WEST PALM BEACH, Fla. – Financier Ronald Perelman (search) Monday won $604.3 million from Morgan Stanley in a Florida court case.
The unanimous verdict of the nine jurors in Florida district court found that Perelman, chairman of cosmetics giant Revlon Inc. (REV), relied on representations made by the investment bank when he sold his camping-gear company Coleman Inc. (search) to Morgan Stanley's client, Sunbeam Corp. (search) in 1998.
Apart from the compensatory damages awarded by the jury, Perelman is claiming punitive damages, which could take the investment bank's hit to $2.7 billion.
Perelman sold his 82 percent stake in Coleman to Sunbeam in 1998 for $1.5 billion including stock. Shortly afterward, Sunbeam's problems were exposed and the value of Perelman's investment plummeted. Sunbeam sought bankruptcy protection in February 2001.
Perelman's team has been considerably helped in its claim by a so-called default judgment made by Judge Elizabeth Maass that the jury must accept as fact that Morgan Stanley helped Sunbeam defraud investors. As a result Perelman has only to persuade the jurors that he relied on representations made by the bank.
The judge made the ruling March 23, following Morgan Stanley's continued failure to provide information and documents relevant to the case.
The judge ruled Monday that the bank's failure to provide crucial documents isn't limited to the question of liability but can be used in support of Perelman's claim for punitive damages which are awarded where the court decides a defendant's misconduct justifies it paying over and above mere compensation.
Morgan Stanley shares were unchanged at $48.22 on the New York Stock Exchange (search).