Puerto Rico: Who Is Susheel Kirpalani?
Friends of KSE have been talking about the Puerto Rico bailout currently being discussed by the House of Representatives, and continually point to the hearing last April in the House Resources Committee when Susheel Kirpalani of Quinn Emanuel Urquhart & Sullivan testified and made some dodgy, misleading comments — at best — as to who is clients are and what he is up to working Capitol Hill as an unregistered lobbyist. We can only assume he has adopted the so-called “Daschle Exemption” (see here: Politico on Daschle Exemption), where lobbyists hide behind loopholes in the Lobbying Disclosure Act (LDA) so the public doesn’t really know what they are up to. The absurdness of that position will become more clear below, but let’s get back to the hearing and the real issue at hand.
According to an excellent piece by Breitbart (see here: Breitbart News), it wasn’t until the April hearing that we found out who Mr. Kirpalani was representing thanks to a Q & A session with Congressman Doug LaMalfa (R-CA). You can watch the entire hearing (House Resources Hearing on Puerto Rico). Summary of the Q & A follows:
Congressman LaMalfa: “Your clients, I understand, are Goldentree Asset Management, Merced Capital, Tilden Park Management, and Whitebox Advisors? Is that correct?”.
Mr. Kirpalani: “That is correct…..in addition to some individuals.”
Congress LaMalfa: “So these are hedge funds, they regularly seek out situations especially post-2014, where they are looking to invest in a situation where there is trouble?”
This is where it gets good.
Mr. Kirpalani: “These particular clients that I’m representing….I have actually not been very active in the hedge fund space, have never represented them before.”
Whoa, full stop. First, it wasn’t until a few weeks later that a Fox News Latino (Fox New Latino)
Op-ed did a follow up piece on the subject and also outed Boston based hedge fund, Baupost Group as another one of Mr. Kirpalani’s clients. As is EJF Capital, according to Breitbart. CQ/Roll Call (paywall) had a piece on May 5th and took this subject a little further and highlighted:
“Baupost’s founder Seth Klarman, is a regular political donor, including a Feb. 24 donation to Speaker Paul D. Ryan’s joint fundraising committee of $100,000, according to Federal Election Commission records.”
That’s curious timing for a $100,000 contribution to the Speaker of the House just weeks before the initial House Resources markup on the legislation of concern to Mr. Kirpalani and his clients…and…
“Former Sen. Judd Gregg, R-N.H., is also working as a spokesman for the effort. The investment funds are clients of the law firm Quinn Emanuel Urquhart & Sullivan, which has hired a lobbying shop, the Cypress Group, according to a filing with Congress under the Lobbying Disclosure Act.
Initially, the Cypress Group, which did not respond to a request for comment, identified its client only as the Quinn Emanuel firm. After inquiries from CQ last week, the Cypress Group updated its filings as recently as Saturday with names of the coalition and some of its members, lobbying records show.”
So, let’s break this down. A respected former member of the Senate (KSE likes Senator Gregg, for the record), Judd Gregg, is now Daschle Exemptioning (yes we turned “exemption” into a verb) it and a tiny lobbying firm, Cypress Group, registered Mr. Kirpalani’s law firm with the House/Senate Clerk’s office for advocacy work rather than the actual clients and had to make modifications to their LDAs over the weekend to be in compliance. This is way too cute to be a coincidence and reeks of typical K Street bullshit.
In addition, with the help of that Mom & Pop search engine, Google, KSE was able to find the following information on Mr. Kirpalani, his firm and their previous work with hedge funds and distressed debt. Let’s remember that Mr. Kirpalani said he hasn’t been very active in the hedge fund space. KSE is sure Mr. LaMalfa and others on the Committee would appreciate knowing if Mr. Kirpalani was being as forthcoming as possible during his Q & A before the Committee. See below:
NII Holdings Bankruptcy: Susheel Kirpalani (Quinn) represented Scott Winn as independent manager (an estate fiduciary who played a key role in the case and in the negotiations). (Source: NII Bankruptcy Filing Link);
GoldenTree and Whitebox were prominently involved in the bankruptcy (members of the NII International Telecom (LuxCo) noteholders). (Source: Law360.com>);
Nortel Bankruptcy: Susheel Kirpalani (Quinn) represented Solus and Macquarie as NNCC bondholders. (Source: Law360.com);
GoldenTree was in the Milbank Group (Source: Bloomberg);
Washington Mutual Bankruptcy: Quinn (including Susheel Kirpalani) served as WaMu’s special counsel. (Sources: AmLawDaily, Reuters);
Whitebox was involved as a trust preferred holder (Source: Case 08-12229 Filing);
TerreStar Bankruptcy: Susheel Kirpalani (Quinn) represented Series B Cumulative Convertible Preferred Stockholders, Millennium International Management LP, and Solus Alternative Asset. (Source: Law360.com);
Whitebox is listed as part of the Ad Hoc Group of Noteholders of 15% Senior Secured Notes (Source: Case 10-15446 Filing);
Verso Bankruptcy: Susheel Kirpalani (Quinn) are listed as Counsel to several Verso entities. (Source: Case 16-10163 Filing);
Whitebox is listed as a secured lender. (Source: Case 16-10163 Filing);
GT Advanced Technologies Inc Bankruptcy: Susheel Kirpalani (Quinn) represented GT Advanced Equipment Holding, LLC. (Source: GT Advanced Technologies Bankruptcy Filing);
Whitebox is a part of GT’s lending group. (Source: Wall Street Journal);
Whitebox is listed on page 16 of 01/06/2016 modified claims list. (Source: Filing);
Quadrant: Quinn represented Merced in a Delaware case in involving Quadrant. (Source: Quinn Emanuel Website Quinnemanuel.com, Quinnemanuel.com);
Countrywide: Quinn served as counsel to AIG in Countrywide RMBS settlement case. (Source: Countrywide RMBS Settlement Filings); and
Tilden Park Capital is listed as respondent. (Source: NY Supreme Court Filings).
If Mr. Kirpalani’s comments above don’t give you pause, on May 11th he presented to American’s For Tax Reform (ATR) roughly one month after ATR released this press release supporting the initial House Resources draft Puerto Rico bill, which btw, was blasted by conservative Republicans (ATR Press Release). KSE has no earthly idea as to why ATR would support this legislation, but then again, this is Washington where things don’t always happen because of the bill’s merits.
Bottom line, KSE hopes the MSM, staff on the Hill and appropriate interest groups will take some time to dig into Mr. Kirpalani’s efforts. While not registering to lobby is one point, his honesty with the House Resources Committee is a much bigger question and should be further scrutinized. While KSE will get to Mr. Kirpalani’s client, COFINA, in the coming days, keep your eyes open because ours are.
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