Now Morgan Stanley has another fight on its hands, and it all comes down to its failure to settle when it could have--or still might.
Morgan Stanley said it's appealing Monday's $604 million jury verdict in a case brought by billionaire Ron Perelman, who claimed Morgan Stanley misled him in 1998 when he was selling a substantial stake in one of his companies in exchange for shares of Sunbeam Corp. But it may still be seeking some settlement.
The problem is that now the floor of that settlement may well be $604 million. With the potential for triple punitive damages, Morgan Stanley faces a $2.45 billion liability in the case as the penalty phase kicks off.
But sources close to Perelman say the judge asked them to seek some kind of settlement a week ago. Now, the jury verdict may very well concentrate Morgan Stanley's mind.
"We believe a nine-figure settlement is the most likely outcome," says David Trone, an analyst at Fox Pitt Kelton. "Before the sanction, we expected a mere eight-figure settlement."
Details here from Forbes via LawFuel.com.