WHEN YOU’RE THE matriarch of one of the most prominent and wealthy families in Philadelphia, when your penthouse on Rittenhouse Square boasts an art collection that features Picasso and Renoir, when your name is on buildings at the Kimmel Center, the Art Museum and the Hospital of the University of Pennsylvania — in other words, when you are Ruth Perelman — people tend to listen to your ideas.
And so it was that Ruth brought her idea to august Schnader Harrison attorney Arlin Adams, a longtime family friend and a former judge on the U.S. Court of Appeals for the Third Circuit. Her son Jeffrey, Ruth explained, had suddenly resigned from employment at her husband Raymond’s companies and moved across the country. Worse, the split had hardly been amicable. Jeffrey and Raymond were no longer speaking.
Raymond Perelman wasn’t a man of ideas, but a man of action, one who had amassed a fortune into the hundreds of millions in manufacturing, mining and finance through a potent combination of killer instinct and unstoppable will. Over the course of five decades, Raymond had become one of the city’s most distinguished — and feared — tycoons.
But this combination, potent in the Darwinian world of business, had proven a mixed bag when it came to raising his two sons, Ronald and Jeffrey. Each had learned at his knee; each had been inculcated with Raymond’s take no prisoners ethos; each had eventually grown restless. Ron became an international business celebrity, his own ruthlessness a nuclear version of his father’s as he clomped around Manhattan like a financial Godzilla, became a staple of the gossip columns that chronicled its glittering nightlife, and litigated over seemingly anything and everything, including tabloid headline generating divorces from wives three and four and a sensational battle over the estate of ex wife number two.
Jeffrey was different. He was a businessman like his father and brother, for sure, but seemingly not cut from the same coarse cloth. He had married once, to a beautiful Canton, Ohio, brunette named Marsha Reines, had one daughter on whom he doted, and became a steady if sedate fixture on the Main Line charity circuit. Circumspect and professorial, with a snowy white beard that made him resemble a leaner, tanner Santa Claus, Jeffrey appeared almost inscrutable. Like his brother, he had waited for his father to retire, to hand over the reins of his businesses. Finally fed up with fighting with Raymond personally and professionally, in 1989 he’d angrily pulled up stakes — and moved to Colorado.
That’s where Ruth’s idea came in. A staple of the tony social whirls of Philadelphia and Palm Beach, where she’s known as much for her statement jewelry as her courtly demeanor, Ruth was, at her core, a Jewish mother. And like all Jewish mothers, she wanted her husband and her sons and her grandchildren together for happy days and holy days, wanted family harmony, wanted everyone to just get along. She was 68; Raymond was 72. This fissure between Raymond and Jeffrey couldn’t be allowed to deepen. Time wasn’t on their side.
For several months, Judge Adams worked diligently to hammer out an agreement between Raymond and Jeffrey that would, it was hoped, accomplish two aims: bring Jeffrey back into the Perelman business fold, and glue Ruth’s fractured family back together. In January 1990, a deal was done: Through a series of a dozen purchase agreements, Raymond would sell Jeffrey assets and/or stock in several of his companies for a purchase price of $27 million. Jeffrey would be his own boss; Ruth would have her son back; Raymond would make Ruth happy. But there were conditions on the deal imposed by Raymond, among them that half of the conveyed assets be placed in an irrevocable trust for the benefit of Jeffrey’s daughter, Alison, and that the deal not generate any gift, generational skipping or capital gains taxes for him. Ruth later stated that she and Raymond “both wanted to ensure … that Alison be able to enjoy the type of wealth that we had enjoyed.”
And so a peace accord was reached. But like those in the Middle East, this one would prove fragile.
