The Perella Weinberg case went to trial ten years later

Wall Street’s elite are lining up to testify in the highly-anticipated case starting Friday of the star executive who says he is plotting to launch a rival firm to the Perella Weinberg Partners decision a decade ago.

PPP founders Joe Perella and Peter Weinberg will tell a New York court that they discovered a secret plan by Michael Cramer, the founder of the bank’s restructuring practice, along with high-flyer Robert Steele, along with three of its closest rival firms. Colleagues.

PWP fired Kramer and his alleged associates via voicemail in February 2015 after discovering a conspiracy to violate their employment contracts. His resignations cost the bank tens of millions in lost earnings, illegal bonuses and expensive replacements, he says.

Cramer said PWP’s leadership was tainted by long-standing animosity against him and determined to drive him and others out of the organization to seize $60mn in fees and equity, which Cramer now wants back.

The amount of bad blood between PWP and Cramer has so far prevented financial institutions from reaching a settlement in a case closely watched to understand the status of non-compete clauses in employment agreements, which have faced criticism in recent years as unfair restrictions. Business.

“The thing that doesn’t compete more than anything else is if it’s smarter,” said Jeffrey Illender, a partner at Schlam, Stone & Dolan, who was not involved in the case. “Companies that rely on relationships or sales are very aggressive in enforcing them.”

In a preliminary ruling, the judge overseeing the case ruled that non-competition clauses remain permitted in New York through 2023.

Among the main issues of the court proceedings is an examination of PWP’s actions against Kramer’s clients in the days after the termination.

Witnesses supporting Cramer’s account include a Monsanto executive, the chemical group he has worked with for a long time, who testified that he was more interested in getting revenge on Cramer than serving Monsanto’s interests after PWP was terminated.

Kramer’s lawyers are set to question PWP’s former communications chief in what he says is a covert media campaign to discredit the ousted executives.

Kramer separately beat claims that Monsanto and one other PWP solicited its customers improperly in the months after 2015.

According to PWP, Kramer and his restructuring colleagues, many of whom had been working with multiple firms for several years, had been plotting for months to launch rival firms.

Among the documents found in the discovery were a branding consultant’s pitch book, as well as business plans and spreadsheets for compensation and equity contracts for a hypothetical firm.

One email between Cramer and two of his partners, Deron Sloneker and Joshua Scherer, reminded him of KKR, the private equity group they wrote about when they considered naming the company KSS.

PWP later learned that after Cramer announced his resignation in early 2015 after having dinner with Weinberg, some of Kramer’s restructuring colleagues met for “celebratory drinks.”

Perella, 83, is a pioneering M&A dealmaker, while Weinberg, 67, comes from a family that has led Goldman Sachs for generations. Steele, 73, is a longtime Goldman banker and former deputy mayor of New York City who regularly advises the likes of BlackRock founder Larry Fink.

Yet the star witness in the trial may have been Kevin Kofsky, a junior executive at PWP a decade ago who was in his thirties and worked with Kramer early in his career.

Kofsky attended a Sunday meeting in January 2015 at Kramer’s Connecticut home where about 10 members of the current PWP restructuring team gathered.

Kofsky told PPP management weeks later that the purpose of the meeting was to promote the creation of a rival organization.

Kramer, in his court filing, embellished his story after Kofsky was offered a $500,000 bonus and the chance to lead PWP’s restructuring team after Kramer was ousted.

PWP described the dispute as a “textbook supplement case”. But Cramer’s court filings show that each of the eight reformed banks from the PPP that joined his new firm, Dussehra Partners, in 2015 testified under oath that Cramer did not ask them to form new ventures or join him in a new firm. They were employed by PWP.

Kramer insisted he was a target of Vendetta, at which point Weinberg sought to bring him “back into the fold,” a phrase in an internal PWP email.

“PWP alienated the restructuring team that Kramer led and built from scratch, underpaid them, gave them poor year-end reviews, and made it clear that their prospects for advancement at PWP were slim or non-existent,” Kramer wrote in court papers. He said his team was “dismissed rudely” before any of them could decide for sure if they wanted to go.

PWP was established in In 2006 it was with great acclaim given the pedigree of its founders. Cramer was brought in quickly to start a restructuring practice after previous stints at Houlihan Lokey and Greenhill & Co.

Cramer’s status as a PWP affiliate, he said, made it largely unbreakable.

Kramer Dussehra Partners Since 2015, it has become one of the leading restructuring consulting firms, with revenues approaching $150 million last year with less than 50 employees, a person with knowledge of the business.

The firm is adding to traditional M&A coverage last year by hiring Goldman Sachs heavyweight John Vaske, who was a Weinberg partner last year.

PWP rebuilt its restructuring team after Cramer’s departure, and the company listed its stock in 2021. Its stock price has doubled in the past year and its market capitalization is now roughly $2 billion.

In the year Kofsky, a PPP banker who was found at a meeting at Kramer’s home in early 2015 and later defected to Dussehra, remains with the PWP.

The trial is scheduled to last three weeks.