Essentially, Walter’s needed cash ASAP to pay down the loans on his insurance companies BS as a result of insurance regulators flagging his company and the DOJ investigation. The accusation is that Walter’s took $18b in insurance premiums and rather than investing in HY bonds, IG debt, or private credit, he gave his other financing companies a direct loan. That accounts for 40% of the insurers investable assets and was previously reported as only 1.3%. This is a huge violation in the insurance space and invites a whole conflicts of interest issue where he’s prioritizing his other business at the expense of the policy holders. He needed to get rid of the loans, hence the Lakers flip. Now, he’s trying you secure additional financing using his stake in Guggenheim as collateral. So much financial alchemy going on - it’s a house of cards.  

Bloomberg) -- [Mark Walter](https://blinks.bloomberg.com/people/profile/16421128) offered to pledge his stake in his prized financial assets as part of a broader effort to raise billions of dollars in quick order.

To secure the loans in recent weeks, Walter proposed as collateral his equity stake in [Guggenheim Partners LLC](https://blinks.bloomberg.com/securities/666296Z%20US%20Equity), which runs a $320 billion asset-management arm as well as a broker-dealer, according to people with knowledge of the matter. Investors were offered double-digit yields to lend capital to Walter’s [TWG Global](https://blinks.bloomberg.com/securities/2878418Z%20US%20Equity) holding company, the people said, asking not to be identified because the information isn’t public.  
￼  
TWG has been exploring a range of deals with investors in a bid to clean up loans on his insurers’ balance sheet that have drawn scrutiny from federal prosecutors. Those talks have continued even after a deal was struck to sell Walter’s Los Angeles Lakers basketball team.

Representatives for TWG and Guggenheim didn’t immediately respond to requests for comment.Walter has a net worth of $16.3 billion, including an estimated 20% stake in Guggenheim Partners, according to the [Bloomberg Billionaires Index](https://blinks.bloomberg.com/screens/RICH).

The recovery plan on those bridge loans would have allowed investors to enforce the collateral by seizing and selling it if TWG Global failed to repay the short-term loan at the end of a year, one of the people said.  
The billionaire’s firm has thrown out a number of different structured deals to help pay down or restructure the loans on the books of his insurers. TWG has been working on plans to address concerns about the outsize loans Walter’s insurers have made to prop up other parts of his investment empire, and those efforts have ramped up in recent days, some of the people said.

That was punctuated by the disclosure Wednesday that Walter is selling the Lakers to [Josh Kushner](https://blinks.bloomberg.com/people/profile/17751280)and [Bob Iger](https://blinks.bloomberg.com/people/profile/1435884) for a record-breaking $12.5 billion, a deal that came together in a matter of days. Walter had bought a majority stake in the team just over a year ago in a deal valued at $10 billion. Even in a world where owning teams has gone beyond a vanity project to an investing mainstay, flipping a prized franchise like the Lakers in such a short time has sent shockwaves across the sports world.

The proceeds from the sale will help accelerate TWG’s efforts to clean up its insurers’ balance sheet, people with knowledge of the matter said.  
Those insurers — [Delaware Life Insurance Co.](https://blinks.bloomberg.com/securities/3636Z%20US%20Equity) and [Clear Spring Life and Annuity Co.](https://clearspringlife.com/home) — are slated to issue a quarterly update next week, and are aiming to report a reduction of as much as $8 billion in affiliated assets tied to other parts of Walter’s empire, two people with knowledge of the matter said. A representative for the insurers declined to comment.  
Walter is chief executive officer of the parent company of the [Guggenheim Securities](https://blinks.bloomberg.com/securities/13684Z%20US%20Equity) brokerage and the firm’s money manager, [Guggenheim Investments](https://blinks.bloomberg.com/securities/0444524D%20US%20Equity). He has played a leading role in Wall Street’s rapid incursion into the insurance industry, as giant asset managers use policyholder funds to make private-credit wagers that are often opaque and illiquid.

After receiving grand jury subpoenas in February, the two insurance companies reclassified billions of dollars of loans to show that they were tied to Walter’s other businesses than previously believed. Walter’s Delaware Life restated its related party investments to about $18 billion, or 40% of total invested assets, from $1.3 billion, or 3%.

S&P Global Ratings said last month that Delaware Life is now carrying out a “remediation plan” to reduce its exposure to affiliated investments and to improve financial controls.

Federal agents seized Walter’s mobile phone and computer last September as part of the wide-ranging probe, Bloomberg News reported in July. Investigations by prosecutors can end without charges being brought.

“Mark Walter and TWG have always acted in good faith, and those who have done business with Mark know him as honest and straightforward,” TWG Global said in a statement in July. “We are cooperating with authorities, and we are confident these matters will be resolved favorably.”

There’s nothing improper about insurers making loans to related parties, but insurance rules require them to be disclosed, and regulators give them special scrutiny to try to ensure that a firm’s owners don’t put their interests ahead of policyholders.

Walter’s other prominent business interests include his ownership of the Los Angeles Dodgers baseball team and he’s an investor in English Premier League club Chelsea. Other sports properties that TWG owns include the Cadillac Formula 1 Team and the Los Angeles Sparks.

Walter’s Lakers sale is making more sense - update from BBG