Today, Raymond and Jeffrey Perelman are locked in a heinous, contentious battle over the deal that was supposed to ensure their lasting concord. Waged in two separate lawsuits in both state and federal court, it has split the Perelman family in two and left its genteel matriarch shattered and inconsolable. It also threatens to rock both Rittenhouse and Main Line society and, given the charitable habits of the parties involved, perhaps even Philadelphia philanthropy. In essence, Raymond is accusing Jeffrey of lying, deception, and nothing less than swindling his own daughter. Jeffrey is firing back that he’s had it with years of Raymond’s anger and abuse, and that his father’s charges are nothing more than “a father bent on destroying his son’s reputation.” And then there’s Ron, whom Jeffrey accuses in court papers of trying to “fan the flames” of the battle. (Ron himself has been conspicuously silent thus far. It’s not likely to stay that way.)
When disputes arise in families, there is resentment, there is anger, there is usually some small but measurable fallout: Your brother and his wife don’t come to Thanksgiving dinner; Aunt Louise stops sending birthday checks. But with the Perelmans, there are no mere family disputes. Only wars. Fire up the torches, sharpen the knives, slash until they’re all dead wars.
In the end, this war — which is likely to get a lot more public and a lot more awful before it’s over, especially if Ron Perelman gallops into town — is about what most courtroom brawls among families with net worths in the hundreds of millions are about: money. Indeed, Ron was the subject of a recent blistering feature in Fortune that detailed his scorched earth battle over a trust controlled by his late ex wife’s near invalid father. “Look at that story,” says an incredulous business magnate who grew up with Ron and Jeffrey on the Main Line. “This is what they do.”
TO UNDERSTAND HOW this could happen, how a family that in 1985 stood together posing for pictures at Ron’s marriage to gossip writer Claudia Cohen (that would be the same Claudia Cohen whose family estate Ron is now busy suing) — a wedding attended by Elizabeth Taylor — one has to understand what it means to be a Perelman.
Raymond Perelman was born in 1917, the son of Morris and Gennie Perelman, Lithuanian immigrants who came to America as teenagers and settled in Olney and Feltonville. Morris founded American Paper Products, which manufactured cardboard tubes, and with hard work, guile, and the help of his uncle and brother, brought it, thriving, through the Depression. It was while working for the business down in North Carolina that Raymond was invited to a dinner the night before Yom Kippur and met Ruth Caplan of New Haven, Connecticut, who was attending a women’s college in Greensboro. The pair later married, had two sons — Ronald and Jeffrey — and settled into a modest home in Elkins Park.
Raymond netted his first million by buying and then breaking apart the Esslinger’s brewery at 10th and Callowhill. Through his company, Bala Cynwyd based Belmont Holdings, Raymond would stick with manufacturing concerns, companies that did everything from make paper to install furnace linings. He burnished a reputation as a take charge ball buster in and out of the boardroom. He legendarily barked at employees, instituted a hostile takeover of General Refractories in 1985, approached Ed Rendell with the brash idea of moving the Barnes to the city in the early ’90s, and withdrew an offer of a $2 million endowment to what was then the Akiba Hebrew Academy in Merion in 1999 after its board refused to rename the school after him. He flew coach, ate fast food lunches, and relished his corporate image — his bio might be titled Nobody Loves Raymond — while simultaneously building a parallel identity as a philanthropist. “All successful people are risk takers,” he told Karen Heller of the Inquirer in a rare interview in 2007. “And I always wanted to be successful.”
He expected no less from his sons.
From the time they were boys, Ron and Jeffrey were hammered with the tenets of commerce (no Little League for them), and at a young age, each went to work in the family businesses, sweeping floors and doing menial jobs. Raymond set high standards and expected them to be met. And he yelled. A lot. “Raymond is loved, he’s respected, he’s part of this group of 100 people who have made 50 percent of the decisions in Philadelphia for the last 40 or 50 years,” says the businessman who grew up with Ron and Jeffrey. “But as a father, he was simply brutal.”
