Millionaires Clash Over Socialite’s Child Support Claims

As an accomplished mountaineer who has scaled many of the world’s highest peaks, including Mount Everest, Annabelle Bond has found herself in some dicey situations.

Now she finds herself in a very different sort of predicament â€" a nasty legal fight between a former lover and her current one.

Her boyfriend, Andrew Cader, a former Goldman Sachs executive and part owner of the Tampa Bay Rays baseball franchise, is accused of conspiring with Ms. Bond to hide her true financial condition so that she could secure more than $50,000 a month in child support payments last December from the Wall Street financier Warren G. Lichtenstein, who has a 5-year-old daughter with the British socialite.

Ms. Bond deviously obtained the outsize child support from a Hong Kong court to “improve upon her already extraordinary life of luxury, privilege and modest fame,” contends the lawsuit, which was filed by Mr. Lichtenstein in Federal District Court in Manhattan.

That Ms. Bond lives an extraordinary life of luxury and privilege is not in dispute. The daughter of Sir John R. H. Bond, the former chairman of the global banking giant HSBC, Ms. Bond, 43, has traveled the world as a mountain climber and extreme athlete. (The lawsuit derisively calls her a “self-described ‘activist and adventurer.’ ”) Her family has homes in London, Hong Kong, Florida and Aspen, Colo.

Mr. Lichtenstein said that in order to help Ms. Bond conceal her actual economic condition and obtain inflated child support payments, Mr. Cader disguised as loans millions of dollars in cash gifts he had given her.

Mr. Cader also characterized the disbursements as loans to avoid paying gift tax in the United States, according to the complaint.

“The case was brought to prevent an injustice and reflects Warren’s deep concern for the welfare of his child,” said Stanley Arkin, the lawyer for Mr. Lichtenstein.

Mr. Cader and Ms. Bond did not respond to multiple requests for comment.

Though Mr. Lichtenstein’s lawsuit was filed in New York and raises questions about a Hong Kong court ruling, the origins of the case trace to Aspen, the ski-resort town and favorite second or third home for the Wall Street elite.

Mr. Lichtenstein, Mr. Cader and Ms. Bond all have homes in Aspen, which is where Ms. Bond met Mr. Lichtenstein, who has one child from a previous marriage. The two were once engaged but never married; their relationship ended amicably in 2007, just months before their daughter’s birth.

“He is an amazing guy, but I think that sometimes it’s better to have one happy parent than two unhappy ones,” Ms. Bond told The Evening Standard newspaper in London at the time.

Mr. Lichtenstein, 47, made his fortune through his New York-based hedge fund, Steel Partners, which he started in 1992 and last year became a publicly traded company. Known in financial circles as combative and litigious, Mr. Lichtenstein buys large stakes in underperforming companies and agitates for change. Among his holdings are WebBank, a Utah-based financial company, and the industrial business Handy & Harman.

This is the second time this year that Mr. Lichtenstein, a native of Great Neck, N.Y., on Long Island, has appeared in the press because of his personal life. The gossip papers were recently filled with rumors that he was dating the reality television personality and entrepreneur Bethenny Frankel, who is in the middle of a messy public divorce. The two are old friends and not romantically involved, a person briefed on with the matter said.

Mr. Lichtenstein’s courtroom adversary, Mr. Cader, 54, started his career as a floor broker on the New York Stock Exchange for Spear, Leeds & Kellogg. In 1997, he took over as co-chief executive of the firm and earned hundreds of millions of dollars when Goldman Sachs acquired Spear Leeds for about $6.5 billion in 2000.

(A skilled musician, Mr. Cader moonlighted as a percussionist while trading, and has a credit for playing rub-board on the 1985 Talking Heads album, “Little Creatures.”)

He and several of his former Spear Leeds colleagues bought the Rays in 2004. Though some of them play an active role in the team’s management, Mr. Cader has a small, passive stake. Mr. Cader, who has a child from a previous marriage, owns a jet, a Dassault Falcon 50, which he uses to travel among homes in Hong Kong, Aspen and Mount Kisco, N.Y. He, too, knows Ms. Bond from Aspen.

Around the time they met, Ms. Bond became locked in a legal dispute with Mr. Lichtenstein over the support of their daughter. The dispute took an ugly turn, according to the lawsuit, when Ms. Bond moved with their daughter to Hong Kong â€" “a jurisdiction that was half a world away,” according to the complaint.

Mr. Lichtenstein says he then learned that Ms. Bond and their daughter had moved into a home in Hong Kong’s upscale Strawberry Hill neighborhood. Mr. Cader was renting the home for $26,000 a month and structured it as a loan to Ms. Bond, she told Mr. Lichtenstein â€" and more than $3.5 million in cash was also described as a loan, according to the complaint.

“These representations are false,” the complaint says. “The cash gifts and lease payments from Mr. Cader â€" who on information and belief has a net worth of hundreds of millions of dollars â€" were gifts to his longtime paramour, Ms. Bond.”

Mr. Lichtenstein argues that the Hong Kong court relied on Ms. Bond’s lies in awarding her $41,800 a month in child support, plus school, tutoring, medical, travel and other substantial expenses. That amount, Mr. Lichtenstein claims, “is one of the largest â€" if not the largest â€" child support ever issued by a Hong Kong court.”

He did not name Ms. Bond, a resident of Hong Kong, as a defendant, but took aim at her dating history. “Ms. Bond has gone from one millionaire lover to another,” the complaint says, “spending millions of dollars of their money to support her lavish lifestyle, and has then moved on to her next wealthy lover or lovers to support her and finance her litigation efforts.”

According to her Web site, in 2005 Ms. Bond became the fastest woman and the fourth-fastest person ever to reach all “seven summits,” the highest peaks on each continent, having accomplished the feat in less than a year.

She has given talks at numerous Wall Street firms about her climbing exploits, including Morgan Stanley, Blackstone Group and Credit Suisse. On her Twitter feed on Thursday, she made no mention of the lawsuit, but posted a photo of herself at the top of Mount Everest.

“Nearly my summit of Everest anniversary,” she wrote. “My respects to the mother goddess.”

Millionaires Clash Over Socialite’s Child Support Claims

As an accomplished mountaineer who has scaled many of the world’s highest peaks, including Mount Everest, Annabelle Bond has found herself in some dicey situations.

Now she finds herself in a very different sort of predicament â€" a nasty legal fight between a former lover and her current one.

Her boyfriend, Andrew Cader, a former Goldman Sachs executive and part owner of the Tampa Bay Rays baseball franchise, is accused of conspiring with Ms. Bond to hide her true financial condition so that she could secure more than $50,000 a month in child support payments last December from the Wall Street financier Warren G. Lichtenstein, who has a 5-year-old daughter with the British socialite.

Ms. Bond deviously obtained the outsize child support from a Hong Kong court to “improve upon her already extraordinary life of luxury, privilege and modest fame,” contends the lawsuit, which was filed by Mr. Lichtenstein in Federal District Court in Manhattan.

That Ms. Bond lives an extraordinary life of luxury and privilege is not in dispute. The daughter of Sir John R. H. Bond, the former chairman of the global banking giant HSBC, Ms. Bond, 43, has traveled the world as a mountain climber and extreme athlete. (The lawsuit derisively calls her a “self-described ‘activist and adventurer.’ ”) Her family has homes in London, Hong Kong, Florida and Aspen, Colo.

Mr. Lichtenstein said that in order to help Ms. Bond conceal her actual economic condition and obtain inflated child support payments, Mr. Cader disguised as loans millions of dollars in cash gifts he had given her.

Mr. Cader also characterized the disbursements as loans to avoid paying gift tax in the United States, according to the complaint.

“The case was brought to prevent an injustice and reflects Warren’s deep concern for the welfare of his child,” said Stanley Arkin, the lawyer for Mr. Lichtenstein.

Mr. Cader and Ms. Bond did not respond to multiple requests for comment.

Though Mr. Lichtenstein’s lawsuit was filed in New York and raises questions about a Hong Kong court ruling, the origins of the case trace to Aspen, the ski-resort town and favorite second or third home for the Wall Street elite.

Mr. Lichtenstein, Mr. Cader and Ms. Bond all have homes in Aspen, which is where Ms. Bond met Mr. Lichtenstein, who has one child from a previous marriage. The two were once engaged but never married; their relationship ended amicably in 2007, just months before their daughter’s birth.

“He is an amazing guy, but I think that sometimes it’s better to have one happy parent than two unhappy ones,” Ms. Bond told The Evening Standard newspaper in London at the time.

Mr. Lichtenstein, 47, made his fortune through his New York-based hedge fund, Steel Partners, which he started in 1992 and last year became a publicly traded company. Known in financial circles as combative and litigious, Mr. Lichtenstein buys large stakes in underperforming companies and agitates for change. Among his holdings are WebBank, a Utah-based financial company, and the industrial business Handy & Harman.

This is the second time this year that Mr. Lichtenstein, a native of Great Neck, N.Y., on Long Island, has appeared in the press because of his personal life. The gossip papers were recently filled with rumors that he was dating the reality television personality and entrepreneur Bethenny Frankel, who is in the middle of a messy public divorce. The two are old friends and not romantically involved, a person briefed on with the matter said.

