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There is no question that executives at Platinum Equity won’t back down from a fight. The Beverly Hills–based buyout firm, which is willing to purchase sick companies in ailing industries, this spring bought the Union-Tribune for a lowball price of around $50 million. Now Platinum is fighting to take over the bankrupt auto-parts maker Delphi Corporation, with little money down and with help from General Motors and the federal government. Delphi’s creditors, who will get 20 cents on the dollar, charge in New York bankruptcy court that it is a sweetheart deal, but Platinum seems to relish a bruising scrum.

However, Platinum does not relish media coverage of two lawsuits filed by former Platinum employees — a male bodyguard and two female workers — that accused the company and some executives of fostering a sexually charged atmosphere and hostile environment for women.

The suits have been mentioned by CNBC, the Reader, and the Los Angeles Times, and Platinum has taken pains to denounce the charges and the lawyer who brought the suits.

Platinum is headed by 44-year-old Tom Gores, who is worth $2 billion, according to Forbes magazine, which lists him 334th among the world’s billionaires. A Christian of Lebanese and Greek descent who was born in Israel, Gores grew up near Flint, Michigan, worked in his family’s grocery stores, graduated from Michigan State University with a BA in real estate finance, and worked for his older brother Alec in the takeover business before going out on his own. In September of last year, when the economy and stock market were on the edge of the abyss, Gores was able to raise $2.75 billion from pension funds and other investors to be used in further attempted healings of frail and suffering companies.

Just recently, a Platinum executive declared that the company was looking into buying more newspaper and automotive-related enterprises. The stock market has slaughtered such entities. Platinum is willing to thumb its nose at the market’s judgment; Gores is going to go down as a miracle worker or an unsuccessful bottom-feeder.

But Platinum has a cushion. It doesn’t put much money into a deal — witness the Union-Tribune transaction. Now it wants to plunk down a mere $250 million in cash and $250 million in a credit line to gain control of Delphi, which has been in bankruptcy for almost four years. General Motors, which was once Delphi’s parent, says it will put in more than $3 billion, including certain obligations. The federal government owns 60 percent of General Motors, so taxpayers are picking up part of the tab, complain critics. They charge that the deal was secretly sewn together by General Motors, Platinum, and President Obama’s automotive task force.

Dennis Kneale, a host on business/finance TV network CNBC, questions the deal, and in a commentary on June 18, he attacked the terms. He also discussed the two lawsuits, both of which were ultimately dismissed, one under unknown circumstances. The suits contained allegations of improper sexual conduct. Kneale rattled off the charges: female employees having affairs with executives, being hired for their looks, being pressed to have sex, and then getting paid to shut up, and other similar malefactions. Kneale mentioned the allegation that Tom Gores had an affair with his brother’s then-wife, widely publicized in last year’s Anthony Pellicano private-eye case that captivated Los Angeles.

Not long after his commentary, Kneale got a letter from Eva Kalawski, Platinum’s in-house attorney, who told him that wealthy individuals and successful companies often are hit with suits full of “unfounded allegations.” In his commentary of June 21, Kneale continued to attack the Delphi deal and then spoke of Kalawski’s concerns.

The Reader retrieved the two lawsuits, along with lengthy interrogatories and related filings. One suit was filed in 2007 by a former Gores bodyguard, Martin Nielsen, who used the pseudonym John Doe. His lawsuit protested his firing, alleging that his employment was wrongfully terminated after he was pressured to sign what he felt was an unlawful employment agreement.

The court said he should identify himself, and he amended his complaint to state his real name and added allegations that Lavely & Singer, Platinum’s law firm, called in a court memo “scandalous, irrelevant, personal and private information about people not parties to this litigation.” The memo continued, “For example, plaintiff mentions Tom Gores’ personal life and his relations with his wife and others, even though none of those allegations concern[s] the substance of plaintiff’s claims that a revised employment agreement he was requested to sign allegedly violated provisions of the Labor Code.”

There were several allegations of sexual improprieties. At Platinum’s request, the court struck them from the complaint because they were deemed not relevant to the claims. The court did not rule on whether the allegations were true.

The judge dismissed the suit on December 14, 2007, finding that the employment agreement the guard was asked to sign was not invalid or a violation of law and he was an at-will employee.

The other lawsuit (actually two suits that were consolidated into one) was filed in 2006 by two women using the pseudonym Jane Doe. Their names can be found in the court records.

This suit alleged that Platinum Equity “creates and tolerates a persistent, and pervasively sexually charged and hostile environment for women.” Moreover, “Sexual favors, the demand for sexual gratification and the payment of favors and ‘hush’ money are fixed policy and practice among PE [Platinum Equity] executives.”

The complaint alleged that Platinum executives “show favoritism towards female employees who consent to the employer’s sexual advances by rewarding them with money, gifts and travel, [meanwhile] promoting or rewarding women based on appearance and submission to sexual advances by PE executives, and financially supporting former employees to keep them quiet.”

