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Tuesday, May 28, 2024 | Back issues
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Big-Wigs of Finance Quibble Over $16 Million Severance

MANHATTAN (CN) - Millionaire investor Donald Drapkin testified Wednesday that he was "screwed" out of $16 million by his "closest friends," including billionaire Ronald Perelman.

Drapkin quit Perelmen's firm, MacAndrews & Forbes, in May 2007 and claims that he never got what he was owed under the severance agreement. MacAndrews claims, however, that Drapkin is not entitled to the full amount because he breached that contract.

The dispute has raised eyebrows because of the relatively small amount of money at stake for Perelman, a billionaire who appears at No. 26 on the list of the Forbes 400 Richest Americans.

Attorneys parsed the eight-page separation agreement carefully in opening remarks on Wednesday.

Steven Kobre, who represents the firm, told the jury that Drapkin violated several stipulations by keeping confidential information on his computer and urging his friend and colleague Dr. Eric Rose to leave the firm with him.

Rose, who performed the world's first pediatric heart transplant, was the face of MacAndrews & Forbe's life-sciences investments.

"To lose his services would have been devastating," Kobre said.

On the stand, Drapkin denied that he ever had such a conversation with Rose.

"We talked about the stuff that lifelong friends normally discuss," Drapkin said, such as "families" and "love lives." Drapkin, 63, has five surviving children and has been separated from his wife for nearly a decade.

He said that Rose might have misconstrued a factual remark he made about MacAndrews & Forbes as advice to leave the company. Drapkin said he told Rose, "quite simply," that, "since I had been the prime mover of life sciences, that it would be more difficult to get life-sciences jobs done" at the firm.

But MacAndrews presented the conversation differently in opening remarks, with Kobre promising that Rose will testify that Drapkin's remarks "frightened" him.

MacAndrews says another part of the separation agreement required Drapkin to delete all of the firm's confidential documents from his and his secretary Nancy Link's computers.

In return, the firm allegedly offered $27.5 million, an additional $250,000 for his secretary, several laptops and phones, a car service for his New Jersey homes, and access to a $1,000 per month stock service by Bloomberg.

"Drapkin could care less about these promise," Kobre added.

Drapkin countered that much of his severance largely included payments for his own stocks, and that he barely noticed the computers and phones the company gave him. He claimed he threw most of the MacAndrews PCs in the trash to upgrade to Apple equipment.

Another MacAndrews attorney, Matthew Menchel, ridiculed the idea that Drapkin did not know the terms of his contract.

"You worked at two of the finest law firms in the city, if not the world," Menchel said during cross-examination, adding that he had been asked to review and interpret hundred-page documents.

"I have familiarity with contracts," Drapkin replied. "That is correct."

Though Drapkin admitted that he reviewed the separation agreement with another lawyer, he insisted that he did not enter negotiations clamoring for a big payout.

"They were my friends for 20 years," Drapkin said. "I was trying to leave on good terms."

Trial is expected to last a week.

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