Mr. Lichtenstein’s courtroom adversary, Mr. Cader, 54, started his career as a floor broker on the New York Stock Exchange for Spear, Leeds & Kellogg. In 1997, he took over as co-chief executive of the firm and earned hundreds of millions of dollars when Goldman Sachs acquired Spear Leeds for about $6.5 billion in 2000.

(A skilled musician, Mr. Cader moonlighted as a percussionist while trading, and has a credit for playing rub-board on the 1985 Talking Heads album, “Little Creatures.”)

He and several of his former Spear Leeds colleagues bought the Rays in 2004. Though some of them play an active role in the team’s management, Mr. Cader has a small, passive stake. Mr. Cader, who has a child from a previous marriage, owns a jet, a Dassault Falcon 50, which he uses to travel among homes in Hong Kong, Aspen and Mount Kisco, N.Y. He, too, knows Ms. Bond from Aspen.

Around the time they met, Ms. Bond became locked in a legal dispute with Mr. Lichtenstein over the support of their daughter. The dispute took an ugly turn, according to the lawsuit, when Ms. Bond moved with their daughter to Hong Kong â€" “a jurisdiction that was half a world away,” according to the complaint.

Mr. Lichtenstein says he then learned that Ms. Bond and their daughter had moved into a home in Hong Kong’s upscale Strawberry Hill neighborhood. Mr. Cader was renting the home for $26,000 a month and structured it as a loan to Ms. Bond, she told Mr. Lichtenstein â€" and more than $3.5 million in cash was also described as a loan, according to the complaint.

“These representations are false,” the complaint says. “The cash gifts and lease payments from Mr. Cader â€" who on information and belief has a net worth of hundreds of millions of dollars â€" were gifts to his longtime paramour, Ms. Bond.”

Mr. Lichtenstein argues that the Hong Kong court relied on Ms. Bond’s lies in awarding her $41,800 a month in child support, plus school, tutoring, medical, travel and other substantial expenses. That amount, Mr. Lichtenstein claims, “is one of the largest â€" if not the largest â€" child support ever issued by a Hong Kong court.”

He did not name Ms. Bond, a resident of Hong Kong, as a defendant, but took aim at her dating history. “Ms. Bond has gone from one millionaire lover to another,” the complaint says, “spending millions of dollars of their money to support her lavish lifestyle, and has then moved on to her next wealthy lover or lovers to support her and finance her litigation efforts.”

According to her Web site, in 2005 Ms. Bond became the fastest woman and the fourth-fastest person ever to reach all “seven summits,” the highest peaks on each continent, having accomplished the feat in less than a year.

She has given talks at numerous Wall Street firms about her climbing exploits, including Morgan Stanley, Blackstone Group and Credit Suisse. On her Twitter feed on Thursday, she made no mention of the lawsuit, but posted a photo of herself at the top of Mount Everest.

“Nearly my summit of Everest anniversary,” she wrote. “My respects to the mother goddess.”

Millionaires Clash Over Socialite’s Child Support Claims

As an accomplished mountaineer who has scaled many of the world’s highest peaks, including Mount Everest, Annabelle Bond has found herself in some dicey situations.

Now she finds herself in a very different sort of predicament â€" a nasty legal fight between a former lover and her current one.

Her boyfriend, Andrew Cader, a former Goldman Sachs executive and part owner of the Tampa Bay Rays baseball franchise, is accused of conspiring with Ms. Bond to hide her true financial condition so that she could secure more than $50,000 a month in child support payments last December from the Wall Street financier Warren G. Lichtenstein, who has a 5-year-old daughter with the British socialite.

Ms. Bond deviously obtained the outsize child support from a Hong Kong court to “improve upon her already extraordinary life of luxury, privilege and modest fame,” contends the lawsuit, which was filed by Mr. Lichtenstein in Federal District Court in Manhattan.

That Ms. Bond lives an extraordinary life of luxury and privilege is not in dispute. The daughter of Sir John R. H. Bond, the former chairman of the global banking giant HSBC, Ms. Bond, 43, has traveled the world as a mountain climber and extreme athlete. (The lawsuit derisively calls her a “self-described ‘activist and adventurer.’ ”) Her family has homes in London, Hong Kong, Florida and Aspen, Colo.

Mr. Lichtenstein said that in order to help Ms. Bond conceal her actual economic condition and obtain inflated child support payments, Mr. Cader disguised as loans millions of dollars in cash gifts he had given her.

Mr. Cader also characterized the disbursements as loans to avoid paying gift tax in the United States, according to the complaint.

“The case was brought to prevent an injustice and reflects Warren’s deep concern for the welfare of his child,” said Stanley Arkin, the lawyer for Mr. Lichtenstein.

Mr. Cader and Ms. Bond did not respond to multiple requests for comment.

Though Mr. Lichtenstein’s lawsuit was filed in New York and raises questions about a Hong Kong court ruling, the origins of the case trace to Aspen, the ski-resort town and favorite second or third home for the Wall Street elite.

Mr. Lichtenstein, Mr. Cader and Ms. Bond all have homes in Aspen, which is where Ms. Bond met Mr. Lichtenstein, who has one child from a previous marriage. The two were once engaged but never married; their relationship ended amicably in 2007, just months before their daughter’s birth.

“He is an amazing guy, but I think that sometimes it’s better to have one happy parent than two unhappy ones,” Ms. Bond told The Evening Standard newspaper in London at the time.

Mr. Lichtenstein, 47, made his fortune through his New York-based hedge fund, Steel Partners, which he started in 1992 and last year became a publicly traded company. Known in financial circles as combative and litigious, Mr. Lichtenstein buys large stakes in underperforming companies and agitates for change. Among his holdings are WebBank, a Utah-based financial company, and the industrial business Handy & Harman.

This is the second time this year that Mr. Lichtenstein, a native of Great Neck, N.Y., on Long Island, has appeared in the press because of his personal life. The gossip papers were recently filled with rumors that he was dating the reality television personality and entrepreneur Bethenny Frankel, who is in the middle of a messy public divorce. The two are old friends and not romantically involved, a person briefed on with the matter said.

Mr. Lichtenstein’s courtroom adversary, Mr. Cader, 54, started his career as a floor broker on the New York Stock Exchange for Spear, Leeds & Kellogg. In 1997, he took over as co-chief executive of the firm and earned hundreds of millions of dollars when Goldman Sachs acquired Spear Leeds for about $6.5 billion in 2000.

(A skilled musician, Mr. Cader moonlighted as a percussionist while trading, and has a credit for playing rub-board on the 1985 Talking Heads album, “Little Creatures.”)

He and several of his former Spear Leeds colleagues bought the Rays in 2004. Though some of them play an active role in the team’s management, Mr. Cader has a small, passive stake. Mr. Cader, who has a child from a previous marriage, owns a jet, a Dassault Falcon 50, which he uses to travel among homes in Hong Kong, Aspen and Mount Kisco, N.Y. He, too, knows Ms. Bond from Aspen.

Around the time they met, Ms. Bond became locked in a legal dispute with Mr. Lichtenstein over the support of their daughter. The dispute took an ugly turn, according to the lawsuit, when Ms. Bond moved with their daughter to Hong Kong â€" “a jurisdiction that was half a world away,” according to the complaint.

Mr. Lichtenstein says he then learned that Ms. Bond and their daughter had moved into a home in Hong Kong’s upscale Strawberry Hill neighborhood. Mr. Cader was renting the home for $26,000 a month and structured it as a loan to Ms. Bond, she told Mr. Lichtenstein â€" and more than $3.5 million in cash was also described as a loan, according to the complaint.

“These representations are false,” the complaint says. “The cash gifts and lease payments from Mr. Cader â€" who on information and belief has a net worth of hundreds of millions of dollars â€" were gifts to his longtime paramour, Ms. Bond.”

Mr. Lichtenstein argues that the Hong Kong court relied on Ms. Bond’s lies in awarding her $41,800 a month in child support, plus school, tutoring, medical, travel and other substantial expenses. That amount, Mr. Lichtenstein claims, “is one of the largest â€" if not the largest â€" child support ever issued by a Hong Kong court.”

He did not name Ms. Bond, a resident of Hong Kong, as a defendant, but took aim at her dating history. “Ms. Bond has gone from one millionaire lover to another,” the complaint says, “spending millions of dollars of their money to support her lavish lifestyle, and has then moved on to her next wealthy lover or lovers to support her and finance her litigation efforts.”

According to her Web site, in 2005 Ms. Bond became the fastest woman and the fourth-fastest person ever to reach all “seven summits,” the highest peaks on each continent, having accomplished the feat in less than a year.

She has given talks at numerous Wall Street firms about her climbing exploits, including Morgan Stanley, Blackstone Group and Credit Suisse. On her Twitter feed on Thursday, she made no mention of the lawsuit, but posted a photo of herself at the top of Mount Everest.

“Nearly my summit of Everest anniversary,” she wrote. “My respects to the mother goddess.”

Businesses Take a Wary Approach to Disclosures Using Social Media

Zynga’s latest quarterly earnings report, released on Wednesday, came in the typical format and was accompanied with the usual financial tables investors expect.

