(Updates with Allen & Co.’s Sun Valley media conference in sixth paragraph.)
Oct. 19 (Bloomberg) -- Herbert Allen, the chief executive officer of Allen & Co., was sued by Excelsior Capital LLC, which claims Allen’s family forged the signature of a dying relative to evade collection of a $25.3 million court judgment.
Excelsior alleged in a complaint filed yesterday in Manhattan federal court that Allen’s family, with help from a company executive, fraudulently transferred an Arizona ranch partly owned by C. Robert Allen III to avoid paying the judgment, won by Excelsior in a suit over investments in a broadcasting company.
An Allen & Co. vice president, Terence McCarthy, notarized a legal document with Robert Allen’s forged signature in Manhattan on March 2, while Allen lay dying in a hospital on Long Island, Excelsior said. The suit named as defendants Herbert Allen, a longtime Coca-Cola Co. director and head of his family-founded investment bank; Terry Allen Kramer, a socialite and theater producer; and McCarthy.
“The brazenness of this fraud is staggering in that the defendants herein did not merely assist in the transfer of property to defraud creditors, they did so by means of a forged signature of a dying man,” Excelsior said in the complaint.
Kim Wieland, Allen & Co.’s chief financial officer, didn’t immediately return phone messages seeking comment on the suit.
Sun Valley Conference
Allen & Co. sponsors an annual conference for media executives in Sun Valley, Idaho. Recent attendees included Warren Buffett, Oprah Winfrey, Google Inc. CEO Larry Page, Facebook Inc. CEO Mark Zuckerberg, Microsoft Corp. Chairman Bill Gates and News Corp.’s Rupert Murdoch.
Terry Allen Kramer has produced Broadway shows including “9 to 5,” “The Addams Family” and “Spider-Man: Turn Off the Dark.” Robert Allen and Terry Allen Kramer are the children of Charles Allen, who co-founded the firm. Herbert Allen is their cousin, according to the complaint.
Yesterday’s suit is the latest in a series of complaints Excelsior has filed against Superior Broadcasting Co., Allen family members and Allen & Co. employees in state and federal courts in New York.
According to the complaint, in about 2004 Robert Allen persuaded Excelsior’s owner, Richard Davis, to lend almost $40 million to Superior, a business that was supposed to buy, sell and run radio stations, and a group of related companies and individuals. Robert Allen had already invested more than $80 million in Superior, beginning in the 1990s, Excelsior said.
In 2006, Superior defaulted on the Excelsior loans, which were guaranteed, at least in part, by Robert Allen, according to the complaint. Excelsior sued Robert Allen in state court in Nassau County, New York, eventually winning the $25.3 million judgment.
According to Excelsior, Robert Allen was admitted to St. Francis Hospital in Flower Hill, New York, on Feb. 25, where he died on March 9. The day Robert Allen entered the hospital, Excelsior claimed, Herbert Allen and Kramer set up a limited liability company to hold an Arizona ranch owned by the family, including Robert’s 18.3 percent interest in the property. Excelsior claimed the move was made to shield the ranch from its attempts to collect from Robert Allen.
The two, with the help of McCarthy, conspired to forge Robert Allen’s signature on a deed transferring his interest in the ranch to the new company, Excelsior claimed. McCarthy notarized the phony signature, according to Excelsior.
Excelsior also claimed that McCarthy’s notarization of the deed falsely stated that Robert Allen signed the document on March 2 in Manhattan, when he was in a hospital about 20 miles away.
The case is Excelsior Capital LLC v. Allen, 11-CV-7373, U.S. District Court, Southern District of New York (Manhattan).
--Editors: Andrew Dunn, Charles Carter
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