NEW YORK, April 29 (UPI) -- A bankrupt hedge fund is in talks with New York firm Goldman, Sachs & Co., to recoup losses incurred in a securities deal, sources told the Financial Times.
Basis Yield Alpha Fund is in talks with Goldman over its investment of $100 million in a $1 billion security Goldman packaged as Timberwolf, and later criticized in in-house e-mails.
Timberwolf was set up in March 2007. Basis said it lost $56 million on the security that was part of the focus of an 11-hour Senate subcommittee on investigations hearing on Tuesday.
Goldman declined to comment on its talks with Basis, the newspaper said.
The Timberwolf deals were discussed in Goldman e-mails, however. An e-mail from Tom Montag, a manager at Goldman's trading division, said, "Boy, that Timberwolf was one (expletive) deal."
In another e-mail, a senior Goldman executive said the Timberwolf deals "will live in infamy."
The Securities and Exchange Commission filed a lawsuit April 16 against Goldman that says it secretly created investments designed to fail while a hedge fund manager, John Paulson, who helped package the deal, was betting against them.