But the social gaming company that counts FarmVille among its games included a new addition: a 204-word paragraph encouraging investors to check its corporate blog and Facebook and Twitter pages for regular news updates.

It was just one of dozens of companies taking advantage of newly clarified rules from the Securities and Exchange Commission that have now blessed the use of social media sites to disclose financial information.

Although social networks have proliferated for years and the public more readily turns to Twitter than the S.E.C.’s Edgar Web portal for updates, the agency just a few months ago was still evaluating whether using newer outlets would violate its rules.

Even with the updated guidelines, uncertainty over what exactly the commission will allow has meant that many companies, and their legal teams, are playing it safe this earnings season.

“Right now it’s like the Wild West,” said Broc Romanek, editor of TheCorporateCounsel.net, a Web site that focuses on S.E.C. rules and regulations. “The S.E.C.’s guidance is definitely going to need to be further refined.”

For instance, when General Electric released its earnings last Friday, the company mentioned its Twitter and Facebook accounts for the first time, noting that they “contain a significant amount of information about G.E., including financial and other information for investors.” A quick check showed that G.E. has at least 10 different Facebook pages and 10 different Twitter feeds. A company spokesman, Seth Martin, however, said th conglomerate would continue to rely on news releases to communicate material information.

“While we currently have no plans to disseminate material information using social media, we will comply with S.E.C. guidance as it evolves,” Mr. Martin said.
Others may simply be hesitant to leap into the world of 140-character messages out of fear of security. Earlier this week, the Dow Jones industrial average briefly plunged 150 points after hackers gained control of The Associated Press’s Twitter feed and falsely reported explosions at the White House. A similar fake report on a company stock could easily cost investors billions in a matter of seconds.

Not long ago, regulators regarded social media sites with skepticism.

Until now, information that has the potential to affect a company’s stock price had for the most part been relegated to the bureaucratic sounding form 8-K, the S.E.C.’s document of choice.

Last year, the S.E.C. warned Netflix that it might file civil claims after its chief executive, Reed Hastings, bragged about subscriber numbers on his Facebook page. But after the ensuing reaction against the agency’s view, the S.E.C. gave in a little, saying this month that social networks were acceptable news outlets â€" as long as shareholders knew which to check. The new rules update the S.E.C.’s Regulation Fair Disclosure, which requires companies to publish material information to all investors at the same time.

A spokesman for the agency, John Nester, argued that the new guidance on social media should not be too confusing, given how quickly companies adopted a 2008 rule that allowed the use of corporate Web sites in addition to S.E.C. filings.

“Companies were able to figure out how to use our guidance to disclose information on their Web sites, so there’s no reason they shouldn’t be able to do the same with social media,” he said in a statement.

In practice, corporations are experimenting with a wide variety of policies. In its earnings release last week, AutoNation listed five different places where investors could find information about the company, including the Facebook and Twitter feeds of its chief executive, Mike Jackson.

Netflix itself listed in a securities filing five different places where investors should check regularly for more information. Among them: its corporate blog and Twitter feed, as well as the chief executive’s personal Facebook page.

Glen Ponczak, a vice president for investor relations, at the manufacturer Johnson Controls, said that the company had started posting information on Twitter several weeks before the S.E.C. outlined its new policy on social media, but that it was very much in experimental mode. On Twitter, the company posted a link to its earnings call, but did not post any updates from the earnings call.

“We’re starting off slow and learning what we need to do,” Mr. Ponczak said. At least for now, he added, “it will not be our primary disclosure point.”

Lawyers who focus on disclosure issues expect a bit of experimentation, and heavier use by technology companies whose business models are already heavily dependent on social media.

“The S.E.C. is not going to let companies be sloppy,” Thomas A. Sporkin, a former S.E.C. enforcement official and now a partner at Buckley Sandler, said. “The investing public needs to know where to go for disclosures, and the division of enforcement is going to be vigilant on this.”

And for some legal teams, the old formats of S.E.C. filings will still likely be the preferred method of disseminating financial news.

“Most companies are going to use social media as a supplement,” said Amy Goodman, a partner and co-chairwoman of the securities regulation and corporate practice group at the law firm Gibson Dunn & Crutcher.

“You can’t go wrong if you file an 8-K. That’s your insurance policy.”

Boutique Vintners Turn to Private Equity for Help

When Ed Sbragia started Sbragia Family Vineyards, it was an accomplishment that was nearly a century in the making.

His grandfather moved from Italy to California in 1904 to work in the wineries just north of San Francisco. In the 1940s, Mr. Sbragia’s father bought property in the Dry Creek Valley near Healdsburg and planted zinfandel grapes, which he sold to local winemakers and used for his own home wine.

Mr. Sbragia, 64, got his start in the wine business at Beringer Vineyards, one of Napa Valley’s oldest, and worked his way up to become one of the most decorated winemakers in the region.

He teamed up with his son Adam in 2002 to make limited lots of wine sourced primarily from the family property. When a small vineyard and facility 10 miles up the road went on the market in 2006, it was an opportunity he could not pass up.

“All of a sudden a little project became a bigger project,” said Mr. Sbragia, who stepped down from his full-time position at Beringer in 2008.

After the recession, however, Mr. Sbragia was at an impasse. His wine had been well received â€" selling out quickly in fact â€" but he faced a laundry list of expenses and few good options for financing them. He needed to buy more grapes, revamp his tasting room and replace his aging French oak barrels, at a cost of $1,000 each.

Meanwhile, Mr. Sbragia needed help with various aspects of the business. Finance, distribution, marketing and sales “are not my expertise,” he said. “I make wine.”

In 2011, he found an unlikely partner in Bacchus Capital Management, a private equity group co-founded by Sam Bronfman II, the grandson of Seagram’s founder. The firm, which has offices in New York and San Francisco, invests exclusively in wineries and wine-related businesses.

In 2007, it raised $40 million for its first fund, which is now nearly fully invested with $2 million to $7 million stakes in more than half a dozen West Coast wineries, including the racecar driver Mario Andretti’s Andretti Winery in Napa Valley and Wine by Joe in the Willamette Valley in Oregon. The firm is contemplating another fund, this time in the $100 million to $200 million range.

For many people, private equity conjures the image of ruthless financiers with a singular focus on profit. Bacchus Capital’s two other founding partners, Peter S. Kaufman and Henry F. Owsley, have done their share of hard-nosed restructuring deals through their boutique investment bank, the Gordian Group. The wine fund takes a much kinder approach.

“We’re big on the concept of partnering with talented entrepreneurial winemakers, who are faced with ‘how do I get my wines sold,’ ” said Mr. Bronfman, who was previously chairman of Diageo Global Wines and president of Seagram Chateau and Estate Wines. “We free up these incredibly talented winemakers to do what they do best.”

The idea for a private equity wine fund was born when Mr. Bronfman, 59, left Diageo in 2003 and set out to create his own portfolio of premium wineries. For help, he turned to Mr. Kaufman, an expert in mergers and acquisitions and a friend since childhood.

“He can go in and get a feel for these winemakers from a totally different perspective than someone from the wine business,” Mr. Bronfman said.

It was Mr. Kaufman’s partner, Mr. Owsley, who suggested they start a wine fund that would offer debt financing in addition to private equity.

The fund initially got off to a slow start on the equity side. Before the financial crisis, valuations for premier wineries “were more than we could stomach,” Mr. Kaufman said. Wineries were selling for the equivalent of 12 to 15 times trailing Ebida (earnings before interest, depreciation and amortization). Today, valuations have fallen, while there is still a dearth of capital.

“Unless you’re a Mondavi with huge enterprise brand value, banks are primarily lending on a formula,” Mr. Kaufman said. “If you’re not in their box, there’s no money.”

Yet for high-quality producers with the right distribution model, the fundamentals are sound, he said. Wine consumption in the United States has been steadily increasing for the last couple of decades, according to the Wine Market Council, and remained robust during the recession.

Bacchus Capital partners think there is still plenty of potential for growth, particularly when it comes to premium wines. Meanwhile, wineries that can improve their direct-to-consumer distribution through wine clubs and tasting room sales also have tremendous potential, Mr. Bronfman said. Although traditional distribution channels, like restaurants and retailers, are still critical, they can reduce margins by as much as a third, he noted.

“People laugh when they first hear we have a fund that invests in wineries,” Mr. Kaufman said. “A well-run high-end winery should have gross margins in the 60 percent range and Ebida margins in the 20 percent to 25 percent range.” To put that in perspective, he said, in traditional manufacturing “you’re lucky if you get Ebida margins of 10 percent.”

Convincing artisan vintners â€" wary of losing control â€" of the benefits of a private equity investment was initially a challenge. In addition to concerns about how the operation would change with outside investors, there was the question of exit strategy. “Each of these wineries is special; these are not widget factories,” Mr. Kaufman said. “There will be no one formula for exit.”

Joe Dobbes counted himself among the skeptics of private equity. Mr. Dobbes founded Wine by Joe in 2002 with $50,000 and managed to expand his winery in Dundee, Ore., into one of the largest in the state, producing 130,000 cases last year.

Meeting one of Bacchus’s managing directors at an industry event caused him to revise his impression of private equity. In 2011, he tested the waters with debt financing and then closed on an equity deal earlier this year.

