Tuesday, July 14, 2009

Carlyle Group's Bad News Day

It's getting harder to keep The Carlyle Group's pristine reputation. First, Michael Huffington sued David Rubenstein and Carlyle Capital Corporation for frittering away his $20 million investment in a year's time. SemGroup, another bankrupt Carlyle affiliate made Tulsa World:

The 9-year-old Tulsa company filed for bankruptcy protection on July 22, 2008, after losing $2.4 billion in margin calls on oil futures trades and having its credit line pulled by Bank of America, according to reports.

SemGroup's SEC filings made no mention of oil futures trading. The politically connected private equity underwriter (PEU) has Louis Freeh as Bankruptcy Examiner. Freeh serves on many corporate boards, including Fannie Mae, Bristol Myers Squibb, L-1 Identity Solutions, and MBNA.

Will other bad news hit the wires? Maybe Vought’s internal liquidity crisis that repeatedly hampered Boeing 787 production or LifeCare’s 24 patient deaths after Hurricane Katrina, the best kept secret in the Bush Katrina Lessons Learned report.

Carlyle will bring their cumulative expertise to distressed banks and public infrastructure.