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Perella Weinberg Sues Former Partners Over Rival Venture
The boutique investment bank Perella Weinberg Partners sued four of its former partners on Tuesday, formally accusing them of trying to form a rival corporate restructuring shop while still employed by the firm.
In the complaint, filed in New York State Supreme Court, Perella Weinberg said that the four — Michael A. Kramer, Derron S. Slonecker, Joshua S. Scherer and Adam W. Verost — violated the terms of their employment contracts by trying to lure other members of their team to their new firm, now called Ducera Partners.
“The individual defendants did not merely intend to leave PWP and compete fairly,” lawyers for Perella Weinberg wrote in the complaint, referring to the firm’s acronym. “They intended to damage PWP by decimating the restructuring group and eliminating PWP’s ability to compete in the restructuring business for an uncertain period of time.”
The lawsuit escalates a monthslong struggle between the two sides, begun when Perella Weinberg first fired Mr. Kramer and his colleagues for “violating their partnership and employment agreements.” The firm and the former bankers had been in negotiations over a potential settlement.
Mr. Kramer first joined the nine-year-old firm when it acquired his corporate restructuring business, Kramer Capital Partners. While at Perella Weinberg, he worked on matters like the bankruptcy of Twinkies maker Hostess Brands and the out-of-court financial reorganization of Barneys New York, the luxury department store.
According to the complaint, Mr. Kramer began weighing a potential departure last October after having been stripped of a management title. By January, it said, he had begun working with Mr. Slonecker, Mr. Scherer and Mr. Verost in creating business plans and compensation documents — and then trying to poach other staff members in the group.
On Jan. 11, several senior members of the Perella Weinberg restructuring team attended a meeting at Mr. Kramer’s home in New Canaan, Conn., to discuss forming a new firm. (One of the executives at the gathering, Kevin M. Cofsky, did not leave and is still a managing director at Perella Weinberg.)
According to the complaint, Mr. Slonecker essentially said that because the goal was for the entire restructuring team to leave, the poaching would not violate the firm’s employment contracts because the boutique investment bank would no longer have a restructuring team.
By February, Perella Weinberg learned of the men’s plans and fired them.
Perella Weinberg is asking the court to declare the nonsolicitation provisions in its employment contracts enforceable, as well as for unspecified damages, in part because, the firm says, it lost potential clients because of the imbroglio.
Ducera is now in business, with clients like a group of hedge funds that own debt issued by Puerto Rico, according to the complaint and news reports.
A spokeswoman for Perella Weinberg said in a statement: “Mr. Kramer and his partners’ active recruitment of Perella Weinberg Partners employees and clients for their new venture was a clear violation of their partnership and employment agreements, which resulted in their termination for cause. While our efforts to negotiate a settlement on this matter have been unsuccessful, we will continue to protect and enforce our rights under our agreements.”
Lisa Solbakken, a lawyer for Ducera and the defendants, said in a statement: “PWP’s suit is prophylactic nonsense that it hopes will distract from Joe Perella’s perfidy. We look forward to taking Mr. Perella’s testimony under oath and exposing the hypocrisy that’s come to mark his firm.”
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