Morgan Stanley appeals $1.5 billion award to Perelman in fraud lawsuit James M Yoch Jr at 7:59 PM ET
[JURIST] A lawyer for Morgan Stanley [corporate website] asked a three-judge panel of the Florida Fourth District Court of Appeal [official website] on Wednesday to overturn a "disproportionate" 2005 jury verdict awarded [JURIST report] to billionaire financier and Revlon Chairman Ron Perelman. In oral arguments Wednesday, lawyer Bruce Rogow asserted that the suit should have been tried under New York state law, which has a higher standard of due diligence for parties making contracts, since both parties are from New York. Rogow also urged the panel to reverse the judgment because the trial judge placed the burden of proof on the defendant for failing to disclose incriminating e-mails. Perelman's attorney, Paul Smith, characterized the failure to disclose as willful fraud by Morgan Stanley and focused on Florida's interest in preventing fraud that occurs in the state.
Perelman, who relied on Morgan Stanley's advice in the 1998 sale of his controlling stake in Coleman Co. to Sunbeam Corp. sued the investment bank claiming that its executives had conspired to defraud him by misrepresenting Sunbeam's financial status. The award rose to $1.58 billion after several adjustments [JURIST report] for interest and previous settlements. Reuters has more. Bloomberg News has additional coverage.
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