“I felt I had taken the company as far as I personally could,” said Mr. Dobbes, who is, among other things, looking to expand his brand outside the Pacific Northwest and improve his direct-to-consumer sales.

While the infusion of capital certainly helps, perhaps a bigger factor was the reputation and expertise that come with the partnership. “I got with this a team of coaches who have been in the industry for years,” Mr. Dobbes said.

Less than two years after teaming up with Bacchus Capital, Mr. Sbragia is satisfied with the results. The partnership allowed him to bring in a general manager, industry veteran Steve Cousins, invest in new equipment and improve direct-to-consumer sales by 20 percent last year. He and his son are spending more time thinking about making wine and less time worrying about long-term budgets and marketing plans.

For Mr. Sbragia, sharing a stake in the winery was no easy decision.

“One thing I felt very strong about was that I had a group of people working for me and I needed to protect them,” said Mr. Sbragia, who spoke with more than a dozen individuals or entities about investing in the winery before teaming up with Bacchus.

“There were people who wanted 100 percent of the company and I would be a hired hand.”

While he would like to grow â€" last year he produced 16,000 cases and would like to increase that to 24,000 in the next couple of years â€" he doesn’t want to do so at the expense of the quality of the wine or his family’s legacy.

“We’re a family-owned Dry Creek winery and want to stay there,” he said.

Boutique Vintners Turn to Private Equity for Help

When Ed Sbragia started Sbragia Family Vineyards, it was an accomplishment that was nearly a century in the making.

His grandfather moved from Italy to California in 1904 to work in the wineries just north of San Francisco. In the 1940s, Mr. Sbragia’s father bought property in the Dry Creek Valley near Healdsburg and planted zinfandel grapes, which he sold to local winemakers and used for his own home wine.

Mr. Sbragia, 64, got his start in the wine business at Beringer Vineyards, one of Napa Valley’s oldest, and worked his way up to become one of the most decorated winemakers in the region.

He teamed up with his son Adam in 2002 to make limited lots of wine sourced primarily from the family property. When a small vineyard and facility 10 miles up the road went on the market in 2006, it was an opportunity he could not pass up.

“All of a sudden a little project became a bigger project,” said Mr. Sbragia, who stepped down from his full-time position at Beringer in 2008.

After the recession, however, Mr. Sbragia was at an impasse. His wine had been well received â€" selling out quickly in fact â€" but he faced a laundry list of expenses and few good options for financing them. He needed to buy more grapes, revamp his tasting room and replace his aging French oak barrels, at a cost of $1,000 each.

Meanwhile, Mr. Sbragia needed help with various aspects of the business. Finance, distribution, marketing and sales “are not my expertise,” he said. “I make wine.”

In 2011, he found an unlikely partner in Bacchus Capital Management, a private equity group co-founded by Sam Bronfman II, the grandson of Seagram’s founder. The firm, which has offices in New York and San Francisco, invests exclusively in wineries and wine-related businesses.

In 2007, it raised $40 million for its first fund, which is now nearly fully invested with $2 million to $7 million stakes in more than half a dozen West Coast wineries, including the racecar driver Mario Andretti’s Andretti Winery in Napa Valley and Wine by Joe in the Willamette Valley in Oregon. The firm is contemplating another fund, this time in the $100 million to $200 million range.

For many people, private equity conjures the image of ruthless financiers with a singular focus on profit. Bacchus Capital’s two other founding partners, Peter S. Kaufman and Henry F. Owsley, have done their share of hard-nosed restructuring deals through their boutique investment bank, the Gordian Group. The wine fund takes a much kinder approach.

“We’re big on the concept of partnering with talented entrepreneurial winemakers, who are faced with ‘how do I get my wines sold,’ ” said Mr. Bronfman, who was previously chairman of Diageo Global Wines and president of Seagram Chateau and Estate Wines. “We free up these incredibly talented winemakers to do what they do best.”

The idea for a private equity wine fund was born when Mr. Bronfman, 59, left Diageo in 2003 and set out to create his own portfolio of premium wineries. For help, he turned to Mr. Kaufman, an expert in mergers and acquisitions and a friend since childhood.

“He can go in and get a feel for these winemakers from a totally different perspective than someone from the wine business,” Mr. Bronfman said.

It was Mr. Kaufman’s partner, Mr. Owsley, who suggested they start a wine fund that would offer debt financing in addition to private equity.

The fund initially got off to a slow start on the equity side. Before the financial crisis, valuations for premier wineries “were more than we could stomach,” Mr. Kaufman said. Wineries were selling for the equivalent of 12 to 15 times trailing Ebida (earnings before interest, depreciation and amortization). Today, valuations have fallen, while there is still a dearth of capital.

“Unless you’re a Mondavi with huge enterprise brand value, banks are primarily lending on a formula,” Mr. Kaufman said. “If you’re not in their box, there’s no money.”

Yet for high-quality producers with the right distribution model, the fundamentals are sound, he said. Wine consumption in the United States has been steadily increasing for the last couple of decades, according to the Wine Market Council, and remained robust during the recession.

Bacchus Capital partners think there is still plenty of potential for growth, particularly when it comes to premium wines. Meanwhile, wineries that can improve their direct-to-consumer distribution through wine clubs and tasting room sales also have tremendous potential, Mr. Bronfman said. Although traditional distribution channels, like restaurants and retailers, are still critical, they can reduce margins by as much as a third, he noted.

“People laugh when they first hear we have a fund that invests in wineries,” Mr. Kaufman said. “A well-run high-end winery should have gross margins in the 60 percent range and Ebida margins in the 20 percent to 25 percent range.” To put that in perspective, he said, in traditional manufacturing “you’re lucky if you get Ebida margins of 10 percent.”

Convincing artisan vintners â€" wary of losing control â€" of the benefits of a private equity investment was initially a challenge. In addition to concerns about how the operation would change with outside investors, there was the question of exit strategy. “Each of these wineries is special; these are not widget factories,” Mr. Kaufman said. “There will be no one formula for exit.”

Joe Dobbes counted himself among the skeptics of private equity. Mr. Dobbes founded Wine by Joe in 2002 with $50,000 and managed to expand his winery in Dundee, Ore., into one of the largest in the state, producing 130,000 cases last year.

Meeting one of Bacchus’s managing directors at an industry event caused him to revise his impression of private equity. In 2011, he tested the waters with debt financing and then closed on an equity deal earlier this year.

“I felt I had taken the company as far as I personally could,” said Mr. Dobbes, who is, among other things, looking to expand his brand outside the Pacific Northwest and improve his direct-to-consumer sales.

While the infusion of capital certainly helps, perhaps a bigger factor was the reputation and expertise that come with the partnership. “I got with this a team of coaches who have been in the industry for years,” Mr. Dobbes said.

Less than two years after teaming up with Bacchus Capital, Mr. Sbragia is satisfied with the results. The partnership allowed him to bring in a general manager, industry veteran Steve Cousins, invest in new equipment and improve direct-to-consumer sales by 20 percent last year. He and his son are spending more time thinking about making wine and less time worrying about long-term budgets and marketing plans.

For Mr. Sbragia, sharing a stake in the winery was no easy decision.

“One thing I felt very strong about was that I had a group of people working for me and I needed to protect them,” said Mr. Sbragia, who spoke with more than a dozen individuals or entities about investing in the winery before teaming up with Bacchus.

“There were people who wanted 100 percent of the company and I would be a hired hand.”

While he would like to grow â€" last year he produced 16,000 cases and would like to increase that to 24,000 in the next couple of years â€" he doesn’t want to do so at the expense of the quality of the wine or his family’s legacy.

“We’re a family-owned Dry Creek winery and want to stay there,” he said.

Boutique Vintners Turn to Private Equity for Help

When Ed Sbragia started Sbragia Family Vineyards, it was an accomplishment that was nearly a century in the making.

His grandfather moved from Italy to California in 1904 to work in the wineries just north of San Francisco. In the 1940s, Mr. Sbragia’s father bought property in the Dry Creek Valley near Healdsburg and planted zinfandel grapes, which he sold to local winemakers and used for his own home wine.

Mr. Sbragia, 64, got his start in the wine business at Beringer Vineyards, one of Napa Valley’s oldest, and worked his way up to become one of the most decorated winemakers in the region.

He teamed up with his son Adam in 2002 to make limited lots of wine sourced primarily from the family property. When a small vineyard and facility 10 miles up the road went on the market in 2006, it was an opportunity he could not pass up.

“All of a sudden a little project became a bigger project,” said Mr. Sbragia, who stepped down from his full-time position at Beringer in 2008.

After the recession, however, Mr. Sbragia was at an impasse. His wine had been well received â€" selling out quickly in fact â€" but he faced a laundry list of expenses and few good options for financing them. He needed to buy more grapes, revamp his tasting room and replace his aging French oak barrels, at a cost of $1,000 each.

Meanwhile, Mr. Sbragia needed help with various aspects of the business. Finance, distribution, marketing and sales “are not my expertise,” he said. “I make wine.”