Ron went to Penn undergrad and Wharton for his MBA; ditto Jeffrey. Both went to work for Raymond, until each separately got sick of it (and him) and struck out on his own. Ron became an international sensation in New York, famous for his romantic dalliances and stormy, showy marriages: his last two were to Democratic Party fund raiser Patricia Duff, with whom he engaged in one of the nastiest custody battles ever recorded (during their divorce, he is alleged to have said, “I will destroy you, and I will enjoy it”), and actress Ellen Barkin, who reportedly won a cool $40 million in their 2006 divorce and another $4 million or so in a recent legal battle. Like him, she’s apparently comfortable in a courtroom.
But Jeffrey wasn’t about glitz — or conflict. Jeffrey stayed local until he, too, had had enough. When he returned from Colorado, he eventually settled in Wynnewood. He was the good Jewish son to Ruth, and a devoted dad to his daughter Alison. And unlike Ron, he had gotten married — in the mid ’70s — and stayed married, to a chic, savvy businesswoman in her own right. Marsha Perelman climbed the ladder of the male dominated oil and gas industry (in the early 1990s she was hired to head PGW, an offer that vanished in a typical cloud of City Hall politicking) while building her own impressive philanthropic résumé, one that includes stints as the president of the Zoo and the current chairmanship of the Franklin Institute. She’s also a strident animal rights activist; last year she confronted her next door neighbor, Eagles owner Jeffrey Lurie, on his hiring of Michael Vick.
So perhaps it was simply inevitable that with such contrasting personalities within it, the family would one day split, that it would rupture and leave Raymond and Ron on one side and Jeffrey on the other, with Ruth the powerless Solomon. “It’s all just so sad,” says one veteran of the Main Line charity world who knows the family. “It makes you wonder, ‘Why?’”
Perhaps because they’re rich. Because they’re powerful. Or, simply, because they’re Perelmans.
ALISON PERELMAN IS, by all accounts, a smart, charming young woman. Like her mother, she is a dark eyed, raven haired beauty, and she bears the standard issue Main Line heiress credentials (high school at Baldwin, college at Princeton, apartment in a stylish Washington Square West condo). She’s now a 27 year old PhD student in communications at Penn, where the hospital’s Advanced Medicine building is named for her grandparents. A member of the Annenberg Graduate Council, last summer she traveled to Brisbane, Australia, to study the role of sports in reconciling aboriginal and non indigenous peoples; this month, she’ll present a paper at the annual conference of the Association of American Geographers in Washington, D.C. “One look at Ali tells you all you need to know about how loving, caring and careful her parents were with her upbringing,” says Anne Gordon, the former Inquirer managing editor and part of Marsha and Jeffrey’s inner circle.
But Alison currently finds herself the center of the fight between her father, who set up the trust that now bears her name when she was seven years old, and her grandfather, who, Jeffrey alleges, in recent years has told friends — including personal injury lawyer Marvin Lundy and Gary Crooks, the initial recipient of the Ruth C. and Raymond G. Perelman professorship in internal medicine at Penn — that Jeffrey used that trust to steal from his own daughter. “Raymond Perelman has now, in the twilight of his life, elected to engage in a vicious course of conduct directed at one son, with the aid and instigation of the other, that is unspeakable, incredibly embarrassing to both the family and a very prominent and distinguished member of the Philadelphia legal community, and utterly devoid of a factual basis or any connection to reality,” Jeffrey states in his federal lawsuit against his father, which was filed in October and then amended in November to include defamation claims against both Raymond and Ron.
Raymond’s specific allegations of fraud — detailing his charge that Jeffrey altered the agreed to terms of the set up of the trust so that he and Marsha would control the income generated by it, something he says he strictly forbade as part of the deal to sell Jeffrey his assets — are believed to be spelled out in his lawsuit in the Pennsylvania state courts. On October 21st, that filing was sealed by Philadelphia Court of Common Pleas Judge Albert W. Sheppard, the jurist who famously ordered the Eagles to pay the city $8 million in back skybox revenue last June. The sealing motion was granted two days after Arlin Adams wrote to the federal court (and presumably the state court as well) expressing concern that the litigation would embarrass the family and expose its “internal relationships and disagreements, and personality conflicts. The litigation may also portray the family in a negative and unflattering light, which risks undermining the good works that the family has done for the citizens of the region.”
