Vulture culture
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Vulture culture

Be humble in victory and gracious in defeat.


Last October, Euromoney wrote about the legal battle between US rural internet services provider Windstream and activist hedge fund Aurelius Capital Management.

The row concerned a sale leaseback of the former’s fibre optic cable network in 2015 which Aurelius claimed violated debt terms in place to preserve assets for noteholders. The hedge fund had built up a large short position in the debt in the expectation that the sale leaseback would trigger a CDS event of default.

On Friday February 15, Aurelius won the case and Windstream was ordered to pay $310 million plus interest to the hedge fund. As we have previously pointed out, the latter’s victory could now trigger cross defaults on $5.7 billion of Windstream debt. The firm is, unsurprisingly, appealing the decision.

Now, activist hedge funds are not, admittedly, known for their restraint, but Aurelius’s public reaction to the decision has taken the market aback. The firm is run by Mark Brodsky, alumni of Elliott Management, who has a fearsome reputation in the business following a key role in bondholders’ legal battles with Argentina and Puerto Rico.

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