In 2011, he found an unlikely partner in Bacchus Capital Management, a private equity group co-founded by Sam Bronfman II, the grandson of Seagram’s founder. The firm, which has offices in New York and San Francisco, invests exclusively in wineries and wine-related businesses.

In 2007, it raised $40 million for its first fund, which is now nearly fully invested with $2 million to $7 million stakes in more than half a dozen West Coast wineries, including the racecar driver Mario Andretti’s Andretti Winery in Napa Valley and Wine by Joe in the Willamette Valley in Oregon. The firm is contemplating another fund, this time in the $100 million to $200 million range.

For many people, private equity conjures the image of ruthless financiers with a singular focus on profit. Bacchus Capital’s two other founding partners, Peter S. Kaufman and Henry F. Owsley, have done their share of hard-nosed restructuring deals through their boutique investment bank, the Gordian Group. The wine fund takes a much kinder approach.

“We’re big on the concept of partnering with talented entrepreneurial winemakers, who are faced with ‘how do I get my wines sold,’ ” said Mr. Bronfman, who was previously chairman of Diageo Global Wines and president of Seagram Chateau and Estate Wines. “We free up these incredibly talented winemakers to do what they do best.”

The idea for a private equity wine fund was born when Mr. Bronfman, 59, left Diageo in 2003 and set out to create his own portfolio of premium wineries. For help, he turned to Mr. Kaufman, an expert in mergers and acquisitions and a friend since childhood.

“He can go in and get a feel for these winemakers from a totally different perspective than someone from the wine business,” Mr. Bronfman said.

It was Mr. Kaufman’s partner, Mr. Owsley, who suggested they start a wine fund that would offer debt financing in addition to private equity.

The fund initially got off to a slow start on the equity side. Before the financial crisis, valuations for premier wineries “were more than we could stomach,” Mr. Kaufman said. Wineries were selling for the equivalent of 12 to 15 times trailing Ebida (earnings before interest, depreciation and amortization). Today, valuations have fallen, while there is still a dearth of capital.

“Unless you’re a Mondavi with huge enterprise brand value, banks are primarily lending on a formula,” Mr. Kaufman said. “If you’re not in their box, there’s no money.”

Yet for high-quality producers with the right distribution model, the fundamentals are sound, he said. Wine consumption in the United States has been steadily increasing for the last couple of decades, according to the Wine Market Council, and remained robust during the recession.

Bacchus Capital partners think there is still plenty of potential for growth, particularly when it comes to premium wines. Meanwhile, wineries that can improve their direct-to-consumer distribution through wine clubs and tasting room sales also have tremendous potential, Mr. Bronfman said. Although traditional distribution channels, like restaurants and retailers, are still critical, they can reduce margins by as much as a third, he noted.

“People laugh when they first hear we have a fund that invests in wineries,” Mr. Kaufman said. “A well-run high-end winery should have gross margins in the 60 percent range and Ebida margins in the 20 percent to 25 percent range.” To put that in perspective, he said, in traditional manufacturing “you’re lucky if you get Ebida margins of 10 percent.”

Convincing artisan vintners â€" wary of losing control â€" of the benefits of a private equity investment was initially a challenge. In addition to concerns about how the operation would change with outside investors, there was the question of exit strategy. “Each of these wineries is special; these are not widget factories,” Mr. Kaufman said. “There will be no one formula for exit.”

Joe Dobbes counted himself among the skeptics of private equity. Mr. Dobbes founded Wine by Joe in 2002 with $50,000 and managed to expand his winery in Dundee, Ore., into one of the largest in the state, producing 130,000 cases last year.

Meeting one of Bacchus’s managing directors at an industry event caused him to revise his impression of private equity. In 2011, he tested the waters with debt financing and then closed on an equity deal earlier this year.

“I felt I had taken the company as far as I personally could,” said Mr. Dobbes, who is, among other things, looking to expand his brand outside the Pacific Northwest and improve his direct-to-consumer sales.

While the infusion of capital certainly helps, perhaps a bigger factor was the reputation and expertise that come with the partnership. “I got with this a team of coaches who have been in the industry for years,” Mr. Dobbes said.

Less than two years after teaming up with Bacchus Capital, Mr. Sbragia is satisfied with the results. The partnership allowed him to bring in a general manager, industry veteran Steve Cousins, invest in new equipment and improve direct-to-consumer sales by 20 percent last year. He and his son are spending more time thinking about making wine and less time worrying about long-term budgets and marketing plans.

For Mr. Sbragia, sharing a stake in the winery was no easy decision.

“One thing I felt very strong about was that I had a group of people working for me and I needed to protect them,” said Mr. Sbragia, who spoke with more than a dozen individuals or entities about investing in the winery before teaming up with Bacchus.

“There were people who wanted 100 percent of the company and I would be a hired hand.”

While he would like to grow â€" last year he produced 16,000 cases and would like to increase that to 24,000 in the next couple of years â€" he doesn’t want to do so at the expense of the quality of the wine or his family’s legacy.

“We’re a family-owned Dry Creek winery and want to stay there,” he said.

Boutique Vintners Turn to Private Equity for Help

When Ed Sbragia started Sbragia Family Vineyards, it was an accomplishment that was nearly a century in the making.

His grandfather moved from Italy to California in 1904 to work in the wineries just north of San Francisco. In the 1940s, Mr. Sbragia’s father bought property in the Dry Creek Valley near Healdsburg and planted zinfandel grapes, which he sold to local winemakers and used for his own home wine.

Mr. Sbragia, 64, got his start in the wine business at Beringer Vineyards, one of Napa Valley’s oldest, and worked his way up to become one of the most decorated winemakers in the region.

He teamed up with his son Adam in 2002 to make limited lots of wine sourced primarily from the family property. When a small vineyard and facility 10 miles up the road went on the market in 2006, it was an opportunity he could not pass up.

“All of a sudden a little project became a bigger project,” said Mr. Sbragia, who stepped down from his full-time position at Beringer in 2008.

After the recession, however, Mr. Sbragia was at an impasse. His wine had been well received â€" selling out quickly in fact â€" but he faced a laundry list of expenses and few good options for financing them. He needed to buy more grapes, revamp his tasting room and replace his aging French oak barrels, at a cost of $1,000 each.

Meanwhile, Mr. Sbragia needed help with various aspects of the business. Finance, distribution, marketing and sales “are not my expertise,” he said. “I make wine.”

In 2011, he found an unlikely partner in Bacchus Capital Management, a private equity group co-founded by Sam Bronfman II, the grandson of Seagram’s founder. The firm, which has offices in New York and San Francisco, invests exclusively in wineries and wine-related businesses.

In 2007, it raised $40 million for its first fund, which is now nearly fully invested with $2 million to $7 million stakes in more than half a dozen West Coast wineries, including the racecar driver Mario Andretti’s Andretti Winery in Napa Valley and Wine by Joe in the Willamette Valley in Oregon. The firm is contemplating another fund, this time in the $100 million to $200 million range.

For many people, private equity conjures the image of ruthless financiers with a singular focus on profit. Bacchus Capital’s two other founding partners, Peter S. Kaufman and Henry F. Owsley, have done their share of hard-nosed restructuring deals through their boutique investment bank, the Gordian Group. The wine fund takes a much kinder approach.

“We’re big on the concept of partnering with talented entrepreneurial winemakers, who are faced with ‘how do I get my wines sold,’ ” said Mr. Bronfman, who was previously chairman of Diageo Global Wines and president of Seagram Chateau and Estate Wines. “We free up these incredibly talented winemakers to do what they do best.”

The idea for a private equity wine fund was born when Mr. Bronfman, 59, left Diageo in 2003 and set out to create his own portfolio of premium wineries. For help, he turned to Mr. Kaufman, an expert in mergers and acquisitions and a friend since childhood.

“He can go in and get a feel for these winemakers from a totally different perspective than someone from the wine business,” Mr. Bronfman said.

It was Mr. Kaufman’s partner, Mr. Owsley, who suggested they start a wine fund that would offer debt financing in addition to private equity.

The fund initially got off to a slow start on the equity side. Before the financial crisis, valuations for premier wineries “were more than we could stomach,” Mr. Kaufman said. Wineries were selling for the equivalent of 12 to 15 times trailing Ebida (earnings before interest, depreciation and amortization). Today, valuations have fallen, while there is still a dearth of capital.

“Unless you’re a Mondavi with huge enterprise brand value, banks are primarily lending on a formula,” Mr. Kaufman said. “If you’re not in their box, there’s no money.”

Yet for high-quality producers with the right distribution model, the fundamentals are sound, he said. Wine consumption in the United States has been steadily increasing for the last couple of decades, according to the Wine Market Council, and remained robust during the recession.

Bacchus Capital partners think there is still plenty of potential for growth, particularly when it comes to premium wines. Meanwhile, wineries that can improve their direct-to-consumer distribution through wine clubs and tasting room sales also have tremendous potential, Mr. Bronfman said. Although traditional distribution channels, like restaurants and retailers, are still critical, they can reduce margins by as much as a third, he noted.

“People laugh when they first hear we have a fund that invests in wineries,” Mr. Kaufman said. “A well-run high-end winery should have gross margins in the 60 percent range and Ebida margins in the 20 percent to 25 percent range.” To put that in perspective, he said, in traditional manufacturing “you’re lucky if you get Ebida margins of 10 percent.”

