A federal judge has dismissed a fraud lawsuit filed earlier this year against the billionaire chief executive of the investment bank Allen & Company.
Judge Colleen McMahon of Federal District Court in Manhattan threw out a claim that Herbert A. Allen Jr., the bank's chief executive, and his cousin Terry Allen Kramer, a well-known Broadway producer, had forged the signature of a dying cousin to protect a family ranch in Arizona from a creditor.
In a 24-page decision issued late Wednesday, Judge McMahon ruled that the plaintiff failed to state a proper claim under applicable Arizona law. She was highly dismissive of the lawsuit, calling aspects of it “implausible†and specifically describing the forgery claim as based on “sheer speculation.â€
“It is highly questionable whether plaintiff even has, or ever had, standing to pursue this action,†wrote Judge McMahon.
The plaintiff, Excelsior Capital, is a commercial lender controlled by Richard Davis, a Long Island businessman who had had a dispute with C. Robert Allen III, who was Mr. Kramer's brother and the first cousin of Herb Allen Jr. Excelsior said it had a $25 million judgment against Robert Allen, who died in March 2011.
The lawsuit accused Herb Allen and Terry Allen Kramer of forging Robert Allen's signature just weeks before his death, transferring his 18 percent interest in the ranch to a corporate entity to protect it from Excelsior's reach.
Judge McMahon's ruling highlighted Herb Allen's tenuous connection to his late cousin. It pointed out that before the lawsuit was filed, Herb Allen had informed Excelsior's lawyer that he had had no direct business dealings with Robert Allen for 25 years and did not recall seeing or speaking with Robert Allen in more than 30 years. He also said lawyers had been recommending changing the ownership structure of the Allen ranch for several years.
“This lawsuit was a crude attempt to collect money f rom my late cousin by making ungrounded accusations against me,†Herb Allen, 72, said in a statement. “The lawyer who brought this case has once again discredited the legal profession, this time at continuing expense to both himself and his client. We intend to hold them responsible for their actions.â€
Allen & Company is a New York-based investment firm that - other than its annual conference in Sun Valley, Idaho - maintains a decidedly low profile. The firm has enduring relationships with many of the media industry's and Silicon Valley's most powerful players, earning coveted roles in deals like Facebook‘s initial public offering. The Allen family is worth $2 billion, according to the recently published Forbes magazine list of the 400 wealthiest Americans.
Judd Burstein, a lawyer for Excelsior, said he fully expected to prevail on appeal. As far as Herb Allen's threat to hold him responsible for his actions, Mr. Burstein said, “Good luck with that.â€< /p>
Herb Allen was represented in the lawsuit by Paul Vizcarrondo of Wachtell, Lipton, Rosen & Katz.
Allen Dismissal
Allen Power of Attorney
