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

CNBC

Jim Chanos was sued by a former partner accusing him of using his firm as a “piggy bank” with $10 million of outstanding loans that he borrowed from his company over more than a decade, according to a Bloomberg News report. Conlon Holdings, a Chicago-based firm run by Sean Conlon, filed the suit in New York State court over the weekend. Jim Chanos Scott Mlyn | CNBC

Famed short seller Jim Chanos called a lawsuit accusing him of embezzling funds for personal use, “false, baseless and defamatory.”

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

Conlon Holdings, a Chicago-based firm run by Sean Conlon, filed the suit in New York State court over the weekend, alleging that Chanos used his firm as a “piggy bank” with $10 million of outstanding loans that he borrowed from his company over more than a decade. The suit was originally reported by Bloomberg News.

“As Mr. Conlon knows, the internal loan was paid off in 2021, and since 2019 I have put over $30 million into my company,” Chanos said in the statement. “Indeed, all of my fellow management company partners have lost money over the past few years, none more than me. Mr. Conlon is simply trying to mitigate his losses by this crude shakedown attempt.”

Conlon didn’t immediately respond to a request for comment.

Chanos, best known for calling the collapse of energy trading company Enron, closed his hedge fund late last year and converted it to a family office and advisory business. His decision came after years of underperformance where short bets including Tesla didn’t work.

The lawsuit also alleged that Chanos sold his Miami apartment that was formally owned by Chanos & Co. for $17.8 million earlier this month without giving his partners advance notice. Meanwhile, the suit said Chanos’ girlfriend Crystal Conners was the sales agent on the transaction, which would have made $540,000 at standard commission rates, Bloomberg reported.

CNBC

The full article is available here. This article was published at CNBC Finance.