- Michael Kramer and three other bankers sued firm in May 2015
- Ex-employees allege they were forced out for forming new firm
Perella Weinberg Partners LP won a ruling narrowing a lawsuit by four former bankers who claimed the investment bank manufactured grounds to push them out and keep $60 million in compensation.
The case is being watched closely by Wall Street as it shines a rare spotlight on a dispute between a financial firm and its employees. Such fights are often handled behind closed doors in arbitration or mediation.
Michael Kramer, Derron Slonecker and two other former members of Perella Weinberg’s restructuring group -- Joshua Scherer and Adam Verost -- sued for wrongful termination in May 2015, saying the firm manufactured reasons to fire them and cheat them out of about $60 million in deferred compensation. Perella Weinberg fired back in October with a suit of its own, saying the former bankers breached their contracts by colluding to form a new partnership.
New York state court Justice Shirley Werner Kornreich dismissed some of the ex-Perella Weinberg bankers’ claims in a ruling Tuesday, while allowing the lawsuit to move forward on allegations that the firm interfered with their business prospects and defamed them. The judge allowed Kramer and the others to refile some claims. She also rejected Kramer’s and Slonecker’s request for a pre-trial order that they’re entitled to the deferred compensation, saying that more evidence is required to determine whether their firings were justified.
The judge recused herself, saying she might have a conflict of interest because her husband is a partner at the same firm as one of Kramer’s lawyers, who might be called as a witness.
“With all due deference to the court, we don’t necessarily see eye-to-eye on certain issues," said Lisa Solbakken, an attorney representing the former Perella Weinberg bankers. “That said, our primary claims were not even challenged by the motion.”
Kara Findlay, a spokeswoman for Perella Weinberg, didn’t immediately return a message seeking comment on the ruling.
Kramer started up a new firm, Ducera Partners, after being fired from Perella Weinberg last year. Ducera is helping advise Monsanto Co. in Bayer AG’s attempted $55 billion takeover of the company. Monsanto on Tuesday rejected Bayer’s bid as financially inadequate. Ducera last year won work with a group of Puerto Rico bondholders as the island sought to restructure its debt.
Perella Weinberg has hired new talent to rebuild Kramer’s old team. The company acquired his firm, Kramer Capital Partners, in 2006 for an undisclosed sum to build its restructuring practice.
The case is Perella Weinberg Partners LLC v. Kramer, 653488/2015, New York State Supreme Court, New York County (Manhattan).