Warner's Bronfman sued over buyout
NEW YORK (Reuters) - Warner Music Group Corp. (WMG.N) Chief Executive Edgar Bronfman Jr. was sued on Monday for $100 million by a former CEO of publisher Simon & Schuster who claims Bronfman failed to compensate him for conceiving the 2003 buyout of Warner.
Former CEO Dick Snyder said he helped Bronfman negotiate the $2.6 billion purchase of Warner Music from Time Warner Inc. (TWX.N), but was never paid for his services.
Snyder said Bronfman had broken a gentlemen's agreement to share proceeds from the deal, made during a Caribbean vacation with their families in 2001, according to a 44-page lawsuit filed at the Supreme Court of the State of New York County.
Lawyers for Bronfman said Snyder's claims were "absolute fiction."
"Dick Snyder did not work on the Warner Music Group transaction and there was never an agreement to compensate him for anything," Bronfman's attorney, Orin Snyder, said in a statement.
Snyder's suit says Bronfman's reputation was tarnished with Wall Street investors after the ill-fated merger of his family's Seagram business with French media company Vivendi (VIV.PA) in 2000 and he sought Snyder's participation to provide credibility as he arranged funding for the Warner deal.
The suit also claims that, after breaking off his relationship with Snyder, Bronfman took business files and a computer that was Snyder's personal property that contained evidence for any claims Snyder might have made.
Snyder is claiming at least $100 million in damages based on what he said was Bronfman's verbal promise to him for "fair and equitable" compensation. Snyder estimates Bronfman personally earned more than $500 million from the transaction, but the suit provided no basis for the figure.
Some of Snyder's claims were first reported in the New York Post on Monday.
Bronfman's attorney said in a statement the executive had provided Snyder with free office space at about the same time of the agreement in dispute.
"Dick Snyder would punish that kindness by attempting to rewrite history and try to claim compensation that is not owed him," the statement said.
(Additional reporting by Paritosh Bansal)
