Tuesday, August 9, 2011

Randy Lerner, Told He "Cannot Win" Legal Battle, Wins Anyway

Posted By on Tue, Aug 9, 2011 at 1:54 PM

Mr. Paige to Mr. Lerner: You cannot win . . .  your opinion is irrelevant.”
  • Mr. Paige to Mr. Lerner: "You cannot win . . . your opinion is irrelevant.”

Randy Lerner — the Brown's moneybags owner, Hampton enthusiast, and futbol fan — is stuffing some of his ample fortune back into the piggy bank after an ugly courtroom brawl with a former business associate. For a guy with two sports franchises and estimated $1 billion net worth, the money involved was fairly small change, somewhere in the ballpark of $40 million. But Lerner must have picked up some of that gridiron (or, yeah, pitch) mentality, because the Browns boss didn't back down until he'd crossed the end zone, landing a court ruling in his favor.

The standoff was between Lerner and Paige Capital Management, a hedge fund run by husband and wife Michele and Christopher Paige, according to Bloomberg. The fund opened up shop in 2006, founded to gobble up companies felled by the tough times. Lerner added his $40 million to the pot, but evidently he was the only outside investor in the game. After few years, the Paiges allegedly were playing tight-lipped about where the cash was going, so Lerner made it known he wanted to pull his share.

The couple sued the media-shy Lerner, arguing he couldn't walk from the arrangement because his money represented more than 20 percent of the fund. In March 2010, Christopher Paige started tossing around some tough-guy talk that — considering what was to come — ranks as pretty moronic.

Via Crain's Cleveland Business:

“(W)e are fully prepared to litigate this matter to the bitter end because we will continue to manage your money, and collect management and incentive fees, until this matter is resolved many years hence,” Christopher Paige, Paige Capital's general counsel, wrote in a March letter contained in court filings, according to “You cannot win because you will spend more litigating than we're fighting over … we decide the best way to protect the funds, and your opinion is irrelevant.”

(This letter was sent the same month Paige bailed out on his stab at the Republican nomination for a Pennsylvania congressional seat, so maybe he was just feeling a bit grouchy) That warning didn't work. Lerner, like a true OG, didn't slink off, and later swatted away a puny $3 million settlement offer thrown out by the couple this year.

Last week, a Delaware Judge ruled the Paiges must return the remainder of Lerner's $40 million investment. The court also said the couple had improperly refused to return the funds in order to keep the management funds a-flowing, which Paige pretty much admits to in his March 2010 letter.

And the lesson, Brown's fans? Tell Randy Learner he “cannot win,”go ahead, try it, see what happens.

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