Perelman’s MacAndrews Faces $18 Million Back-Pay Trial ‘About Fairness’
Donald Drapkin, the longtime associate of billionaire Ronald Perelman, told a jury that he never thought his colleagues at Perelman’s MacAndrews & Forbes Holdings Inc. would try to cheat him out of $16 million.
Drapkin took the witness stand today as his trial against MacAndrews & Forbes got under way in Manhattan federal court. Drapkin is suing for compensation that he says the firm failed to pay him after he left in 2007.
“I never expected to be at odds with Mr. Perelman,” Drapkin, the firm’s former vice chairman, testified. “I never thought they would try to screw me. They were my friends for 20 years.”
Drapkin, a dealmaker at the firm, says he was hired by Perelman in the 1980s to serve as vice chairman and to act as in-house investment banker. By 2006, the relationship between the two men had deteriorated so sharply that Drapkin’s salary had been slashed and his responsibilities cut, according to court papers.
In court today, Drapkin’s lawyer, Elkan Abramowitz, told jurors in his opening statement that Drapkin agreed to leave the firm in return for millions of dollars in severance and from the sale of his stock. Drapkin has yet to be paid $16 million, Abramowitz said.
“It’s a case about fairness, about whether a company, MacAndrews, which Donald Drapkin helped run for 20 years, can renege on its promise for the flimsiest of excuses,” Abramowitz said.
Perelman, 69, is chairman and chief executive officer of MacAndrews & Forbes. While not named as a defendant in the case, he may testify later this week. Among the companies owned by MacAndrews & Forbes are cosmetics maker Revlon Inc. and Deluxe Entertainment Services Group Inc., a provider of movie services.
Steven Kobre, a lawyer for MacAndrews & Forbes, told jurors in his opening statement that the firm paid Drapkin millions of dollars when he left in 2007. It also agreed to pay him millions more if he promised not to induce other employees to quit and to return all company documents.
“Mr. Drapkin willfully disregarded his obligations,” Kobre said.
According to Kobre, Drapkin tried to encourage Eric Rose, a surgeon who was executive vice president of life sciences, to leave MacAndrews & Forbes. Drapkin and his personal assistant also kept thousands of documents on a company computer given to them when they left.
“Mr. Drapkin didn’t live up to his promises,” Kobre said.
Abramowitz assailed both arguments, describing one as a “nitpicking albatross.” He said that Drapkin never asked Rose to leave and that Drapkin turned over documents he was required to surrender.
Drapkin, who joined Lazard Ltd. after leaving MacAndrews & Forbes, testified that his former firm first withheld a payment due to him on Jan. 1, 2009. He said he hadn’t tried to induce Rose to leave during a dinner at Quality Meats in Manhattan.
“I was having dinner with one of my closest friends,” Drapkin testified. “I remember nothing except that we were -- pardon the expression -- B.S.’ing about our respective families’ lives and nothing about business.”
Drapkin said he complied with the separation agreement by leaving behind his personal computer and telling his assistant to delete documents they no longer needed. He said he’d discarded laptop computers given to him by the firm.
Drapkin, a lawyer who previously worked as a mergers partner at New York’s Skadden, Arps, Slate, Meagher & Flom LLP, sparred with defense attorney Matthew Menchel during cross- examination. Asked by Menchel whether he had earned $320 million during his years at MacAndrews & Forbes, he said he didn’t know.
“Why did I need to know?” Drapkin testified. “To brag about it?”
Drapkin, who will resume his testimony tomorrow, said he had breakfast, lunch and dinner with Perelman and Howard Gittis, another senior executive, on most working days.
Drapkin may rest his case tomorrow, Abramowitz told U.S. District Judge Paul Gardephe.
The cases are Drapkin v. Mafco Consolidated Group, 09- cv-1285, and MacAndrews & Forbes LLC v. Drapkin, 09-cv-4513, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: David Glovin in New York at Dglovin@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at email@example.com