By Britt Erica Tunick
In late 2006, Phil Falcone joined a handful of
hedge fund managers in making what turned out to be a
well-timed bet against the housing market. Not only did that
wager send his flagship hedge fund returns soaring the next
year, it also transformed Falcone into a hedge fund rock star.
Seemingly overnight, the once-obscure distressed fund manager
became one of the industry's most recognizable names.
With billions of dollars at his disposal, Falcone's
Harbinger Capital Management grew bolder, as evidenced by an
early 2008 activist play for the New York Times Co. A 19% stake
in the celebrated newspaper company not surprisingly drew media
scrutiny, as did his personal life, including the increasingly
public profile of his wife-a former model-a pet potbellied pig
and the purchase of a pricey Manhattan double-wide limestone
townhouse once owned by former Penthouse publisher Bob
Guccione. By November 2008, it...