Around December 2006, Burry's fund liquidated billions of dollars of corporate credit default swap short positions in a fire sale instead of liquidating the fund.

True: Scion records or well-sourced accounts show that around late 2006 (roughly Oct 2006–Feb 2007), Scion unwound or sold corporate credit default swap short positions with notional value in the billions of dollars, at unfavourable or distressed prices, as an alternative to winding down the fund. Mostly true: the liquidation happened as described, but the timing is off by a few months or the size is near the low end of 'billions'. Mixed: the positions were sold, but not at fire-sale prices, or not instead of liquidating the fund. Mostly false: the liquidation of corporate credit default swaps happened, but it was much smaller (well under $1 billion notional) or at a clearly different time. False: no such liquidation of corporate credit default swaps took place.

Set before the research began.

1. E1 Microsoft Word - Scion3Q2006draftb.doc Capital Alligator (repost of Scion Capital, LLC third-quarter 2006 investor letter) · 5 October 2006 Own record

   “Given how close we are to fruition in our housing short, and by extension our corporate credit shorts, I do not feel much need to own a further removed short on the same thesis.”

2. E2 Scion Capital Letters.pdf Scribd (compilation of Scion Capital investor letters and primers) · 7 November 2006 Own record

   “These credit protection contracts cover $4.27 billion in notional value, largely focused on financial companies.”

3. E3 Scion 2006 4q Rmbs Cds Primer and Faq Scribd (hosted copy of Scion Capital's November 7, 2006 letter) · 7 November 2006 Own record

   “These credit protection contracts cover $4.27 billion in notional value, largely focused on financial companies.”

4. E4 Scion Capital Letters.pdf Scribd (hosted copy of Scion Capital investor letters) · 7 November 2006 Own record

   “These credit protection contracts cover $4.27 billion in notional value, largely focused on financial companies.”

5. E5 (none) Scion Capital, LLC (Third Quarter 2006 letter, hosted on capitalalligator.com) · 5 October 2006 Own record

   “Given how close we are to fruition in our housing short, and by extension our corporate credit shorts, I do not feel much need to own a further removed short on the same thesis.”

6. E6 서브프라임 CDS 공매도의 안전성 문답 — Michael Burry valuebeast.co.kr (third-party site reproducing Burry's Scion investor Q&A letter) · 1 November 2006 Own record

   “As of the end of October, single name corporate CDS amount to 3.27% and 3.55% of assets under management in the Scion Value Fund and the Scion Qualified Value Fund, respectively. The duration of this portfolio is roughly 3.5 years. These credit protection contracts cover $4.27 billion in notional value, largely focused on financial companies.”

7. E7 서브프라임 CDS 공매도의 안전성 문답 — Michael Burry valuebeast.co.kr (third-party site reproducing Burry's Scion investor Q&A letter) · 1 November 2006 Own record

   “there is a bona fide and adequate market in corporate credit default swaps. A side pocket is not necessary.”

8. E8 Michael Burry: Notes from Vanderbilt Speech Distressed Debt Investing · 4 May 2011

   “Due to Wall Street marking against him and his growing investor unrest he was forced to sell his corporate CDS and side pocket his subprime bets”

9. E9 Michael Burry: Notes from Vanderbilt Speech Distressed Debt Investing · 4 May 2011

   “Aside from being short $1.8 bln notional of sub-prime CDS he was also short $6.6 bln of corporate CDS in names including AIG, Wamu, Countrywide, Fannie and Freddie”

Scion's own November 2006 letter shows that as of end-October 2006 the funds held single-name corporate CDS covering $4.27 billion notional (E7). It does not mention selling them, and calls the corporate CDS market adequate (E8). The only account of the sale is a third party's notes on Burry's own 2011 speech (E9, E10). These notes say he was forced to sell his corporate CDS, but they give no date and say nothing about distressed prices or the sale being instead of winding down the fund. Because the only support for the sale, its timing and its fire-sale nature is Burry's own account, the evidence doesn't settle the claim.