BRONFMAN SUED FOR $100 MILLION BY EX-PARTNER
Former Simon & Schuster chief Richard Snyder has sued Bronfman for $100 million for acting “dishonorably and unlawfully” by reneging on a promise to compensate him for helping him with his $2.6 billion acquisition of Warner Music Group three years ago.
The lawsuit states that, after abruptly severing his relationship with Snyder, who provided him with an office, Bronfman misappropriated business files and a computer that was Snyder’s personal property.
The WMG Chairman/CEO also “caused [WMG employees] to wrongfully tamper with Snyder’s computer, rendering it incapable of retrieving e-mails, business records and other materials relevant to the claims” in violation of the New York Penal Code.
The lawsuit, filed in the Supreme Court of the State of New York, seeks at least $100 million in damages, based on Bronfman’s promise to Snyder of “fair and equitable compensation” for his role in helping him acquire WMG, which earned Bronfman more than $500 million from the transaction.
Snyder’s complaint cites Bronfman’s “failure of character that may help explain his vast record of business failures,” including the billions of dollars of losses to his family’s fortune.
Bronfman originally approached Snyder in 2001 to help him find strategic acquisitions and investments. That partnership culminated in the acquisition of WMG, a deal proposed by Snyder and facilitated by the exec’s access to top-level business and financial relationships, according to the lawsuit.
Even before the Warner Music acquisition, Snyder suggested merging the company with EMI, arranging for a secret meeting that lasted nearly five hours at his country house between Bronfman and EMI’s Eric Nicoli.
"Even though Nicoli had agreed that Bronfman could become Chairman/CEO of the merged entity, Bronfman was still uncomfortable," according to the lawsuit. "He insisted on getting absolute assurances that the newly constituted board could not terminate him. Snyder told Bronfman that demanding such an assurance was unreasonable and...unenforceable."
Bronfman recuited Snyder during a meeting in Anguilla in Dec. 2001 to be his "right hand" and "principal advisor... his consigliere." Since they were both honorable men, Bronfman said they would not need a written contract.
When Snyder suggested a written memorandum, Bronfman replied: "You can trust me. I promise that I would always be fair and equitable. I'm a man of my word. You can count on that."
Over the course of their partnership, Snyder and Bronfman worked in offices 25 feet apart. When the WMG deal was completed, Snyder asked Bronfman for his "fair and equitable distribution." Bronfman replied: "I would have made this deal with or without you."
In the lawsuit, Snyder contrastes his hard-earned business relationships with Bronfman, whose "climb to the top did not derive from any achievement beyond the fact of his birth."
"Given his track record, Bronfman lacked the capacity and sound business judgment necessary to conceive of or consummate the acquisition of WMG on his own," concludes the suit.
The filing also criticized Bronfman's past business failures: "After overseeing the collapse of his family's fortune, which his attempt to create a global media conglomerate resulted in a colossal business failure, Bronfman desperately sought redemption" by turning to Snyder, who had a reputation as a tough manager and savvy dealmaker as Chairman/CEO of Simon & Schuster.
In June 2006, Snyder finally succeeded in regaining custody of his computer, which Bronfman had kept from him for nearly two years. The exec’s forensic experts determined that Bronfman had his people wrongfully tamper with it, rendering it incapable of retrieving any date related to his claims.
Bronfman is being charged with computer trespass and tampering, both class E felonies, as well as criminal possession of stolen property.
