U.S. billionaire Ronald Perelman has gone to Florida's highest state court to overturn an appeals court ruling that stripped him of a $1.58 billion jury award against Morgan Stanley.
The 2005 award stemmed from Perelman's accusations that the investment bank committed fraud in helping Sunbeam hide its shaky finances while arranging its $1.5 billion purchase in 1998 of Coleman, a camping equipment maker controlled by Perelman.
In papers filed Thursday with the Florida Supreme Court, Perelman said a three-judge panel of the state's Fourth District Court of Appeal in West Palm Beach erred in March, when it found that he failed to prove damages and deprived him of a retrial.
"Until this court reviews and quashes these rulings, Morgan Stanley (will) be relieved entirely of liability for the enormous damage it caused," Perelman's lawyer Joel Eaton wrote in a court filing. He was not immediately available for further comment.
Morgan Stanley spokesman Mark Lake said the investment bank intends to respond within 20 days. "We are hopeful that the Florida Supreme Court will deny review of the Fourth District's decision," he said.
Perelman received 14.1 million Sunbeam shares as part of the buyout of Coleman, an appliance maker. The shares became worthless after Sunbeam fired the chief executive, Al Dunlap, and admitted it inflated sales to boost earnings. In 2001, Sunbeam went bankrupt.
A jury awarded Perelman $604 million in compensatory damages and $850 million of punitive damages. The total rose to $1.58 billion with interest.
But in a 2-1 decision, the appeals court said Perelman failed to prove damages because he did not show what Sunbeam would have been worth absent fraud.
In his appeal, Perelman said punitive damages for fraud are warranted even if he used the wrong method to show compensatory damages. He also said the case could been retried using a different means to compute damages.
Perelman also said a decline in Sunbeam shares because of the fraud could have been expected, and that he should not be required to rule out other possible causes. "In such a closely watched case arising out of one of the most massive frauds in Florida history, it cries out for correction," Eaton wrote.
The latest appeal came one month after the Fourth District rejected Perelman's bid for review by that court's 12 judges, according to court records.
During the jury trial, Judge Elizabeth Maass grew fed up with Morgan Stanley's failure to produce e-mails in the case. She ordered the jury to assume the investment bank and Sunbeam conspired to defraud Perelman, effectively shifting the burden of proof.