Will Plainfield's Monarch condos be caught up in hedge fund mess?

The Monarch is part of a joint venture with Plainfield Asset Management LLC.

Plainfield real estate watchers have wondered for the longest time how it is that Glen Fishman/Dornoch Plainfield/P&F Management's The Monarch condo project can have escaped foreclosure, what with ONLY THRE UNITS UNDER CONTRACT and NO SALES CLOSED (latest info I have been told).

An investigation by New York City's District Attorney, joined in last week by Connecticut Attorney General Richard Blumenthal (see here), into a Greenwich, Conn., based hedge fund, Plainfield Asset Management LLC, may supply an answer to that question.

Will it also involve The Monarch in the mess that Plainfield Asset Management LLC seems to be at the middle of?

Searching the web for Glen Fishman's connections to Plainfield Asset Management LLC turns up several interesting web pages --

• Maplewood Homebuilders; described as a joint venture between Glen Fishman and Plainfield Asset Management LLC, and noting that the joint venture bought up the bankrupt Kara Homes assets in 2007;
  
  
• P&F Management Company, LLC; a one-page public relations piece detailing P&F Management as a joint venture based in Hillside, NJ, and established in 2005 by Fishman and Plainfield Asset Management LLC;
  
  
• Distressed Debt and Turnaround Investment Summit; an event sponsored by NYinc in March 2009, headlining Glen Fishman of P&F Management, yada, yada, yada; and
  
  
• Monarch Living; the website marketing The Monarch, 'luxury' condos in Plainfield, NJ, (among several other communities), a joint venture between Fishman and 'an entity affiliated with Plainfield Asset Management LLC' (P&F Management?).

So what's the deal with Plainfield Asset Management LLC?

FORTUNE magazine assigned its ace investigative reporter, Katie Benner, to the story and a 3-month investigation led to her report, which appeared online this past Friday (see here), which was picked up by the Danbury News-Times (see here) and Teri Buhl, a columnist with Hearst's Connecticut newspapers on her blog (see here).

What's the beef?

Both the NYC District Attorney and the Connecticut AG are looking into Plainfield Asset Management's distressed properties lending practices, which include sky-high interest rates (for commercial loans), forcing borrowers to pledge their personal assets (including homes), and sharp practices (such as one-day-notice audits) used to force borrowers into default. The New York investigation is of a criminal nature, according to Hedge Fund Net (see here).

This is in addition to the angst created among the hedge fund's investors over the 'gating' of their investments in 2008 -- the 'gate' not to be lifted until 2012!

Funds under management have fallen from a high of $5 billion to a current $3.3 billion, of which $2.74 billion is 'gated' and unavailable to its investors. (You may note some discrepancies about the hedge fund's assets among the websites involving Fishman listed above -- evidently no one goes back to correct any changes once info is posted.)

But there is another wrinkle, the 'Plainfield' in 'Plainfield Asset Management'.

When I chanced upon the Fishman connection in November 2008, it caught my eye, but I figured it had to do with Plainfield, Connecticut, since that was the state in which the hedge fund was located. (Besides us and them, there are Plainfields in Indiana, Illinois and Wisconsin that I am aware of.)

Turns out, according to Benner's piece, that Plainfield Asset Management's founder, Max Holmes, grew up in -- are you ready for this? -- Plainfield, New Jersey, the inspiration for the firm's name. His father was a proofreader at the Star-Ledger and his mother a high school German teacher and librarian.

Small world, isn't it?

So does the 'P' in P&F Management stand for 'Plainfield'?

At any rate, I'll be watching this one develop.

At the very least, we may find out why no one seems overly upset at the lingering limbo of condo sales at The Monarch.

Max Holmes, Plainfield native, Fishman partner.

---

• FORTUNE: "The smouldering hedge fund"
• Danbury News-Times: "Fortune report sparks Conn. AG's interest in Plainfield"
• Teri Buhl: "Report says NYC DA is investigating Plainfield Asset Management"
• Hedge Fund Net: "Fortune Plainfield exposé unsettling"
• Clusterstock: "After All This Time, $3B Plainfield Continues To Gate Clients"
• PAM: "Plainfield Asset Management LLC"

-- Dan Damon [follow]

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