Convincing artisan vintners â€" wary of losing control â€" of the benefits of a private equity investment was initially a challenge. In addition to concerns about how the operation would change with outside investors, there was the question of exit strategy. “Each of these wineries is special; these are not widget factories,” Mr. Kaufman said. “There will be no one formula for exit.”

Joe Dobbes counted himself among the skeptics of private equity. Mr. Dobbes founded Wine by Joe in 2002 with $50,000 and managed to expand his winery in Dundee, Ore., into one of the largest in the state, producing 130,000 cases last year.

Meeting one of Bacchus’s managing directors at an industry event caused him to revise his impression of private equity. In 2011, he tested the waters with debt financing and then closed on an equity deal earlier this year.

“I felt I had taken the company as far as I personally could,” said Mr. Dobbes, who is, among other things, looking to expand his brand outside the Pacific Northwest and improve his direct-to-consumer sales.

While the infusion of capital certainly helps, perhaps a bigger factor was the reputation and expertise that come with the partnership. “I got with this a team of coaches who have been in the industry for years,” Mr. Dobbes said.

Less than two years after teaming up with Bacchus Capital, Mr. Sbragia is satisfied with the results. The partnership allowed him to bring in a general manager, industry veteran Steve Cousins, invest in new equipment and improve direct-to-consumer sales by 20 percent last year. He and his son are spending more time thinking about making wine and less time worrying about long-term budgets and marketing plans.

For Mr. Sbragia, sharing a stake in the winery was no easy decision.

“One thing I felt very strong about was that I had a group of people working for me and I needed to protect them,” said Mr. Sbragia, who spoke with more than a dozen individuals or entities about investing in the winery before teaming up with Bacchus.

“There were people who wanted 100 percent of the company and I would be a hired hand.”

While he would like to grow â€" last year he produced 16,000 cases and would like to increase that to 24,000 in the next couple of years â€" he doesn’t want to do so at the expense of the quality of the wine or his family’s legacy.

“We’re a family-owned Dry Creek winery and want to stay there,” he said.

Brazil Insurer Prices Biggest I.P.O. of the Year

BB Seguridade, the biggest insurance company in Latin America, raised $5.74 billion late Thursday in the largest initial public offering in the world so far this year.

The shares were priced at 17 reais each â€" within the range of 15 to 18 reais expected in the offering’s prospectus. The company is selling 675 million shares, or about a third of its total capital.

The share total includes a 175 million shares in additional and supplementary lots, whose sale will be finalized on May 28.

If all those shares were sold, it would be the second-largest I.P.O. in Brazil’s history, after Banco Santander Brasil’s $8 billion offering in 2009.

BB Seguridade’s shares will begin trading Monday on the Bovespa, the São Paulo stock exchange.

The deal occurred two days later than originally planned, as the CVM, Brazil’s securities regulator, required a delay because of irregularities in publicity documents earlier this month.

BB Seguridade has 16.5 percent of Brazil’s insurance market and operations in many other South American countries, mostly through its subsidiary Mapfre.

The money raised in the I.P.O. will go to BB Seguridade’s parent, the government-controlled Banco do Brasil, which still owns 70 percent of the company.

Banco do Brasil is already the largest financial institution in Latin America, and the capital raised in the offering should permit it to grow further through acquisitions.

Indeed, according to the I.P.O. prospectus, BB Seguridade is planning to accompany Banco do Brasil “in expanding its activities outside of Brazil, with a focus on Latin America… either through strategic partnerships or acquisitions.”

Banco do Brasil’s investment bank, BB Investimentos, was the lead underwriter for the offering, with JPMorgan Chase, Bradesco BBI, Itaú BBA, BTG Pactual, Citigroup, Brasil Plural, and Banco Votorantim also involved,

Brazil’s I.P.O. market was mostly dormant last year, with only three companies going public. The investment bank BTG Pactual raised $1.9 billion last April, but it did not pave the way for further big deals as local investment bankers had hoped.

This year is already proving to be a more robust market.

Besides BB Seguridade, the software companies Linx and Senior Solution, the sugar-cane processor Biosev, the electricity company Alupar and the airline Gol’s frequent-flyer program Smiles have held offerings this year, though these deals been well under $1 billion.

Another megadeal is waiting in the wings, however.

Votorantim Cimentos, Brazil’s largest cement producer, has filed documents for an I.P.O. that could raise as much as $5.4 billion through selling both shares in São Paulo and American depositary receipts in New York.

New York Seeks to Press Trial of Former A.I.G. Chief

To pursue its civil fraud case against the American International Group‘s former chief executive, Maurice R. Greenberg, the New York attorney general’s office is taking an unusual step.

It is giving up right to contest Mr. Greenberg’s $115 million settlement of a separate class-action lawsuit â€" and the right to win up to $6 billion worth of cash damages in its own legal action â€" to help expedite a trial that would put the former A.I.G. executive on the stand.

In a letter to a state court judge sent on Thursday, the office of the attorney general, Eric  Schneiderman, wrote that it would continue to seek punishments against Mr. Greenberg, including a ban from the securities industry and on serving as a director or officer of a publicly traded company.

The move is meant to finally bring the eight-year-old case against Mr. Greenberg and a former A.I.G. chief financial officer, Howard Smith, to trial. The legal battle, rooted in accusations that the insurer committed accounting fraud that led to a $3.9 billion restatement in 2005, has been carried out by Mr. Schneiderman and two of his predecessors: Eliot L. Spitzer and Andrew Cuomo.

The actions by A.I.G. at the heart of the two legal actions predate the insurer’s $182 billion taxpayer-financed bailout in the fall of 2008.

But the case faced a blow earlier this month when Mr. Greenberg and other defendants agreed to pay $115 million to settle the class-action lawsuit filed by A.I.G. investors. The federal court judge overseeing that battle approved the settlement on April 10, describing it as fair.

Other defendants had already settled the investor lawsuits; A.I.G. itself paid about $725 million last year.

The attorney general argued in a court filing late last year that a settlement of the class-action lawsuit would still allow him to pursue his case.

But lawyers for Mr. Greenberg have argued that the latest settlement effectively wipes out what they contend are duplicative claims that Mr. Schneiderman had been pursuing in his lawsuit.

They are pursuing a motion for summary judgment that would dismiss the attorney general’s claims, and have argued that a separate settlement with the Securities and Exchange Commission already included injunctive relief.

Rather than being tied up in a court fight over pursuing cash damages that Mr. Schneiderman was unlikely to win, he will instead be free to focus on forcing the former A.I.G. chief to testify, according to people briefed on the matter.

The attorney general has viewed putting the former A.I.G. chief on the witness stand as more important than securing additional money on top of the class-action lawsuit.

“Attorney General Schneiderman feels strongly that individuals in the financial services industry who perpetrate fraud, no matter how wealthy or powerful, must be held publicly accountable,” Damien LaVera, a spokesman for Mr. Schneiderman, said in a statement.

“And that is why we believe justice will best be served by proceeding to a long overdue trial of Mr. Greenberg as quickly as possible.”

A representative for Mr. Greenberg did not have an immediate comment on the filing.

Banks Urged to Put Limits on Payday-Style Loans

Federal regulators on Thursday admonished some of the nation’s largest banks for offering payday-style loans, short-term costly credit tied to customers’ checking accounts.

The guidance from the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation urged the banks, including Wells Fargo and U.S. Bank, to ensure that borrowers can repay the loans, which otherwise can mire customers in debt and result in a slew of fees.

Banks offer the loans linked to checking accounts with the understanding that the lender automatically withdraws the full cost of the loan when it is due. Factoring in fees, the loans, called deposit advances, can come with interest rates that exceed 300 percent.

The moves on Thursday come as state and federal officials ratchet up their efforts to clamp down on payday lending at storefronts and at large banks. Across the nation, 15 states impose strict interest caps on the loans, effectively banishing payday lenders.

On Wednesday, the Consumer Financial Protection Bureau, which has been examining the loans, issued a report that found the payday and direct-deposit loans can quickly morph from short-term credit into a seemingly unending burden for low-income customers. “For too many consumers, payday and deposit advance loans are debt traps,” Richard Cordray, the agency’s director, said in a statement when the report was issued.

Lawmakers are joining the battle against the high-cost loans. In July, Senator Jeff Merkley, Democrat of Oregon introduced a bill to rein in the payday loans. One critical element of the legislation pending in Congress would force lenders to abide by usury caps in the states where borrowers live rather than where the lenders are based.

The crackdown on payday loans is an issue that has gained urgency after feckless mortgage lending helped hasten the 2008 financial crisis that left millions of homeowners struggling to stave off foreclosure.
In its latest guidance, the comptroller said that it would begin scrutinizing the deposit-advance programs during its routine bank examinations. As part of that oversight, the agency said it would look at whether banks are doing more robust underwriting. Before allowing a customer to borrow against a checking account, banks should consider whether customers have a range of income sources to repay the debt, the comptroller said.

“Failure to consider whether the income sources are adequate to repay the debt while covering typical living expenses, other debt payments, and the borrower’s credit history presents safety and soundness risks,” the comptroller’s guidance said.

