News
May 18, 2005

A unanimous Florida jury awarded Jenner & Block client Coleman (Parent) Holdings Inc. (“CPH”) $604.33 million in compensatory damages and $850 million in punitive damages against Morgan Stanley for aiding and abetting 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 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.