Perelmans at War

Jeffrey filed his own suit, in federal court, just hours before Raymond filed his in state court. In sum, Jeffrey’s suit said, “Raymond is about to sue me, and you shouldn’t let him” — explaining that Raymond had been threatening to sue him for years, and that, “disturbed and weary” from this, he was forced to strike first. But his motion to seal was denied by Eastern District Judge Mary A. McLaughlin. So there now exists a public record of Jeffrey’s case, and a sealed record of Raymond’s. In a letter to McLaughlin on November 30th, Raymond’s attorney, Steve Cozen, accused Jeffrey and his legal team of disingenuousness, stating he had warned them a federal sealing order was unlikely. “It is apparent to us, regretfully, that Jeffrey does in fact want to litigate this personal family matter in the court of public opinion,” he wrote, going on to charge that Jeffrey’s counsel, Blank Rome’s James Smith, “is conducting himself as noisily as possible so as to attract attention, all the while trying to maintain a cover story proclaiming an interest in family privacy, and ‘shock’ on the part of Jeffrey that his father is upset with him.”

A thorough reading of Jeffrey Perelman’s suit, coupled with supporting court documents obtained by Philadelphia magazine, paints a picture of how a trust set up for a granddaughter degenerated 20 years later into dueling lawsuits that threaten to publicly unravel the Perelman family. The dispute over the trust centers on one allegation: Raymond’s, that he was duped.

Raymond contends that his sale of the companies to Jeffrey in 1990 — which begat the trust — carried with it terms that haven’t been carried out, and, more specifically, that Jeffrey made himself, not his child, the principal beneficiary of the trust. In an affidavit dated November 23rd, Ruth states that “Jeffrey and his wife Marsha were aware of and agreed to the arrangements as we required, that one half of the Business Interests would be transferred in trust for Alison; and I assumed that such arrangements would be carried out.” As part of her affidavit, Ruth attached the draft of a confidential memo prepared by Arlin Adams in April 2009 that outlined his recollection of the sale of Raymond’s businesses to Jeffrey, and the terms all parties agreed to. Adams recalled Raymond’s three specific conditions for the deal: that there would be no adverse tax repercussions for him; that one half of the “transferred companies” would be held in trust for Alison and any other children Jeffrey might have; and, most tellingly, “Raymond wanted to insure that Marsha, Jeffrey’s wife, would not benefit from the contemplated transfers of the stock of the companies that Raymond was transferring,” and that “Marsha would, in writing, relinquish any and all claims regarding the transferred corporations and assets.”