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The Honolulu Advertiser
Posted on: Tuesday, March 17, 2009

BUSINESS BRIEFS
Fund managers' lawyers allege evidence blizzard

Advertiser News Services

Hawaii news photo - The Honolulu Advertiser

Ralph Cioffi

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Hawaii news photo - The Honolulu Advertiser

Matthew Tannin

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NEW YORK — Lawyers for two former Bear Stearns hedge fund managers charged with lying to investors about the collapse of the subprime mortgage market complained yesterday that the government has hampered their defense by burying them in an avalanche of documents.

Pretrial motions filed by both sides in federal court in Brooklyn did not detail the potential evidence against Ralph Cioffi and Matthew Tannin. But the exchange signaled that the first major white-collar case to hit Wall Street amid the housing market meltdown will be complex and contentious.

Prosecutors put the total for documents it has produced at about 8 million. Defense attorneys said it was nearly 9 million — and asked a judge to order the government to tell them which of it matters.

"Discovery in this matter has left the defense looking for a needle in a haystack," wrote Cioffi's lawyers. "The government ... has refused to provide any guidance to the defense as to what within this mountain of discovery really is at issue."

Cioffi and Tannin were accused last year of encouraging investors to stay in their hedge funds, exposed to subprime mortgages, even as they knew the credit market was in trouble.


GENERAL GROWTH GAINS SOME TIME

LOS ANGELES — Troubled shopping mall owner General Growth Properties Inc. said lenders have waived default on a $2.58 billion credit agreement until the end of the year, allowing the troubled shopping mall owner some time to regain its financial footing.

But its Rouse Co. unit extended the expiration date on a request for forbearance on another more than $2 billion worth of debt, after it failed to convince enough of its bondholders to give it more breathing room.

General Growth, whose Hawai'i holdings include Ala Moana and Ward centers, said it has enough consents from lenders under its 2006 corporate credit agreement, which includes a $1.99 billion term loan and $590 million revolving credit facility, to extend a forbearance agreement through the end of 2009.

But the Chicago-based real estate investment trust, struggling to stave off a Chapter 11 bankruptcy filing, also had asked holders of $2.25 billion worth of bonds last week to put off calling in payments until the end of 2009 while it tries to refinance its debt.


HOME SALES LIKELY TO REMAIN SLOW

LOS ANGELES — A key gauge of homebuilders' confidence remained near historic lows in March as builders saw a drop in prospective homebuyers visiting model homes amid rising job losses and economic fears, according to a survey released yesterday.

The National Association of Home Builders/Wells Fargo housing market index stood at nine, one point off January's record low.

The report reflects a survey of 384 residential developers nationwide, tracking builders' perceptions of market conditions. Index readings lower than 50 indicate negative sentiment about the market.