Sculptor Capital Management is resisting founder Dan Och’s demand for records and documents related to its proposed merger with Rithm Capital Corp., accusing him of making false claims about the deal as he pursues a “vendetta” against the firm.
(Bloomberg) — Sculptor Capital Management is resisting founder Dan Och’s demand for records and documents related to its proposed merger with Rithm Capital Corp., accusing him of making false claims about the deal as he pursues a “vendetta” against the firm.
The $34 billion money manager responded to Och and his allies late Tuesday, saying the group lacks valid grounds to obtain the information.
“The demand is nothing more than a pretext for Mr. Och and his colleagues to continue their years’ long campaign against the company’s current management while masking their own conflicts in having repeatedly demanded economic benefits for themselves,” Sculptor wrote in a letter attached to a statement.
It’s the latest turn in a bitter feud between Och and the firm he built. He and four other former executives have been pressing the company to hand over information so they can investigate how it chose Rithm as a merger partner — a deal that Och’s group is challenging.
The firm said Och is being driven by resentment over his departure. It also said his group’s expression of concern for shareholders doesn’t jibe with terms the former executives have sought in their own interest, such as measures to ease their tax burden and a $5.5 million payment to cover legal costs.
Sculptor formed a committee last year to seek a transaction. It has accused Och of stymieing the process, snubbing a potential buyer that walked away earlier this year. Since Rithm agreed to purchase Sculptor in July, Och has questioned whether better options were available.
“The board flatly rejected a higher offer and let management’s compensation demands reduce Rithm’s deal price by 10%,” a spokesperson for Och and the other former executives said Wednesday in an emailed statement. “Sculptor’s response ignores all of this, while seeking to rewrite ancient history. That tells us that the special committee remains focused on the interests of management, not shareholders.”
Rithm agreed to buy the company in a deal valued at about $639 million. Sculptor Chief Executive Officer Jimmy Levin has touted the suitor’s stable capital structure and culture, predicting it will help Sculptor unlock its potential.
On Tuesday, Sculptor accused Och of a history of harming his former company and said he has misrepresented its efforts to seek a buyer. That includes, the firm said, his assertion that it failed to pursue offers that would have been more attractive to shareholders.
“The special committee stood ready to entertain a transaction in any form — with or without current management — that would maximize stockholder value,” according to the letter. “The special committee and its advisers are unaware of any such credible bid.”
Still, the firm said it’s willing to negotiate over producing some records.
“In the interest of avoiding yet more unnecessary litigation, the company is willing to meet and confer to discuss providing the Och group with an appropriate production of materials,” it said. That could include some meeting minutes and presentations related to the deal — “following the execution of a satisfactory non-disclosure agreement.”
(Updates with comment from Och spokesperson in seventh paragraph.)
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