Morgan Stanley & Co., Inc. v. Coleman (Parent) Holdings, Inc., No. 4D05-2606 (Fla. Dist. Ct. App. Mar. 21, 2007)
In a 2-1 decision, a Florida state appellate court today reversed the $1.58 billion judgment against Morgan Stanley in the litigation brought by Coleman (Parent) Holdings, Inc. Judgment was reversed on the grounds that plaintiff failed to prove compensatory damages by not establishing the fraud-free value of the Sunbeam stock on the date of the merger transaction. Since the decision on that issue was dispositive, the court did not reach the other issues on appeal, including whether the trial court improperly entered a partial default against Morgan Stanley as a sanction for discovery misconduct, and whether the trial court erred in denying Morgan Stanley a fair opportunity to contest and mitigate evidence of litigation misconduct presented during the punitive damages phase of the trial.
Accordingly, the appellate court reversed both the compensatory and punitive damage awards and remanded the case with directions to enter judgment for Morgan Stanley. Note, the decision is not final until the disposition of a timely filed motion for rehearing.
A copy of the decision is available here.