John Paulson Wins $50M Judgment in Fight With Ex-Partner

A judge handed billionaire hedge funder John Paulson the upper hand in his breakup with an ex-business partner.

An arbitrator determined Fahad Ghaffar owes Paulson approximately $48 million, the New York Post reported. The arbitrator said that Ghaffar engaged in “intentional misconduct and fraud,” leading to his termination by Paulson three years ago.

Most of the money owed is related to profits from the Dynamic Payments investment, while the rest is from an investment in a software company and American Express rewards points. Additional damages could still be forthcoming.

Paulson’s lawyers, Terrence and Darren Oved, celebrated the victory, arguing the arbitrator found that “Ghaffar committed fraud, securities fraud, and violated both his fiduciary and contractual obligations.” Ghaffar’s attorney, meanwhile, criticized the publicization of the arbitration results.

Darren Oved and Terrence Oved (Oved & Oved)

Ghaffar began working for Paulson in 2013, helping to manage Paulson’s portfolio of real estate investments, including hotels and resorts, in Puerto Rico. A decade later, however, Ghaffar sued Paulson for allegedly reneging on a deal set to give Ghaffar a 50 percent stake in a luxury car dealership on the island. Paulson responded with a lawsuit of his own, accusing Ghaffar of racketeering.

The arbitration hearing between the two sides unfolded over three weeks in November.

Besides his real estate business, Puerto Rico is also linked to Paulson through his contentious divorce proceedings with ex-wife Jenica, who accused the hedge funder of improperly enriching himself through a condo purchase on the island.

Last month, Jenica received the deed to the former couple’s Upper East Side mansion at 9 East 86th Street, a deal that valued the 20,500-square-foot home at $30 million, or $1,463 per square foot.

The divorce captured real estate observers for years due to the size of the couple’s real estate holdings and the lack of a prenuptial agreement to protect the $20 billion the money manager made by shorting the housing market before the 2008 crash.

The couple, who married in 2000, reportedly spent more than $100 million on properties in New York, Southampton and Aspen between 2004 and 2012. In 2008, they spent $41.3 million for three parcels of land on Southampton’s Lake Agawan and built a 15,000-square-foot home on the 10-acre property.

— Holden Walter-Warner