Friday, May 06, 2011

Ares, Tailwind that has ties to Steven J. Baum Said to be subpoenaed in N.Y. foreclosure probe

Ares Capital Corp. and Tailwind Capital LLC were subpoenaed by the New York Attorney General for documents related to a probe of a legal processing firm tied to faulty foreclosures, two people familiar with the matter said.


Tailwind, a private equity firm, and investment firm Ares both have financial ties to Pillar Processing LLC, which processes foreclosures for the law firm of Steven J. Baum. Baum handles almost half the foreclosures in New York, according to one of the people. Baum and Pillar were subpoenaed about a month ago, according to the second person. Both declined to be identified because the matter isn’t public.

New York Attorney General Eric Schneiderman is investigating whether Pillar engaged in the unauthorized practice of law, one of the people said. Baum’s firm, located in Amherst just north of Buffalo, has been accused of overcharging, filing false documents and representing parties on both sides of a mortgage transfer, according to court papers. Pillar, which Baum sold in 2007, shares an address with the law firm.

Ares made a $31.3 million debt investment in Pillar, according to Bill Mendel, a spokesman for Ares. Tailwind made a $50 million equity investment in Pillar, one of the people said. Pillar was spun off by Baum in 2007.




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