No New Trial for Perelman in Morgan Stanley Fraud Case

In August, when we last checked in on litigious gazillionaire Ronald Perelman, a New Jersey state court judge had just tossed his half-billion-dollar claims against the father and brother of his late ex-wife Claudia Cohen. Now Perelman has gotten equally discouraging news from a Florida state appellate court, which has rejected his attempt to revive his multibillion-dollar fraud and conspiracy case against Morgan Stanley.

That case, in which Perelman accused Morgan Stanley of defrauding him in a deal that left him with worthless Sunbeam securities, produced a classic of legal journalism, Susan Beck’s June 2006 American Lawyer cover story, “Morgan Stanley’s Recipe for Disaster,” which chronicled the litigation missteps by the investment bank and its outside counsel from Kirkland & Ellis that led to a $1.6 billion judgment for Perelman.

Boy, have things changed since Beck’s story appeared. In March 2007, a Florida appeals court threw out Perelman’s award and entered judgment for Morgan Stanley, ruling that Perelman’s damages expert hadn’t correctly calculated the harm his company suffered from Morgan Stanley’s alleged fraud. Then Florida’s Supreme Court declined Perelman’s request for review of the appeals court reversal. After the trial court formally entered judgment for Morgan Stanley, Perelman’s lawyers at Jenner & Block and Podhurst Orseck sought a new trial based on a claim that Morgan Stanley committed a fraud upon the court in pretrial discovery sanction hearings. The trial court rejected that request, and on Wednesday so did Florida’s 4th District Court of Appeal. The three-judge panel ruled that the alleged misconduct would be more appropriately addressed in criminal contempt proceedings or a Florida Bar grievance. Here’s Bloomberg’s story on the ruling.

So is it finally over for Perelman and Morgan Stanley? Bruce Rogow, of Alters Boldt Brown Rash Culmo, who argued the most recent appeal for Morgan Stanley, thinks so. He told us that Florida’s supreme court has a very limited jurisdiction. “I don’t think this case goes on any further,” he said. “They may try, but my bet is that this is the end of the road.”

Joel Eaton of Podhurst Orseck, who argued the appeal for Perelman, did not return our call for comment. Attorneys at Jenner & Block, who have represented Perelman since the trial, referred our calls to a spokesperson for Perelman, who had no comment.

This article first appeared on The Am Law Litigation Daily blog on AmericanLawyer.com.