To ensure that the loans don’t ensnare borrowers in debt,the comptroller said, banks should also monitor how often customers take out the loans. The comptroller also proposed that banks institute more stringent “cooling-off” periods that bar customers from taking out loans in quick succession.

“Deposit advance loans that have been accessed repeatedly or for extended periods of time are evidence of ‘churning’ and inadequate underwriting,” the comptroller noted. Churning, the agency said, resembled “loan flipping” where lenders aggressively encouraged homeowners to refinance their mortgagesâ€"a practice that generated rich fee income for the banks but little benefit for homeowners.

Alongside the guidance, the comptroller included a scathing assessment of the loans and warned banks that the loans could pose “reputational risk.”

Last May, the F.D.I.C. said the agency was “deeply concerned” about payday lending. The comptroller’s office said in June 2011 that the loans increased “operational and credit risks and supervisory concerns.”

The Federal Reserve, though, was notably gentler with the banks on Thursday. While the agency did issue some guidance in a three-page letter to banks that said the deposit loans could precipitate “consumer harm,” the agencies guidance lacked the specificity of that of the comptroller.

For low-income consumers, the loans can result in a wave of overdraft charges and fees for borrowers already in a precarious financial position. Borrowers who take out payday loans are roughly two times as likely to be hit with overdraft fees, according to a March report by the Center for Responsible Lending, an advocacy group.

Soros Takes Big Stake in J.C. Penney

J.C. Penney doesn’t have many fans on Wall Street. But a big one emerged on Thursday: George Soros.

The billionaire hedge fund manager disclosed a 7.9 percent stake in the embattled retailer, with 17.4 million J.C. Penney shares, according to a securities filing. The stake is passive, meaning Mr. Soros will not attempt to exert influence.

Penney’s shares rose nearly 7 percent in trading after hours. The stock was up 0.3 percent during the day.

Mr. Soros is at least the second prominent hedge fund manager to take a shine to Penney, whose chief executive, Ron Johnson, was ousted in April after 17 challenging months on the job.

William A. Ackman, the head of Pershing Square Capital Management, also has a sizable stake. Penney’s shares fell more than 50 percent during the tenure of Mr. Johnson, a former Apple executive whom Mr. Ackman supported.

Mr. Johnson brought fresh ideas to Penney, trying to attract a new type of shopper. But those failed to improve the company’s sales. In Feburary, Mr. Johnson admitted he made “big mistakes” in his turnaround effort, as the company reported a $552 million quarterly loss.

Soros Takes Big Stake in J.C. Penney

J.C. Penney doesn’t have many fans on Wall Street. But a big one emerged on Thursday: George Soros.

The billionaire hedge fund manager disclosed a 7.9 percent stake in the embattled retailer, with 17.4 million J.C. Penney shares, according to a securities filing. The stake is passive, meaning Mr. Soros will not attempt to exert influence.

Penney’s shares rose nearly 7 percent in trading after hours. The stock was up 0.3 percent during the day.

Mr. Soros is at least the second prominent hedge fund manager to take a shine to Penney, whose chief executive, Ron Johnson, was ousted in April after 17 challenging months on the job.

William A. Ackman, the head of Pershing Square Capital Management, also has a sizable stake. Penney’s shares fell more than 50 percent during the tenure of Mr. Johnson, a former Apple executive whom Mr. Ackman supported.

Mr. Johnson brought fresh ideas to Penney, trying to attract a new type of shopper. But those failed to improve the company’s sales. In Feburary, Mr. Johnson admitted he made “big mistakes” in his turnaround effort, as the company reported a $552 million quarterly loss.

Soros Takes Big Stake in J.C. Penney

J.C. Penney doesn’t have many fans on Wall Street. But a big one emerged on Thursday: George Soros.

The billionaire hedge fund manager disclosed a 7.9 percent stake in the embattled retailer, with 17.4 million J.C. Penney shares, according to a securities filing. The stake is passive, meaning Mr. Soros will not attempt to exert influence.

Penney’s shares rose nearly 7 percent in trading after hours. The stock was up 0.3 percent during the day.

Mr. Soros is at least the second prominent hedge fund manager to take a shine to Penney, whose chief executive, Ron Johnson, was ousted in April after 17 challenging months on the job.

William A. Ackman, the head of Pershing Square Capital Management, also has a sizable stake. Penney’s shares fell more than 50 percent during the tenure of Mr. Johnson, a former Apple executive whom Mr. Ackman supported.

Mr. Johnson brought fresh ideas to Penney, trying to attract a new type of shopper. But those failed to improve the company’s sales. In Feburary, Mr. Johnson admitted he made “big mistakes” in his turnaround effort, as the company reported a $552 million quarterly loss.

Typing, Made Easy

When I reviewed the BlackBerry Z10 in January, I wrote that it was a surprisingly complete, elegant, attractive phone, considering that the company was on its deathbed. (The BlackBerry’s share of the smartphone market was a dismal 2.9 percent, down from 85 percent a few years ago.)

The key benefits of the Z10:

• Swappable battery
• Memory-card slot for expansion
• Over 100,000 apps in its app store
• Clever word-completion system
• Ingenious BlackBerry Hub: a single in-box for everything (calls, texts, e-mail, Twitter and Facebook posts) that’s always available with a swipe in from the left side
• Separate on-screen “worlds” for work and personal use
• 80 million BlackBerry fans already

I’m still not sure that the Z10 will save BlackBerry. It’s awfully late, and its offerings aren’t so much more advanced than iPhone or Android that the masses are likely to risk betting on this dark horse.

But next month, BlackBerry will improve its odds by offering the Q10 (around $250 with contract). It’s a sister phone to the Z10, with all the same advantages. But instead of a full-height touch screen, this one has the classic BlackBerry design: half-height screen above, physical keyboard below.

That is a feature few rivals offer. Touch-screen phones with physical keyboards, especially from the most popular brands, are rare, and they’re usually not especially successful.

The Q10’s screen is 720 by 720 pixels â€" the biggest, sharpest screen ever on a keyboard phone, according to BlackBerry. The battery is bigger than the Z10’s; since the screen (the single most power-hungry component) is also smaller, that means the Q10 lasts much longer on a charge â€" 13.5 hours of talk time (compared with eight hours on the iPhone 5).

And then there’s the keyboard. Yes, that’s something BlackBerry is really good at. After so many years of fussing with typing on glass and making fidgety corrections, it really is sweet to have real keys. They’re not only useful when you’re writing; they also let you use all the beloved BlackBerry keyboard shortcuts: “T” for top of message, “R” for reply, “F” for forward, “L” for reply all, and so on.

Autocorrect is much less important when you have a real keyboard, of course. But at your option, the Q10 still displays, just above the keyboard, the three most likely completions of the word you’re typing. You tap one of these words to insert it into what you’re writing.

And man, is it smart. I wanted to type “Unfortunately, the company is not prepared to comment.” All I had to type were the letters shown here in boldface â€" six letters in total. In each case, the phone correctly predicted the next word I wanted â€" and even punctuation â€" requiring only one tap each. (That is, I typed “Un,” and the options included “Unfortunately.” I tapped that one, and then the button options included a comma. I tapped that one, and the choices included “the.” And so on.)

I’ll come right out and say it: no phone on the market offers a better combination of speed and accuracy for entering text.

As a bonus, the Q10 lets you type out shortcut commands from the home screen. “BBM Chris” lets you jump into a BlackBerry Messenger (instant message) chat with Chris. And so it goes with “Email Robin,” “tweet” (to enter a Twitter post), “txt” (to send a text message), “call 556-1000,” “Facebook” (to make a Facebook post), “li” (to say something on LinkedIn). Efficiency freaks everywhere should be rejoicing.

The Q10 comes with BlackBerry 10.1 software, an upgrade from what arrived on the Z10. (The Z10 will get this upgrade eventually.)

The enhancements are pretty minor. You can now paste a phone number into the dialing pad. You can opt to have your ActiveSync e-mail keep only the last 30 or 60 days’ worth of e-mail. And the BlackBerry Balance feature (the one that keeps your personal and corporate worlds separate) has been enhanced to let companies enforce even more restrictions on what your phone can do.

Now there’s a high-dynamic-range (HDR) mode in the camera app, which combines the brights and darks from three photos, taken with different exposures, for richer shots.

Now the big drag with a physical keyboard is, of course, that you lose half the screen space. You pay the price when you try to look at a map, a photo or, in particular, a movie. You also lose the niceties of an on-screen keyboard, like the ability to switch its keys to a different alphabet.

But there are thousands of people who use a smartphone mostly for e-mail, texts and typing â€" thousands who’ve been waiting for a physical keyboard on a modern smartphone. If the screen-space trade-off is worth it to you, and if you don’t mind betting on an underdog, you’ll find no better keyboarded phone than the BlackBerry Q10.

System Failure Delays Options Exchange

The Chicago Board Options Exchange opened after a delay of several hours on Thursday because of a system failure.

By early afternoon, the options exchange, the nation’s largest, said all of its systems were operating normally. But brokers who normally trade tens of thousands of options each day through the exchange sat on the sidelines for much of the morning, waiting for updates.

