So who's John Doe?
In Los Angeles financial circles, that was a parlor game played last week, much as Washington insiders have long ruminated about the true identity of "Deep Throat," the man who leaked details about a troubled Nixon White House to reporters Woodward and Bernstein.
In this case, John Doe is an individual who on Aug. 7 filed a lawsuit against Gary Winnick, the Beverly Hills-based financier and founder of the telecommunications giant Global Crossing Ltd.
In the suit, Doe claims that in 1993 he and Winnick were partners, and that Winnick verbally promised him a 15 percent stake in telecommunications enterprises that were then fledgling operations run under Winnick's umbrella company, Pacific Capital Partners.
The suit alleges that the 15 percent stake has been wrongfully denied to Doe.
Winnick had started Pacific Capital in 1985, after splitting off from Drexel Burnham Lambert, the now-defunct securities brokerage, where he was a right-hand man for junk bond king Michael Milken.
Early investors in Pacific Capital were Milken, other Drexel entities, and the Bass family of Texas. Pacific Capital in the 1980s bought junk bonds, and took positions in takeover situations involving public companies.
After Milken went to prison on insider trading charges in 1990, Pacific Capital invested more widely, at one point owning RB Furniture, the old furnishings chain that has since closed. In the mid-1990s, Winnick told reporters that Milken was no longer involved with Pacific Capital and hadn't been for a while.
In 1993, Winnick's purported promise to John Doe, described in court papers as a handshake agreement, might have been no big deal. But today, Winnick's Global Crossing is worth $24 billion on Wall Street, and is a rapidly growing, publicly traded company with undersea cable and land-based networks girdling the globe. As a result, Winnick is now one of the wealthiest people in Los Angeles.
The suit describes Global Crossing as a successor entity to the Telecommunications Development Corp., in which Doe had the alleged stake.
Winnick's lawyers and public relations spokesmen expressed indignation last week that such a suit was even filed. Marshall Grossman, the high-profile lawyer retained by Winnick to fight the allegations, was reached by telephone in a New York City hotel room and reiterated that he is "outraged" by the suit and confident it would be dismissed by whatever judge handles it in Los Angeles Superior Court.
Grossman also promised to launch a legal counteroffensive against those responsible for the suit.
Grossman's sentiments bring to mind earlier press descriptions of him as a "golem" a mythic figure in Yiddish literature, a creature of stone who pursued an enemy relentlessly after having the adversary's name written on his forehead.
Michael Sitrick, well-known financial public relations guru who has been on retainer for Winnick for some time, criticized the legal action as a "suit by somebody who can't even identify himself."
Both Grossman and Sitrick ruled out Michael Milken as being the John Doe. John Doe's lawyer, Allan Browne of the Beverly Hills law firm Browne & Woods, also ruled out Barry Porter and David Lee, former top-level executives at Global Crossing, as being the John Doe.
"I can rule out those three," he said, referring to Milken, Porter and Lee. "But don't ask me any more names, as I will have to refrain from comment."
Porter and Lee recently left Global Crossing to join a new $1 billion venture fund with local financiers Stephen Rader and Rudy Reinfrank, known as Clarity Partners. There is said to be tension between Winnick and the two departees, but no suits.
Another name that arose last week was that of Llewellyn "Lew" Werner, who worked with Winnick in the mid-1990s, is tight with the state Democratic Party, and helped bring Ullico (Union Labor Life Insurance Co., a Washington, D.C.-based union investment vehicle) into Winnick's shop as an investor. Browne declined to comment on Werner, who left Winnick on less-than-loving terms. Werner could not be reached for comment.
Browne said that John Doe has "very practical" business reasons for shielding his name. Those reasons would become clear early in a trial, as would the identity of Doe through depositions and other evidence.
Browne said that local courts usually handle business litigation within a 12-month period, so he expects the trial to start by next summer, with a settlement possible before then. A source in the Winnick camp said the telecom titan "won't give Doe a penny."
The law firm of Browne & Woods is known as a boutique business litigation firm, with 14 lawyers. It has had many large clients, including ITT Industries Inc., Carnation (a subsidiary of Nestle SA), Chicago Title, and even some Hollywood types, such as producer Aaron Spelling. Browne also has been active in Democratic Party circles.
Co-counsel on the suit on the plaintiff's side is the San Diego law firm of Milberg Weiss Bershad Hynes & Lerach, known for its suits against publicly traded companies.
In financial circles last week, the betting was that Doe had a pretty weak leg to stand on.
"A verbal agreement in 1993? I don't think he (Doe) is going to get very far with that," said Mike Brown, a former Drexel moneyman who is now an investment banker with Sutro & Co. Inc. in West Los Angeles. "Why did he wait seven years to file it?"
Los Angeles-based FMiTV, maker of live Internet programming, said it received an equity investment in the $2 million to $4 million range from two Japanese radio stations, Tokyo Fm and JFN.
The investment is part of a strategic partnership agreement that allows the radio stations to carry programming from FMiTV's family of iSuperstations, including KIISFMi.com...
West Los Angeles-based Goldman, Lichtenberg, Wasserman & Grossman, a firm specializing in personal financial management for very high-net worth individuals, including many entertainers, was recently bought by The Chase Global Private Bank, an arm of The Chase Manhattan Corp.
Tracy Alpert, a banker with Century City-based Houlihan Lokey Howard & Zukin, helped engineer the sale. Alpert said last week that many other personal financial management firms are seeking mergers. "We have gotten a lot of calls since we did this transaction," he said. "It's a good time to sell."
Contributing columnist Benjamin Mark Cole writes about the local investment community for the Los Angeles Business Journal. He can be reached at email@example.com.
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