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If Rattner Is Dismissed As Car Czar… Will He Go Back To Quadrangle?

Update: The deadline for LPs to decide whether they will terminate their investment in Quadrangle due to Rattner’s departure is one week from today, peHUB has learned.

Plenty of people are wondering if Steve Rattner’s involvement in the NY State Common kickback scandal will lose him his job as President Obama’s top auto industry advisor. It seems obvious that he’d be shown the door, even if he told the U.S. Treasury about the investigation before Obama took office.

It raises the question: Will he go back to Quadrangle? The firm recently put its fundraising on hold because of his departure. Meanwhile, he triggered a key man provision on older funds when he left (including Quadrangle Capital Partners II, the one which was named in the initial SEC complaint).

That key man provision requires a vote which had a deadline of April 24, a source said. LPs will be able to pull out the remaining 25% of uncalled capital to the fund if more than half of them vote in favor of doing so. However, Rattner’s return to the firm would in theory make such a vote unnecessary.

Further complicating the situation: Will New York State Common Retirement Fund be permitted to vote? The pension fund owns 10% of Quadrangle Capital Partners II, making it one of the largest Quadrangle stakeholders.

Of course, this is pure conjecture that would probably be moot if Rattner and Quadrangle are ultimately found to be in the wrong in this whole pay-for-play mess, but I have no doubt it’s something investors are anxious to find out.

Correction: A prior version of this story incorrectly noted that Quadrangle’s fund was “under indictment” which is inaccurate–Quadrangle’s fund was named, along with several other funds which had hired Searle as a placement agent, in the first SEC complaint. The funds have not been accused of wrongdoing.