Billionaire, millionaire square off at NYC trial

AP News
|
Posted: Jan 24, 2012 6:57 PM
Billionaire, millionaire square off at NYC trial

A longtime friendship that went sour between billionaire Ronald Perelman and his right-hand dealmaking fellow executive took center stage Tuesday at a trial over a $16 million dispute.

"I never expected to be at odds with Mr. Perelman," Donald Drapkin told a Manhattan federal court jury at a legal proceeding that flowed from the fallout of the two wealthy and powerful dealmakers.

The trial is unusual because it involves a relatively small amount of money given the net worths of the two men, former best friends.

Perelman was not in court for the trial, expected to last a week, and there was little mention of him as Drapkin fought to force Perelman's company, MacAndrews & Forbes, to pay what it promised in a contract when Drapkin quit the company in May 2007. The company said he violated the contract and it owes no more than $5 million it has already paid.

The company accused Drapkin of violating the contract by keeping confidential documents and telling a key employee that his prospects there were worsened because Drapkin was gone. Drapkin insisted he did not violate it.

"I never believed and do not believe to this day there is a single word in that document I would go against," Drapkin said.

In opening statements, his lawyer, Elkan Abramowitz, argued that MacAndrews & Forbes used the flimsiest of excuses to stop paying Drapkin after he left the company "he helped build" to run a hedge fund.

"There's no reason whatsoever for MacAndrews to withhold $16 million from its longtime vice chairman," Abramowitz said.

He reduced the dispute to the level of a childhood playground spat, saying MacAndrews was nitpicking reasons to tear up the contract so it could say: "Aha! He violated the agreement. See, you lose $16 million."

The company's attorney, Steven Kobre, said the violations were serious because the contract was written to protect MacAndrews & Forbes from losing control over secrets that had brought it great success with ownership of companies including Revlon Inc., the global beauty products firm.

Kobre said Drapkin "could care less" about satisfying an agreement that promised him a total of $27.5 million, along with electronic devices, five cellphones, hundreds of thousands of dollars to pay a secretary and a car.

"He didn't really try to comply at all," Kobre said. "He blew off the promise."

Drapkin said $12 million of the money mentioned in the contract was for the sale of his own stock in MacAndrews & Forbes, something he said would allow the company to continue to control a larger percentage of itself.

"I wanted to leave on friendly terms," Drapkin testified.

Kobre said Drapkin within weeks of the deal had violated two provisions meant to protect the company. The lawyer said Drapkin had kept thousands of documents with confidential company information on a computer he was allowed to keep and had tried to influence a prominent heart surgeon to leave the company.

Abramowitz said he believed the contract did not require Drapkin to delete the documents from the computer, and he noted that Drapkin had persuaded the doctor to join MacAndrews & Forbes and that he was still working there.

Drapkin estimated that he made at least $200 million working at the company while Kobre said it was more like $300 million.