Morgan Stanley Sues Haim Saban
Yellow Lightning
Tue Feb 26 19:32:59 2002 GMT
NEW YORK (Reuters) - Morgan Stanley says one of its billionaire clients owes
the firm some $12 million for advice it provided him when he sold his stake
in a cable channel last October.
The Wall Street firm on Monday filed suit against Haim Saban, who became one
of the country's richest men after he, along with News Corp. (NCP.AX), sold
Fox Family Worldwide, a children's-programming channel, to Disney for $3
billion and the assumption of $2.3 billion of debt.
Saban claims he hired Morgan Stanley to sell his 49.5 percent stake in the
channel to News Corp., a deal that never transpired. Saban contends Morgan
Stanley had no hand in the Disney deal.
"Morgan Stanley did not perform services on the transaction that occurred or
otherwise bring value to the transaction," a spokeswoman for Saban said.
"While Mr. Saban understands Morgan Stanley's desire to receive a windfall,
his agreement with Morgan Stanley related to a different transaction."
Morgan Stanley, in a suit filed in Los Angeles Superior Court, contends that
it was hired by Saban to advise on any sale of his Fox Family stake. The
firm seeks about $11.9 million in advisory fees and an undisclosed amount in
damages.
In late 2000, Saban and Morgan Stanley negotiated an agreement in which he
agreed to pay between $9 million and $15 million in advisory fees to Morgan
Stanley, depending on the price he got for his Fox Family stake, the
complaint said.
Saban wound up striking a handshake agreement with News Corp. Chairman
Rupert Murdoch and Disney chief Michael Eisner in July 2001 to sell Fox
Family to Disney, the complaint said. Saban's stake was worth $1.4 billion
when the deal closed in October.
Morgan Stanley said in its complaint that Saban in August told Morgan
Stanley he felt obligated to pay Ed Aboodi and Alpine Capital, who had
helped advise him on the Disney deal. He proposed that Morgan Stanley split
its fee in half so he could pay the other advisers. The investment bank
declined, and Saban never paid Morgan Stanley anything, the complaint said.
(Additional reporting by Brian Kelleher)
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