Yana Paskova for The New York TimesRonald O. Perelman, the chairman of MacAndrews Forbes, was once one of the country’s most successful corporate raiders.
Gabrielle Piedmonte/PatrickMcMullanDonald Drapkin was a deal maker for Ronald Perelman.
Ronald O. Perelman’s marital breakups — divorces from the actress Ellen Barkin and Patricia Duff among them — have been rich fodder for the gossip pages. Now a split with a longtime business associate promises to be almost as acrimonious.
The former associate, Donald G. Drapkin, and Mr. Perelman are headed to a federal courtroom in Manhattan next week in a dispute over roughly $20 million. The court battle provides a rare window on the pay, perks and behind-the-scenes politics in the world of deal-making.
For years, Mr. Perelman, who is 69, and Mr. Drapkin, 63, worked together at MacAndrews Forbes, Mr. Perelman’s holding company. Mr. Drapkin was one of Mr. Perelman’s top deal makers, helping structure some of his biggest acquisitions like Marvel comics, Revlon and AlliedBarton Security Services. Over time they became close friends.
They even had private nicknames for each other. Mr. Drapkin said in a deposition that he felt he was one of Mr. Perelman’s only “real” friends and that he “loved” his former boss.
Along the way Mr. Drapkin was paid well over $200 million during his 20 years at the firm, according to information in court documents and people with knowledge of his compensation. And when he left MacAndrews Forbes he received an additional $27.5 million as well as a package of perks that included the continued use of a driver and a Bloomberg terminal.
Mr. Drapkin contends that he is still owed about $20 million from that separation.
While $20 million is certainly worth fighting over, it is a relatively small sum for the likes of Mr. Perelman, whose net worth is estimated to be more than $12 billion. Mr. Drapkin’s net worth is not known, but based on his compensation during his years working for Mr. Perelman he too is well off. He left MacAndrews Forbes to join Lazard and now runs the hedge fund Casablanca Capital.
Still, as is often the case in these situations, the fight is not just about the money.
Mr. Perelman says his former friend breached his separation agreement by disparaging him. He also claims that Mr. Drapkin abused the health care coverage he was offered in the separation agreement, encouraged a top staff member to leave MacAndrews Forbes and left the company with documents he had promised to turn over.
Kathy Kantor/Berliner Studio, via Associated PressPatricia Duff was the third wife of Ronald Perelman. They are shown here in 1996. They were married for a year and a half.
Mr. Drapkin, who filed the initial suit in early 2009, denies all these claims, saying in court papers that his case is “a blatant case of breach of contract” made more egregious by the close friendship the two men once shared.
People with knowledge of Mr. Drapkin’s thinking say the executive feels that he has done nothing wrong and is upset Mr. Perelman will not honor the deal.
As for Mr. Perelman, people who know his thinking say he feels Mr. Drapkin has taken advantage of him and violated the separation agreement, leaving him no choice but to fight Mr. Drapkin.
The lawsuit has caused a flurry of legal activity and at least one prominent effort to broker a peace. In early 2009, the Wall Street deal maker Bruce Wasserstein sent Vernon E. Jordan Jr., a confidant of former President Bill Clinton, to talk to Mr. Perelman about a settlement. Mr. Perelman told Mr. Jordan that Mr. Drapkin had been “a naughty boy,” according to testimony by Mr. Drapkin. “At that point I decided that this wasn’t going anywhere,” Mr. Drapkin said, and he filed his lawsuit.
Last September, Judge Paul G. Gardephe weighed in, saying that while some of Mr. Perelman’s claims were without merit, a jury should decide whether Mr. Drapkin had failed to return certain documents related to his work with Mr. Perelman and whether he had tried to persuade a crucial employee to leave. Jury selection for the case is scheduled for Monday in United States District Court in Manhattan.
Formerly a partner with the law firm of Skadden, Arps, Slate, Meagher Flom, Mr. Drapkin joined MacAndrews Forbes in 1987 as a vice chairman. He quickly became a central deal maker for Mr. Perelman and worked on many of his biggest transactions during the days when Mr. Perelman gained a reputation for being one of the country’s most successful corporate raiders.
In recent years, however, Mr. Perelman became ”dissatisfied” with Mr. Drapkin’s performance, according to a deposition.
In April 2007, Mr. Drapkin left MacAndrews Forbes and soon landed at Lazard, the investment bank.
Paul Hawthorne/Getty ImagesThe actress Ellen Barkin married Mr. Perelman in 2000 and was his fourth wife. They were divorced in 2006.
Mr. Perelman gave him a glowing send-off. ”Don was a dynamic force in the development and leadership of our firm,” the billionaire said in a news release. “He is not only a close friend, but a wise counsel to me and our team, and he is joining an exceptional leadership team at Lazard. He has done a terrific job for us and we will miss him.”
MacAndrews Forbes, according to the separation agreement filed with the court, agreed to pay Mr. Drapkin $27.5 million for five years and his medical bills “not otherwise reimbursed” through other medical plans until his 65th birthday.
Mr. Drapkin also had a number of obligations under the agreement. He agreed to turn over various company-related documents, not to disparage his former employer or its management, and not to poach any of its current employees.
Once at Lazard Mr. Drapkin chose not to join the firm’s health care plan, something that ruffled feathers at MacAndrews Forbes. He found his benefits at MacAndrews Forbes had been cut off when an attempt was made to fill a prescription for his wife. In 2008, Mr. Drapkin billed more than $100,000 in medical expenses because of a serious illness in his family, according to court documents.
And just a few weeks after he left MacAndrews Forbes, he met a friend who still worked for the firm for dinner, a meal that is now under a legal microscope. A senior MacAndrews Forbes executive, Eric Rose, testified that Mr. Drapkin had made “denigrating” remarks about Mr. Perelman at the dinner at Quality Meats in Midtown Manhattan and encouraged him to leave McAndrews Forbes.
“I recall comments on Don’s part denigrating Ronald as a person,” he said in a deposition. “Denigrating MacAndrews as a workplace and his advising me that he thought that my staying long term at MacAndrews was not a good idea.”
Still, MacAndrews Forbes initially honored the agreement, making two $2.25 million payments in 2008.
It did not, however, make the first payment in 2009, prompting Mr. Drapkin to file suit.
Once this legal salvo had been fired, Mr. Perelman claimed that Mr. Drapkin had not turned over crucial company documents as required. Judge Gardephe, in his ruling last September, said the two sides had agreed that after the litigation commenced, 849 e-mails and 79 other company documents were found on the laptop computer of Mr. Drapkin’s assistant. Mr. Drapkin testified that his assistant had deleted a lot of documents and he was unaware any work product left.
In testimony, Mr. Perelman has tried to distance himself from Mr. Drapkin, even saying that the quote from him in the 2007 news release was “a very generous interpretation” of the truth.
He contends that Mr. Drapkin asked McAndrews Forbes to include a “puff quote” and “that’s what it is.”
Toby Lyles contributed reporting.
Donald G. Drapkin v. Mafco Consolidated
MacAndrews Forbes v. Donald G. Drapkin
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