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  "documentTitle": "Allied Capital (ALD)",
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  "authorName": "David Einhorn",
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      "text": "the appropriate standard is, 'what can you get for it today?'",
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      "text": "Mr. Scheidt: So, and we said no, and in fact in the first of the two letters, as I mentioned yesterday, we specifically included in response to those kinds of claims the statement that it's inappropriate for a fund to value it at what the fund would expect to get for it at some point in the future because the appropriate standard is, 'what can you get for it today?' So, a closed-end fund made the same sort of argument with a bank participation fund and we specifically included that in response to that claim. And we told them privately that they can't value their securities that way and I don't even know if you followed that market at all, but all the primary or other bank loan participation funds all of a sudden went from a fairly stable net asset value to a much more fluctuating net asset value and they took hits because they used a fair value approach which required them to lower the valuations of their securities.",
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      "text": "Mr. Einhorn: Exactly.",
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      "text": "Mr. Einhorn: It may also affect their ability for one-to-one debt/equity limitations.",
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      "text": "Mr. Scheidt: Yeah, so I know of no reason why and I have never -- I know that closed end funds have tried to argue that they shouldn't be subject to the same standards because of the differences between closed end funds and open end funds. For that same reason that the BDC ... but the Act and the law doesn't differentiate between the two. It says for all investment companies, they are required to use market quotes and do fair value. And we have had closed end funds make the same argument that since they don't have to do redemptions, that if they invest in a bank loan participation fund, they typically hold until maturity then they should be able to value it at what they can get for it at maturity unless there is some sort of impairment in the credit or the collateral that's underlying the bank loan.",
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      "text": "Mr. Einhorn: Right. Then what do you say in response to somebody who says well we have, we custom tailor every loan we make to every one of these private companies and these loans are very illiquid and custom tailored and we know these credits better than anybody else and than any potential buyer ever would, and we tend to hold these things for five to ten years. If you actually forced us to sell these things, pretty much any sale that we would make would constitute a fire sale.",
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      "text": "Mr. Scheidt: I would say we're not forcing you to sell. The way that I've told people when they raise the argument about how do you value illiquid securities, how do you apply the standard that says you use the value that you would",
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      "text": "NAV calculations that they are required to make or that they do make are subject to the 40 Act and regardless of whether they redeem or repurchase or sell their shares. So it is, and for example, their publication of their NAV may have an effect on market prices.",
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