In early 2005, Los Angeles billionaire Ronald Burkle met a young Italian businessman named Raffaello Follieri and quickly committed up to $105 million to a joint venture to buy surplus properties from the Catholic Church and redevelop them, the Wall Street Journal reports.
Instead of a marriage made in heaven, the Burkle-Follieri alliance has degenerated into a nasty, name-calling fight that has dragged in not only the high-profile California investor and his handsome young Italian partner, but Mr. Follieri's actress girlfriend as well. It has even touched a former president.
In late April, an investment fund that's part of Mr. Burkle's closely held Yucaipa Cos. filed suit in Delaware state court accusing Mr. Follieri and his firm, the Follieri Group, with "willfully and systematically misappropriating" at least $1.3 million of the over $55 million Yucaipa had up to that time sunk into the joint venture, Follieri/Yucaipa Investments LLC.
The suit alleges that misappropriations went to finance the 28-year-old Mr. Follieri's "personal extravagances and budget mismanagement." Among the purported extravagances: private jet travel for Mr. Follieri and his girlfriend, actress Anne Hathaway; a penthouse apartment in New York used by Mr. Follieri; "massive charges for 'five-star' lodging, meals and entertainment" as well as medical care for Follieri relatives and a dog. Additionally, the suit says, hundreds of thousands of dollars were improperly loaned to the Follieri Foundation, a nonprofit charity run by Mr. Follieri and his family.
Read the full Wall Street Journal story .(subscription required)
For reprint and licensing requests for this article, CLICK HERE.