Jeffrey filed his own suit, in federal court, just hours before Raymond filed his in state court. In sum, Jeffrey’s suit said, “Raymond is about to sue me, and you shouldn’t let him” — explaining that Raymond had been threatening to sue him for years, and that, “disturbed and weary” from this, he was forced to strike first. But his motion to seal was denied by Eastern District Judge Mary A. McLaughlin. So there now exists a public record of Jeffrey’s case, and a sealed record of Raymond’s. In a letter to McLaughlin on November 30th, Raymond’s attorney, Steve Cozen, accused Jeffrey and his legal team of disingenuousness, stating he had warned them a federal sealing order was unlikely. “It is apparent to us, regretfully, that Jeffrey does in fact want to litigate this personal family matter in the court of public opinion,” he wrote, going on to charge that Jeffrey’s counsel, Blank Rome’s James Smith, “is conducting himself as noisily as possible so as to attract attention, all the while trying to maintain a cover story proclaiming an interest in family privacy, and ‘shock’ on the part of Jeffrey that his father is upset with him.”
A thorough reading of Jeffrey Perelman’s suit, coupled with supporting court documents obtained by Philadelphia magazine, paints a picture of how a trust set up for a granddaughter degenerated 20 years later into dueling lawsuits that threaten to publicly unravel the Perelman family. The dispute over the trust centers on one allegation: Raymond’s, that he was duped.
Raymond contends that his sale of the companies to Jeffrey in 1990 — which begat the trust — carried with it terms that haven’t been carried out, and, more specifically, that Jeffrey made himself, not his child, the principal beneficiary of the trust. In an affidavit dated November 23rd, Ruth states that “Jeffrey and his wife Marsha were aware of and agreed to the arrangements as we required, that one half of the Business Interests would be transferred in trust for Alison; and I assumed that such arrangements would be carried out.” As part of her affidavit, Ruth attached the draft of a confidential memo prepared by Arlin Adams in April 2009 that outlined his recollection of the sale of Raymond’s businesses to Jeffrey, and the terms all parties agreed to. Adams recalled Raymond’s three specific conditions for the deal: that there would be no adverse tax repercussions for him; that one half of the “transferred companies” would be held in trust for Alison and any other children Jeffrey might have; and, most tellingly, “Raymond wanted to insure that Marsha, Jeffrey’s wife, would not benefit from the contemplated transfers of the stock of the companies that Raymond was transferring,” and that “Marsha would, in writing, relinquish any and all claims regarding the transferred corporations and assets.”
Predictably, that’s not quite the way Jeffrey remembers it. In his suit, he contends that at the age of 92, Raymond is simply a bitter old man trying to rewrite the rules he signed onto in 1990, and — egged on by Ron — is now waging a Perelman esque slash and burn campaign against him and Marsha. “It’s been very hard on them, because they’re very peaceful, and they live a quiet life, and they just want to be generous and happy,” says Liz Dow, the president and CEO of the civic organization Leadership Philadelphia and a close friend of Jeffrey and Marsha’s. “And this is hard and disruptive. They’re under attack.”
In his filing, Jeffrey lays out the scenario of Ruth’s idea and the deal it led to, including the formation of the trust. While Raymond “now claims belatedly that he expected the Trust to be established with Jeffrey’s daughter and the daughter’s future issue as the sole beneficiaries, and that all of the income of the Trust for the last 20 years should have remained in the Trust for them,” Jeffrey asserts that “the clear and unambiguous provisions of the Agreement of Trust state that Jeffrey is the beneficiary during his lifetime and has the right to control the income in the Trust.” In sum, Jeffrey argues that in order for Raymond to get what he insisted on having — no tax burden from the deal, and no scrutiny from the IRS — the trust had to be structured the way it was. Jeffrey also refutes the assertion that Marsha was to renounce her interest in all of the assets transferred. “Simply put,” he says, “that was never the deal.”
