WEST PALM BEACH, Fla. -- Morgan Stanley must pay billionaire financier Ron Perelman more than $1.4 billion in damages, awarded by a jury that said it found clear evidence the investment firm acted fraudulently in Perelman's 1998 sale of his Coleman camping gear company to Sunbeam Corp.
The jury deliberated for nearly four hours yesterday before deciding on $850 million in punitive damages. On Monday, the same jury awarded Perelman compensatory damages of $604.3 million.
Perelman, the Revlon cosmetics chief, had sought $1.8 billion in punitive damages.
''This award should send a clear message to Morgan Stanley about what constitutes professional and ethical behavior," Perelman's company said in a statement. In a statement, Morgan Stanley chief executive Philip J. Purcell said the court ''has done a great injustice to the employees and shareholders of Morgan Stanley. ''We will fight to have this decision overturned and we fully expect to prevail," Purcell said.
Sunbeam filed for bankruptcy protection in 2001 after its financial troubles were discovered, and Perelman alleged he had lost millions because Sunbeam stock he received in the deal plunged in value.
US District Judge Elizabeth Maass ruled before the trial began that Morgan Stanley helped Sunbeam, an investment banking client, defraud investors. As a result, Perelman had to prove only that he relied on the fraudulent statements when deciding to sell Coleman.
Morgan Stanley contends Perelman benefited from the deal because he pocketed $160 million in cash.