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A former business associate of John Paulson in Puerto Rico has consented to withdraw a fraud lawsuit against the billionaire as a result of a confidential agreement, as stated in a recent announcement.
Fahad Ghaffar and the lawyers representing Paulson jointly requested the dismissal of the case in a court submission in San Juan federal court that revealed no specifics about the settlement. Ghaffar alleged in a suit filed last year that Paulson made misleading assertions to convince him to invest $17 million in a luxury car dealership located on the island.
The lawsuit highlighted a divide between Paulson and Ghaffar, who had been alongside the hedge fund mogul throughout many of his investments in Puerto Rico over the last ten years. Paulson later initiated a lawsuit against Ghaffar, alleging that he and his family diverted millions from Paulson-owned hotels and other ventures. That lawsuit is still ongoing.
Martin Russo, an attorney for Ghaffar, along with a representative for Paulson, both indicated that the settlement was linked to the sale of Ghaffar’s stake in the car dealership to Puerto Rican entrepreneur Víctor Gómez III. Recently, Paulson’s company in Puerto Rico announced a partnership with Gómez to market vehicles on the island, including Fords and Ferraris.
The specifics of the sale have not been revealed. Ghaffar alleged in his lawsuit that Paulson had promised a convertible note that would secure him a 50% interest in the car dealership in exchange for his investment but failed to deliver.
“This sale aims to benefit the employees of these major companies and to support the vehicle brands they represent,” Russo stated. “Mr. Ghaffar wishes the best for the employees and Mr. Gomez in his future endeavors.”
Russo also expressed his belief that Ghaffar would successfully secure the dismissal of Paulson’s lawsuit.
Paulson, recognized for his strategic bet against the U.S. housing market before the 2008 subprime crisis, owns multiple businesses in Puerto Rico, including two of its leading hotels, the Condado Vanderbilt and the St. Regis Bahia Beach Resort.