Jeffrey says there was no way Raymond didn’t understand what he was signing. “As a savvy, sophisticated and successful businessman with almost 50 years of experience at the time, he fully understood the terms and conditions of each document.”
So in sum, it comes down to this: Did Jeffrey pull a fast one and structure the trust differently than he had originally agreed to with Raymond, so he could get his hands on his daughter’s money? Or did Raymond fully understand from day one the deal he’d struck to make peace in the family, then stew about it for years until it exploded into a vendetta against Jeffrey and Marsha?
A judge will likely decide. Until then, it’s every Perelman for himself. “Listen, we all have disputes in our families,” says socialite Anne Hamilton, who has served on various charity boards with Marsha. “I know there’s something going on, and the only thing I can say is that I hope it all works out. Because in the end, someone always gets hurt.”
RAYMOND PERELMAN DOESN’T smile in pictures.
If you look at the myriad photos of him and Ruth splashed on the society pages of the Inquirer or on websites like Newyorksocialdiary.com, he appears almost exactly the same in each, wearing an expression that registers somewhere between bored and resigned. With his perpetual hangdog look and rubbery face, he bears an odd resemblance to character actor Al Molinaro, probably best known for his role as Al, the owner of Arnold’s Diner on the 1970s sitcom Happy Days. Beside him — always beside him — in the photos stands Ruth, in a conservative tailored suit or demure gown, her own face bemused and faintly regal.
Raymond is currently bunkered in his winter home in Florida, where during this, “high season,” he and Ruth would normally be making their regular rounds through the snowbird social scene. But Ruth has been conspicuously and unusually absent from Palm Beach this year, instead reportedly holed up in her duplex on Rittenhouse Square, no doubt stewing in her Pellegrino and wondering how her little idea back in 1989 — the one that was supposed to bind her family together forever — went so wrong.
Jeffrey and Marsha seem to be attempting to carry on as usual, making a highly public appearance together at January’s annual Academy Ball. They’ve also been rallying troops to their defense, perhaps realizing that if the case of Perelman v. Perelman drags on, they’re going to need a little help from their friends. Steven Altschuler, the CEO of the Children’s Hospital of Philadelphia — where Jeffrey sits on the board and the oncology unit is named for him and Marsha — says he wouldn’t hesitate to attest to the couple’s “incredible integrity”; Anne Hamilton calls Jeffrey “one of my very best friends.”
In the interim, the lawyers are busy lawyering, racking up billable hours paid for by all of that Perelman money. Steve Cozen sent this magazine a standard response of “Raymond Perelman declines to comment on what should be a private family matter”; James Smith at Blank Rome didn’t return a call (though the firm’s chipper PR guy, the appropriately named Topper Ray, did). In the Perelmans’ seeming quest to drag every white shoe law firm in Philadelphia into this soap opera, Ruth has apparently and mysteriously retained her own counsel: Joe Jacovini, of Dilworth Paxson. (He also didn’t return calls for comment.) And remember, we haven’t seen Ron’s team yet. (For the moment, Cozen is defending him.) It’s enough to make you wonder if a séance will be held to resurrect Howard Gittis.
How all of this will eventually be adjudicated remains unclear, though it seems likely that sooner or later, the suits will be relegated jointly to either federal court or state court, rather than moving along on their two parallel paths. The whole matter could be settled next week or drag on for years. With the Perelmans, you never know.
“When something like this happens to your friends, you hope that the wonderful, caring people you see, you laugh with, you tease, are the ones that others can see and appreciate as well,” says Anne Gordon, part of the Jeffrey and Marsha camp. “You hope that people can see past the headlines to the real people, the ones who love their families, struggle with their families, love them again, and get frustrated with them all over again. And when the time finally comes to say ‘Enough!’ to that same family, that we can all watch and say, ‘I think I understand.’”