Home Capital says West Face to claim $70 mln in damages: Reuters

Canadian mortgage lender Home Capital Group Inc said on Tuesday that West Face Long Term Opportunities Global Master LP had sent it a draft statement alleging misrepresentation and claiming $70 million (US$54.7 million) in damages.

Home Capital, Canada’s biggest non-bank lender, had agreed on a settlement with the Ontario Securities Commission in June and accepted responsibility for misleading investors about problems with its mortgage underwriting procedures.

West Face confirmed on Tuesday that it had opted out of that settlement and raised its claim directly with Home Capital.

West Face had built a “significant” short position in the bank’s stock in 2013 and covered it by 2015, Home Capital said.

Update: West Face Long Term Opportunities Global Master LP is managed by West Face Capital, a Toronto-based alternative investment firm.

Earlier this year, Home Capital secured a $2 billion (US$1.50 billion) line of credit and $400 million indirect investment from Warren Buffett‘s Berkshire Hathaway Inc.

(Reporting by Anirban Paul in Bengaluru; Editing by Sriraj Kalluvila)

(This story has been edited by Kirk Falconer, editor of PE Hub Canada)

Photo courtesy of Reuters/Chris Helgren