Blavatnik vs. JPMorgan drama nears end


Len Blavatnik, the billionaire rags-to-riches story, is known for his investment prowess, buying companies that much more often than not worked out well for him.

He has not won with every deal, however. His 2007 buyout of the chemical company Lyondell fared poorly, as the company was forced into bankruptcy court within two years, leading to all manner of litigation. Did he blunder again by choosing JPMorgan ($JPM) as his bank of choice to invest about $1 billion in personal funds?

He has sued the bank, alleging that JPMorgan acted "negligently" by investing some of his funds in risky assets, which later declined sharply in value, according to the Financial Times. Blavatnik claims the bank invested his funds as if it were a hedge fund, whereas the funds were to be invested in a much more conservative style.

JPMorgan disputes the allegations and says the risk parameters were negotiated with employees of Blavatnik. It also said that allegations that the bank was shorting various mortgage-backed securities, while customers such as Blavatnik were put in long positions, are without merit.

That this case made it to trial is surprising to some extent. Blvatnik told the FT that, "If the government sues them they settle immediately and it could be billions. If it's individuals or small corporations they litigate you to death and who can take them on?"

He added that, "Nobody apologized until recently. I appreciate it but it was basically in the context of 'settle for no money'. It shows arrogance."

A decision is expected soon.

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