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Imagine investing millions of dollars about 20 years ago and then finding out you were making investments. zero return the money. Would you like a transparent explanation of what happened?
That’s what the managers of Parkwood, the Cleveland family office that runs the Mundell brothers’ multi-billion dollar fortune (industrial components and electronic components), are former McKinsey partners and associates of George Soros. That’s what I want from wealthy private equity investor Purnendu Chatterjee. at his Quantum Hedge Fund.
According to a recent lawsuit, Parkwood committed $10,032,877 in 1996 through a fund named Mambro (named after the Mandel brothers) that indirectly contributed to Chatterjee-controlled Indian polymers and chemicals. It is said that it flowed into the production company Haldia Petrochemicals. Three years later, Mambro chose to have most of the money redeemed, investing approximately $2.4 million in Haldia.
In May 2017, Mr. Chatterjee’s investment firm wrote to Mr. Parkwood, saying its investment amounted to $2,394,142.37, reflecting the same net asset value nearly 20 years ago. Underpinning what Mr. Parkwood says is a lack of accounting. Parkwood said it filed a lawsuit in 2020 after years of unsuccessful attempts to obtain a satisfactory explanation. The parties have not been able to settle and are now in full swing in US District Court. Lower Manhattan has an abundance of high-paying legal talent of all kinds.
It’s rare for such an argument to go to court over such a sum of money, but both sides are like dogs with bones. Parkwood, a person familiar with the matter, said it was doing this on a principled basis. For Chatterjee, it’s probably a matter of reputation.
Parkwood has sued Chatterjee for self-dealing, claiming it drained tens of millions of dollars — or, as the company’s chief investment officer wrote in an email filed with the court. to, “… you bastards, they’re trying to steal money from us…”.
Chatterjee denied the allegations of self-trading, arguing that it was an illiquid investment and that the checks sent were worth Mambro shares at the time..
The case is a window into the very private world of the family office and what can happen with years of private investing: it can be tricky and messy.
Parkwood, The firm, which declined to comment on the case, was set up in 1998 to manage Mandel’s estate. Morton Mandel—Named by Harvard Business School as one ofGreat American Business Leaders of the 20th Century”— Together with his brothers Jack and Joe, he sold the New York Stock Exchange-listed company Premier Industrial in 1996. The company says the price is about $3 billion.with the Mandel family Jack, Joseph, Morton Mandel Foundation According to the foundation’s website, it has donated hundreds of millions of dollars to charities in Cleveland, across the United States, and in Israel.
According to the lawsuit, Chatterjee is a dual U.S.-Indian citizen, resides primarily in New York State and Kolkata, India, and holds a PhD in industrial engineering and operations research from the University of California, Berkeley. In 1989, he founded the New York-based Chatterjee Group, which, according to its website, “has put together a very successful investment record.”
He also had legal troubles over the years, India’s war against the Bengal state government In an international tribunal over the rule of Haldia, Connecticut Tax Issues, and cooperate with the Securities and Exchange Commission. In the latter case, Chatterjee and Some Affiliates Settle with the SEC He was indicted without admitting or denying the charges on insider trading charges stemming from M&A transactions.
I managed to catch Chatterjee in the hallway outside the courtroom during the break on Wednesday. “Are you innocent, Dr.?” I prompted his attorney, prominent King & Spalding litigator Randy Mastro, to literally poke me in the ribs, presumably for the charge of ambushing his client.
“Exactly,” replied Chatterjee.
We’ll soon find out if the jury agrees.
Email Andy Serwer (andy.serwer@barrons.com).
