The rich get richer.
A Florida state jury on Monday ordered
( MWD) to pay $604 million in damages to billionaire investor Ron Perelman in a dispute stemming from the collapse of
, the small appliance manufacturer, according to media reports.
The verdict in the case is another blow to Morgan Stanley, which has seen its image sullied by a highly publicized dispute with a group of former investment bankers over the investment firm's stewardship.
The jury, sitting in a courtroom in West Palm Beach, Fla., found that Morgan Stanley misled Perelman about Sunbeam's financial health when it advised him to sell his majority stake in Coleman to Sunbeam. When Sunbeam's stock collapsed in a late-1990s accounting scandal, Perelman's 14 million shares of the company's stock became worthless.
Perelman, who is married to the actress Ellen Barkin, is best-known for being chairman of the cosmetics company
. Sunbeam is now part of
, a consumer products company.
Morgan Stanley recently upped its legal reserve for the trial to $360 million.
The damage to Morgan Stanley from the trial may not be over. The same jury must still decide whether Perelman is entitled to any punitive damages.
It appeared unlikely Morgan Stanley would prevail in the case after the trial judge issued a critical ruling against the firm. The judge, in an unusual ruling, instructed the jury to assume that Morgan Stanley had defrauded Perelman, after it was discovered the firm had violated a court order to turn over documents that might have been relevant to the case.
Shortly after the verdict was announced, Morgan Stanley issued a press release saying it will appeal the verdict. The investment firm says it "has multiple grounds on which to appeal."
"The verdict, while disappointing, is not surprising, given the unprecedented and highly prejudicial rulings imposed by the trial judge," the company said in a statement. "Morgan Stanley was not permitted to defend itself on the merits. As a result, the jury heard allegations, instead of true facts, and Morgan Stanley was denied a fair trial."