News
June 24, 2005

A Florida judge yesterday awarded Jenner & Block client Coleman (Parent) Holdings Inc. (“CPH”) prejudgment interest of $207 million against Morgan Stanley & Co. following a verdict of $604.33 million in compensatory damages and $850 million in punitive damages awarded by a unanimous Florida jury in May 2005.

The Court entered final judgment in the amount of $1.58 billion against Morgan Stanley for allegedly aiding and conspiring with Sunbeam Corp. to defraud CPH into selling CPH’s interest in The Coleman Co. Inc. to Sunbeam, a client of Morgan Stanley.  The amount of the final judgment was reduced by the Court to take into account prior settlements reached with other participants in the fraud.

The lawsuit centered on a 1998 transaction in which CPH, a holding company controlled by Ronald O. Perelman, sold its 82% stake in Coleman to Sunbeam for $1.3 billion, including 14.1 million shares of Sunbeam stock that had an expected value in excess of $600 million.  Shortly after the transaction closed, the Sunbeam fraud was uncovered and the value of Sunbeam’s stock plummeted.

After a six week trial in the Palm Beach County Circuit Court, the nine-member jury found by clear and convincing evidence that CPH relied on Morgan Stanley’s representations concerning the business and financial condition of Sunbeam and CPH suffered damages of $604.33 million.  The jury also found by clear and convincing evidence that punitive damages were warranted for Morgan Stanley’s conduct.  Before trial, the Court entered a partial default judgment against Morgan Stanley as a result of serious litigation misconduct, including a failure to disclose the existence of and produce e-mail.

The Jenner & Block legal team representing CPH includes: Partners Jerold S. Solovy, Ronald L. Marmer, Robert T. Markowski, Paul M. Smith, Robert L. Byman, C. John Koch, Michael T. Brody, Timothy J. Chorvat, Jeffrey T. Shaw, Deirdre E. Connell, Sam Hirsch, Suzanne J. Prysak, and Jeremy M. Taylor; Associates Margaret J. Simpson, Denise Kirkowski Bowler, Kathleen R. Hartnett, Christopher M. O’Connor, Joanne Hannaway Sweeney, Stephen P. Baker, Brian Hauck, Thalia L. Myrianthopoulos, Ayodele T. Carroo, Wade B. Gentz, Benjamin J. Keith, Luke C. Platzer, and Jessica Ring Amunson.

Please click here to view the judge's final Order.