC).
With media reports of Zale heading toward a Chapter 11 bankruptcy because of lagging sales and cash flow troubles, many are wondering if Breeden has a trick up his sleeve to save his equity investment or will he have to admit defeat and let other seasoned distressed debt funds do a secured loan and be first in line for an asset grab. Last week Reuters reported that 12 leases on Zales’ New York stores were up for sale, a move that looks like a desperate effort to shore up cash, but will it be in time? According to Reuters, of Zales’ $600 million credit line with Bank of America, as of January it only had about $17 million left to draw down on.
To read Teri Buhl's complete article in the Greenwich Time, please click here. |
