Celebrity concierge service sues Goldman Sachs in row over $7bn deal

Celebrity concierge service sues Goldman Sachs in row over bn deal

A Hollywood enterprise supervisor whose purchasers have included Madonna and Drake has sued Goldman Sachs alleging it tricked him into handing over enterprise secrets and techniques as a part of an effort to agree a $7bn take care of a personal fairness agency.

Present enterprise impresario Mickey Segal’s lawsuit focuses on the Wall Avenue financial institution’s position when Clayton, Dubilier & Rice, the New York-based buyout group, bought Focus Monetary Companions, a listed wealth administration agency, in February.

Segal had employed Goldman to promote his movie star concierge service, a a lot smaller agency referred to as NKSFB, which has beforehand obtained funding from Focus. In a lawsuit filed in Los Angeles county courtroom final week, he accused Goldman of “secretly dealing behind [his] again” by “store[ping] round” a proposed sale of the bigger agency as effectively.

Anybody “all in favour of buying [NKSFB]”, Segal’s attorneys complained, “could also be much more all in favour of buying the bigger agency”.

The messy dispute, involving a number of high Wall Avenue corporations, reveals how the lives and enterprise affairs of top-flight entertainers have created profitable alternatives for cash managers and fixers working in rarefied circles the place discretion is extremely prized.

Segal offered a majority financial stake in NKSFB to Focus shortly earlier than the latter’s 2018 preliminary public providing. On the time, the bigger firm was looking for to department out from its core enterprise of shopping for stakes in wealth administration boutiques. It was drawn to NKSFB, which co-ordinates the general public appearances of its high-profile purchasers, in addition to serving to to purchase their vehicles and homes, rent their cooks and nannies, file their taxes, pay their payments, and submit their medical claims.

Final yr, nonetheless, Segal and his companions determined they needed to half firm with Focus. They employed Goldman to discover a sale of the enterprise, unaware that Goldman was concurrently engaged on a deal to take Focus non-public.

Segal labored with Goldman to pitch NKSFB to no less than a dozen potential suitors over a number of months. At one assembly, held in December, Segal sought to impress executives from KKR with a shopper roster that features entertainers who’ve performed the half-time present in 13 of the previous 15 American soccer Tremendous Bowls, in accordance with two folks conversant in the alternate.

KKR didn’t bid however 5 different would-be acquirers finally submitted provides for NKSFB, every providing tons of of hundreds of thousands of {dollars}. However CD&R’s $7bn deal to take Focus non-public, introduced in February, prompted Segal to sue Focus and Goldman, and has thrown the public sale of his personal firm into disarray.

In an alternate of emails, reproduced in courtroom filings, Segal instructed Focus co-founder Lenny Chang that an “amicable assembly” was inconceivable. He instructed shopping for again Focus’s share of NKSFB “at a considerable low cost”, saying it “could be the solely technique to cease a nuclear conflict”.

However Chang wrote: “We’d not promote at a reduction.”

Focus maintains that it was not looking for to cease the sale of NKSFB. In a letter, a Focus lawyer instructed Segal that “the gross sales course of ought to be shifting to the second spherical, however has been delayed by your disruptive actions”.

Focus mentioned in an announcement that Segal’s lawsuit was with out benefit, and accused him of “making an attempt to make the most of Focus’ pending go-private acquisition to extend the economics he derives from the Focus partnership”.

Goldman mentioned it had acted pretty and actually, and in addition dismissed the lawsuit as meritless. “[We] had each incentive to attain the perfect outcomes for each our purchasers, and it’s absurd to recommend in any other case,” the financial institution added.

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