BURNING RUBBER

Billionaire John Paulson’s New Headache: Porsche Dealership Catches Fire

The blaze has opened a new front in the bitter war between hedge fund titan John Paulson and his former business partner.

A Porsche dealership at the center of a battle between hedge fund titan John Paulson and his Puerto Rico business partner erupted in flames this week, a dramatic development in an already cinematic legal saga.

Paulson, the financier best known for shorting the housing market in 2007, is battling former business partner Fahad Ghaffar for control of his Puerto Rican hospitality empire, which includes luxury hotels, condos, and car dealerships. Ghaffar sued Paulson in September, alleging he illegally locked him out of his half of F40, a company that owns numerous luxury car dealerships on the island.

On Tuesday, one of those dealerships caught fire while mechanics were working on a car in the attached workshop, according to local newspaper El Vocero. The paper reported that approximately 25 firefighters were called to the scene of the 11:40 a.m. fire and battled the blaze for 90 minutes. The Bureau of Emergency Management and Disaster Administration also responded.

At least two of the luxury vehicles—which sell for at least $92,000 each—were damaged, according to the paper.

The fire opened a new front in the ongoing war of words between the two men, with Ghaffar blaming Paulson’s negligence for the blaze.

“After incorrectly removing Ghaffar from a 50 percent investment he made into F40, due to lack of care and following correct protocols, multiple Porsche Taycans caught fire at F40,” his lawyer said in a statement to The Daily Beast.

A spokesperson for F40 said the damage was the result of an electric car fire and that their technicians were able to “quickly extinguish the fire and none of our employees were injured.”

“These types of fires occasionally occur with electric cars,” the spokesperson said in an email. “We are appalled that Fahad would try to turn this unfortunate matter into a publicity tactic for himself. Fahad was appropriately terminated from F40 in August.”

Ghaffar, who previously managed many of Paulson’s properties on the island, claims in his lawsuit that Paulson convinced him to take a 50 percent stake in the company in 2002. Ghaffar says he sent Paulson $17 million for the purchase and served as president and CEO of F40 from February 2022 to Aug. 18, 2023, when Paulson suddenly emailed to remove him from all of his duties at the company. He is suing to recoup his investment and what he claims is his share of the company’s profits.

Paulson filed a motion to dismiss calling the suit “utterly without merit” and an attempt to deflect attention from Ghaffar’s own “multi-year fraud, bribery, kickback, self-dealing, and embezzlement schemes.”

The suit was only the opening salvo in the battle between the two former allies. He then followed with a suit of his own, claiming Ghaffar used “criminality, deceitful machinations and underhanded self-dealing” to enrich himself and his relatives while managing Paulson’s properties. Ghaffar then filed a second suit, accusing Paulson of concocting the allegations in order to end their partnership in the hospitality empire and block him from his share of the profits. Relations between the two men reportedly became so tense that Paulson banned Ghaffar from entering any of his Puerto Rico properties.

Just last week, Paulson Puerto Rico posted a video from its various auto dealerships—including the Porsche dealer—on LinkedIn, extending a “heartfelt thanks and appreciation to our incredible team.”

“Thank you again for being an integral part of our success story,” the post said.

– Pilar Melendez contributed reporting

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Emily ShugermanSenior Reporter

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