The exchange trades option based on the Standard & Poor’s 500-stock index and the VIX index, a popular barometer of investor sentiment about volatility in United States equities markets. The contracts are important tools among investors seeking ways to hedge their stock holdings.

The system failure was was the second example this week of technology intruding into trading in the United States. Earlier this week, a false tweet from The Associated Press that reported explosions at the White House caused the S.&P. 500 to plunge nearly 150 points in two minutes. The markets rebounded quickly after the A.P. said its Twitter account had been hacked.

A press release from the exchange said the delay was not the result of hacking but did not provide any more information about the system problem. Gail Osten, a spokeswoman for the exchange, declined to provide further information in an e-mail.

Edward Provost, the chief business development officer for the exchange, later said that a “software glitch” caused the failure, according to Bloomberg News. Mr. Provost made his remarks from an industry conference that he and other exchange executives were attending in Las Vegas.

Analysts said while investors could find alternatives to S.&P. 500 options, few good alternatives were available for the VIX index.

The first notice that something was awry at the exchange came soon after 8 a.m. Eastern time, when the exchange’s system said that some users were experiencing “issues” downloading certain products. The exchange delayed its opening, expecting to start trading about 10:15 a.m. Eastern time, according to notices sent to traders.

That opening never happened. And for several hours the exchange could not provide an expected opening time. Finally, more than three-and-a-half hours past its usual opening, the exchange said all trading would begin at 1 p.m. Eastern time. About a half-hour later, the exchange reported all systems were operating normally.
Observers said while the failure most likely idled investors trading the volatility index this morning, they said it was fortunate that the equity markets were relatively quiet and stable.

“We would be having a very different conversation if the S.&.P 500 was down 50 points or more,” said Mark Sebastian, the chief operating officer of Option Pit, an educational and consulting firm. “It is kind of a slow day, so this wasn’t a big deal.”

Equity markets climbed higher during the morning, buoyed by robust corporate earnings. The S.&.P. 500 was up 13.09 points, at 1,591.94, in early afternoon trading.

Why Alibaba Could Be China’s Next $100 Billion I.P.O.

Could Alibaba be China’s next $100 billion stock market listing?

The Hangzhou-based e-commerce giant continues to be coy over when it will take the plunge. But sooner or later, its founder, Jack Ma, will need to offer some kind of exit for his backers, not to mention employees, and an initial public offering is the most likely solution. Now is a good time to start asking how the company should be valued.

Alibaba’s main business is selling. Its Tmall online stores provide a shop front for brands like Nike and Unilever, while Taobao is focused on consumer-to-consumer trade. The closest U.S. peers might be Amazon and eBay. Sadly for valuation purposes, there’s no perfect match: unlike Amazon, Alibaba doesn’t hold inventory or manage warehouses, and unlike eBay, it gets most of its revenue from advertising, not chargingusers.

Meanwhile, its range of services gets ever wider, and potentially harder to value. As well as accounting for the majority of China’s e-commerce, a market worth $204 billion last year according to the China Internet Network Information Center, Alibaba now has a mobile operating system, offers trade financing to vendors and may even start offering consumer loans. The company’s chief strategist says it aims to be “the world’s biggest data sharing platform”.

Fortunately, there are two numbers that really matter. One is how much Alibaba can sell. The other is what percentage “take” it gets from each transaction on its sites. That take might come through advertising or through transaction fees, or a mixture of both. But ultimately, it represents the cash the company can squeeze out of its sellers. Other services like lending may create revenue, but for now they are mainly ways to lock in users and maintain market share.

Consider a back-of-envelope valuation exercise. The first question is how big the overall market can get. Say e-commerce in China grows 35 percent a year for the next two years, and that Alibaba can keep its current market share of around 80 percent. That would give it just under $300 billion of transactions in 2014 â€" over four times what eBay’s marketplaces handled in 2012.

Now imagine Alibaba can raise its “take” to 5 percent â€" roughly double what it gets now. For now, Taobao sellers use the site for free, but having reached critical mass, Alibaba should be able to exploit the “network effect” of its 500 million users to generate higher income, either by introducing transaction costs or selling more targeted ads. A 5 percent “take” would still be just a third of what eBay gets from many of its sellers, and would generate $15 billion of revenue for Alibaba.

The next question is profitability. Apply a 30 percent operating profit margin - roughly the level in September 2012, the last period for which there are reported numbers - and the 15 percent tax rate many of China’s high-tech companies enjoy, and 2014 earnings would be $3.8 billion. On a forward earnings multiple of 25 times, the recent average for listed Chinese gaming network Tencent, that suggests a market value of $95 billion.

In reality, many more factors will affect Alibaba’s magic number. Mr. Ma will need to time the stock market cycle, but also the tech cycle. With many foreign backers, Alibaba will most likely need to list on foreign markets, where stock buyers will be influenced by what they think of China’s regulation, economy and accounting practices.

Valuations for companies like Baidu, Renren and Sina show gyrations not always explained by the performance of their underlying businesses.

Valuations change quickly. Facebook’s went from $50 billion in its fund-raising at the end of 2010 to $104 billion at its I.P.O. in 2012; the company now trades at just two-thirds that value. When Yahoo recently sold half its Alibaba stake back to the company, the deal valued the company at just $40 billion. But a bilateral negotiation by with a troubled U.S. company is very different to a stock market listing.

Besides, internet companies are inherently volatile. Super profitability attracts super competition, and disruptive technologies can take even established models by surprise. Netscape and Microsoft both showed how supposedly unassailable market positions can be lost as well as won. If a 12-digit valuation is within reach, it makes sense for Alibaba to open the cave sooner rather than later.

John Foley is Reuters Breakingviews China Editor. For more independent commentary and analysis, visit breakingviews.com.

Chief of Unit Overseeing Britain’s Bailout Investments Resigns

LONDON - Jim O’Neil, who has been in charge of the British government’s stakes in Royal Bank of Scotland and Lloyds Banking Group, resigned on Thursday to return to Bank of America Merrill Lynch.

Mr. O’Neil had been the chief executive of United Kingdom Financial Investments, the Treasury unit set up in 2008 to recoup the government’s investments in banks that had to be bailed out during the financial crisis. The office has yet to name a successor.

Mr. O’Neil, an American, will rejoin Bank of America Merrill Lynch as co-head of the global financial institutions advisory business later this year. He will stay in London and run the unit together with Bill Egan, who is based in New York.

The sale of the British government’s 82 percent in R.B.S. and 40 percent in Lloyds is taking longer than initially expected. The market value of the investments in the two banks continues to be below the government’s initial investments. The crisis in the euro zone and banking scandals, including the sale of an insurance product to clients that could not benefit from it, delayed the banks’ recovery and weighed on their share price.

Pressure to come up with a new plan for the government’s holdings in the bailed out banks has increased lately as some lawmakers became impatient. Some politicians suggested breaking up R.B.S. while others said the government should hand out shares directly to taxpayers.

Mr. O’Neil has been meeting regularly with the boards of R.B.S. and Lloyds to ensure that the banks’ strategy was in the interest of British taxpayers and the government.

The Treasury unit said in a statement that it saw the role of the U.K.F.I. “as critical in maximizing the value of its shareholdings in R.B.S. and Lloyds Banking Group and in returning both banks to the private sector.”

Before joining U.K.F.I. as head of market investments in 2010, Mr. O’Neil was head of corporate finance outside the Americas at Bank of America Merrill Lynch.

K.K.R. Earnings Beat Expectations as Fee Profits Rise

The still-improving landscape for deal-making has been kind to Kohlberg Kravis Roberts, which posted first-quarter earnings of $647.7 million on Thursday, surpassing analysts’ expectations.

That profit, reported as after-tax economic net income, amounted to 88 cents a share. Analysts on average expected the firm to earn 75 cents a share, according to Capital IQ.

K.K.R.’s latest results, together with those of its rival, the Blackstone Group, signal that a relatively strong climate remains in place for private equity firms, which still draw much of their earnings from buying and selling companies. Stronger markets have also improved the value of their holdings.

Over all, K.K.R.’s portfolio grew 5.9 percent during the quarter.

“We had a good start to the year with strong returns, cash flow generation, and balance sheet income,” Henry R. Kravis and George R. Roberts, the firm’s co-founders and co-chairmen, said in a statement.

While K.K.R.’s economic net income, which includes unrealized gains from investments, fell from the $727.2 million it reported in the period a year earlier, other measures indicated strong performance.

Fee-related earnings rose nearly 20 percent during the quarter, to $88 million. The firm benefited from its ability to both buy new companies and, perhaps more important, sell existing holdings.

Total distributable earnings, which measure what the firm earmarks for payouts to limited partners, rose 77 percent, to $290.6 million.

Assets under management grew more slowly during the quarter, rising about 3.7 percent, to $78.3 billion. The increase arose from both improvements in the firm’s holdings and the reaping of new capital.

As part of Thursday’s announcement, K.K.R. said it was changing its distribution practices. Instead of paying out a single annual distribution of realized balance sheet income, the firm will dispense 40 percent of its realized balance sheet income every quarter.

The payouts will accompany the firm’s standard payments of after-tax fee-related earnings and realized cash carried interest.