New York (Reuters) - New York corporate financier Ron Perelman and his longtime business partner and best friend Donald Drapkin had a bad falling out when Drapkin left Perelman’s company five years ago.
So bad, in fact, that after decades making fortunes together buying and selling companies, they will face each other at trial in Manhattan federal court next week over what amounts to a contract dispute of about $20 million.
That would appear to be small change for the likes of Perelman, whose net worth was estimated by Forbes in September 2011 to be more than $12 billion.
But his court papers suggest he is more peeved by what he sees as Drapkin’s poor conduct than any desire to avoid paying him more.
There are two allegations that will come before a jury after two years of litigation.
One is that Drapkin improperly kept confidential company documents on a laptop hard drive after his employment with Perelman ended and he joined a rival firm, Lazard investment bank. In response, Drapkin’s lawyers, Elkan Abramowitz and David Dunn, said there was no basis to the allegation.
“The company points to the presence of a hodge podge of trivial and stale electronic files on a laptop” as a breach of the contract, according a pretrial memorandum ... such files have never been used by anyone for any purpose.”
The laptop belonged to Drapkin’s longtime personal assistant, Nancy Link.
The other issue is whether Drapkin tried to poach a star employee away from MacAndrews & Forbes, the Perelman holding company.
Drapkin’s lawyers said the claim was based on “a single alleged short conversation” between Drapkin and the employee, Eric Rose. They said it “troubled the company so little that it paid Mr Drapkin $4.5 million” of the amount due under his separation agreement after learning of the discussion.
Drapkin, 63, who now runs a hedge fund, was the first to sue in February 2009 for $18.5 million in unpaid compensation under a separation agreement. Perelman, 69, counter-sued three months later.
At least one effort was made in 2009 to settle the lawsuit, according to the court record. In a deposition, Drapkin said Wall Street deal maker Bruce Wasserstein sent Vernon Jordan, a lawyer who served as a close advisor to President Bill Clinton, to Perelman to try to mediate.
“Mr. Perelman said to Mr. Jordan that it had gone too far and that I was a bad boy,” Drapkin testified.
Both men could testify at the trial, which is expected to last two weeks before U.S. District Judge Paul Gardephe. The trial starts with jury selection on Monday.
Christine Taylor, a spokeswoman for Perelman, declined to comment. Drapkin’s lawyer, Elkan Abramowitz, declined to comment.
Perelman’s court papers say MacAndrews agreed to pay Drapkin millions of dollars more in exchange for “a handful of simple, yet important, promises by Mr. Drapkin” when he departed in 2007. Among them was a promise not to try and induce any MacAndrews’ employees away and not to keep company documents.
“Despite their simple nature, Mr. Drapkin did not keep those promises,” according to court papers filed by Perelman’s legal team of Steven Kobre and Steven Perlstein. “Nonetheless, he claims he is entitled to payment of the money he would have received if he upheld his end of the bargain.”
In the world of deal making, the pair are among New York’s best-known businessmen. They collaborated in deals involving Marvel comics, banks, television stations, Revlon and others.
Perelman, who is married to his fifth wife, psychiatrist Dr Anna Chapman, after four divorces, has for years also attracted the attention of the city’s tabloid newspapers. His wives have included actress Ellen Barkin and millionaire Patricia Duff, a Democratic Party fundraiser.
The case is Macandrews & Forbes LLC v. Drapkin in U.S. District Court for the Southern District of New York, No. 09-04513.
Reporting By Grant McCool; editing by Martha Graybow and Andre Grenon