Elliott Management’s Response to Fortune
In the Fortune article titled “Inside Elliott Management: How Paul Singer’s Hedge Fund Always Wins,” Fortune relayed several instances in which unnamed people allege that the adult children of various executives were contacted by individuals that they assumed to be working for Elliott Management. This assumption and the implicit allegations that Elliott sent anyone to contact the children of these executives are completely false.
Elliott has always behaved ethically in its disputes with corporate managements and boards, and it is regrettable and disappointing that certain parties adverse to us would choose to promote false allegations about us rather than engage on the merits of our arguments in good faith.
The allegations related to Arconic in particular appear to us to be an attempt by those close to its former CEO, Klaus Kleinfeld, to rationalize his decision to send a letter to Elliott that threatened to intimidate or extort our co-CEO.
This belief applies especially to the allegations that appear to have been made by Norbert Essing, an associate of Mr. Kleinfeld’s who has been credibly accused of blackmail in Germany (a fact that Fortune declined to disclose to its readers). In a letter sent last spring to Elliott, Mr. Essing’s lawyers made a number of allegations regarding certain contacts he and/or his family may have had, while admitting that Mr. Essing “has no idea who is behind” the contacts that he alleges to have occurred. Elliott’s general counsel informed Mr. Essing’s lawyers in a response that “Whatever the credibility of those allegations, and there are many reasons to doubt their credibility … we do not know anything about them, [and] our firm had nothing to do with them.”
To be clear, neither anyone working for Elliott nor anyone acting on Elliott’s behalf approached any of Mr. Kleinfeld’s children or any of Mr. Essing’s children in any way. We have also looked into allegations concerning a phone call to a BMC director’s daughter and concluded that neither anyone working for Elliott nor anyone acting on Elliott’s behalf made the call described in the article or any call like it.
In short, we maintain that these allegations are false, or at minimum that the belief allegedly shared by Fortune's sources that Elliott was involved in these alleged incidents is either mistakenly held or was maliciously concocted. We believe that Fortune was wrong to publish these and other allegations given the obvious credibility issues and biases of the people who appear to be behind them.
Unfortunately, Fortune went beyond simply relaying these allegations — it used language to create the impression in the article that the allegations were true, and that Elliott was in fact behind these alleged contacts, despite having no factual basis for attributing these incidents to Elliott.
Fortune’s claim to have “learned previously unreported details that reveal just how far Elliott will go to win” is therefore based primarily on “details” that are false, calling into question the credibility of the false theme in the article that Elliott is willing to cross ethical boundaries in its disputes.
In the past year, individuals on the other side of disputes with our firm have been jailed for bribery, indicted for corruption (and worse) and forced to resign for sending a threatening letter to our co-CEO. Yet Fortune somehow draws the conclusion from this fact pattern that Elliott is the party in these disputes that is willing to do “whatever it takes” to win.
This backward conclusion seems to follow from Fortune’s misguided decision to lend credence to unsubstantiated allegations about us made by those who appear to be seeking to excuse and obfuscate their own conduct and/or the conduct of others. Unfortunately for Fortune, those allegations are false, and should be retracted.
Elliott Management Corporation
