LA Dodgers linked to $20 billion plan to stabilize big insurers: WSJ

Damian Dovarganes

New owners of the Los Angeles Dodgers, from left, Robert Patton, Stan Kasten, Mark Walter, Earvin “Magic’ Johnson,” Peter Guber, and Todd Boehly pose for a photo at Dodger Stadium in Los Angeles on Wednesday, May 2, 2012. The $2 billion sale of the team to Guggenheim Baseball Management was finalized Tuesday. (AP Photo/Damian Dovarganes)

However, another investor, Guggenheim outside lawyer Dan K. Webb, said the arrangement makes the Guggenheim-affiliated insurers “likely among the safest” in the country, according to the WSJ. Assets pledged through Safe Harbor include stakes in the Dodgers, another firm that operates one of the biggest Wendy’s hamburger franchises in the country, and shares in Carvana, an online car dealer.

Guggenheim’s Dodger connection came under scrutiny after two annuity holders sued in 2014, saying the firm was using the insurance companies to buy the Dodgers and then hiding the transactions in regulatory filings. The suit was quickly withdrawn, but did attract scrutiny from regulators, who ultimately concluded nothing was amiss.

Walter told the Journal that Safe Harbor’s purpose is to provide security in the event credit markets turn sour. The vehicle makes off-balance-sheet investments in higher yielding instruments that aren’t typical for insurance companies, whose risk-taking is limited generally to investment-grade bonds.

Guggnheim did not immediately respond to a CNBC request for additional comment.

The Journal’s full report can be found on its website.

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