Jim Chanos calls suit accusing him of embezzling funds ‘baseless and defamatory’

0
64
Jim Chanos calls suit accusing him of embezzling funds 'baseless and defamatory'

Jim Chanos

Scott Mill | CNBC

Well-known short seller Jim Chanos called a lawsuit accusing him of embezzling funds for personal gain “false, baseless and defamatory.”

Chanos made the statement to CNBC's Scott Wapner in response to allegations made by a former Chanos & Co. investor.

Conlon Holdings, a Chicago-based company led by Sean Conlon, filed the lawsuit in New York state court on Friday, alleging that Chanos used his company as a “piggy bank” and gave him $10 million in outstanding loans borrowed from his company over a period of more than a decade.

“As Mr. Conlon knows, the internal loan was repaid in 2021, and since 2019 I have invested over $30 million in my company,” Chanos said in the statement. “In fact, all of my partners in the management company have lost money in recent years, none more than me. Mr. Conlon is simply trying to mitigate his losses with this crude extortion attempt.”

Conlon did not immediately respond to a request for comment.

Chanos, best known for predicting the collapse of energy trading firm Enron, closed his hedge fund late last year and converted it into a family office and advisory firm. His decision came after years of underperformance in which short bets, including on Tesla, didn't work.

The suit also alleges that Chanos sold his Miami condo, formerly owned by Chanos & Co., for $17.8 million earlier this month without notifying his partners. The suit also says Chanos' girlfriend, Crystal Conners, was the selling agent in the transaction, which would have earned him $540,000 at normal commission.

Bloomberg News was the first to report on the lawsuit.

Don't miss these exclusive reports from CNBC PRO