Further, the company “intimidates, coerces or terminates female employees if they question or refuse to go along with the sexually charged atmosphere,” the Jane Doe suit alleged. It claimed that Gores and his top lieutenants had affairs with female employees and accompanied female assistants to strip clubs. One of the plaintiffs charged that one executive “constantly made sexually charged comments at work such as, ‘Hey, do you want to see what’s in a man’s underwear?’ and ‘What do you say my hot dog goes between your buns?’ ”

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Comments

kleindeinst July 15, 2009 @ 12:56 p.m.

Jesus. One look at Tom Gores and I just assume he always has a handful of roofies at his disposal.

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Don Bauder July 15, 2009 @ 1:23 p.m.

Response to post #1: As happens so often, I have to confess that I'm naive. I don't know what "roofies" are. What's significant to me is that the new owner of the Union-Tribune hired a lawyer known for his threat letters to warn another publication, the Reader, against printing something that is a matter of public record. That is the real story. Best, Don Bauder

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SurfPuppy619 July 15, 2009 @ 3:36 p.m.

Platinum is headed by 44-year-old Tom Gores, who is worth $2 billion, according to Forbes magazine, which lists him 334th among the world’s billionaires.

That is an amazing statistic. There are now hundreds, maybe even thousands, of billionaires in the world.

When Trump hit the billion mark in the late 70's or early 80's there were less than 10 (in the USA anyway).

It shows how concentraded the wealth has become and is very likely a reason of the current economic meltdown.

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SurfPuppy619 July 15, 2009 @ 3:44 p.m.

As happens so often, I have to confess that I'm naive. I don't know what "roofies" are. What's significant to me is that the new owner of the Union-Tribune hired a lawyer known for his threat letters to warn another publication, the Reader, against printing something that is a matter of public record. That is the real story. Best, Don Bauder

By dbauder

"Roofies" are a drug used to incapacitate a person (usually for sexual aasault).

As for the lawyer threat letters to the Reader, tell this clown to do 3 things;

1) Look up the term "Slapps" lawsuit,

2) Look up Cal. Civ. Proc. Code § 425.16

3) Tell these clowns to bring it on, because they will lose and then get the priviladge of paying for the Readers legal bills under the fee shifting provision of CCP 425.16

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SurfPuppy619 July 15, 2009 @ 3:52 p.m.

BTW, Marty Singer is the lawyer of record for sending threatening letters, for whatever the reason, for many of Hollywoods biggest stars.

I don't see why Mattingly clammed up though. If Singer's firm were bad mouthing me in court filings, mstters of public record, I would fight back with everything I had.

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David Dodd July 15, 2009 @ 4:07 p.m.

I have to laugh at this. It is telling that the big giant and mighty (and oh-so-very-unreadable) Union-Tribune is the least bit concerned about what's printed in the San Diego Reader. Platinum made a huge mistake when they bought the U-T, unless they plan on letting it dissolve into nothing more than a small-time community newspaper (as a tax write-off, perhaps?). They'll make a bigger mistake should they decide to challenge the first amendment.

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SurfPuppy619 July 15, 2009 @ 4:10 p.m.

Opps, I did not see the companion article prior to my #5 post.

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SurfPuppy619 July 15, 2009 @ 4:11 p.m.

Jesus. One look at Tom Gores and I just assume he always has a handful of roofies at his disposal.

By kleindeinst

LOL...get ready for a Marty Singer "letter".

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Don Bauder July 15, 2009 @ 4:36 p.m.

Response to post #3: The obscenely uneven distribution of wealth and income is definitely a reason for the downturn, and could generate social unrest, as even Alan Greenspan admits. Best, Don Bauder

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Don Bauder July 15, 2009 @ 4:40 p.m.

Response to post #4: If that's what "roofies" are, then I know of no evidence suggesting their use in this case. I am sure that the lawyer making the threats, Martin Singer, knows about SLAPP suits and the other legal remedies you mentioned. Incidentally, several other publications have printed his threatening letters, despite his claim that they are copyrighted. Best, Don Bauder

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Don Bauder July 15, 2009 @ 4:42 p.m.

Response to post #5: I think if you read both of these columns carefully, along with Singer's letter, you will get a good idea why Mattingly is silent for now. Best, Don Bauder

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Don Bauder July 15, 2009 @ 4:47 p.m.

Response to post #6: From the standpoint of the First Amendment, I do not think it is wise for a newspaper owner to hire a lawyer to threaten another newspaper about the printing of materials that are a matter of public record. Remember that Platinum bought the U-T for the discounted value of the real estate. So it can flip real estate, it hopes, for a good profit. It is already trying to do so -- advertising the properties in the U-T. It paid $35.5 million for the Mission Valley headquarters, which has an assessed valuation of more than $90 million. I believe that in time, it would like to vacate that building and flip it. However, the commercial real estate industry is in the megrims now. Best, Don Bauder

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Don Bauder July 15, 2009 @ 4:52 p.m.

Response to post #7: After Schwarzenegger was governor, a maker of bobblehead dolls made a likeness of the Termiinator. The company got a threatening letter from Singer, claiming Schwarzenegger had a right to any use of his name, likeness, etc. But, said the company, he is no longer an actor. He is governor. He is a public figure. The dustup was apparently settled amicably. But a website published Singer's letter. You can find it online. Best, Don Bauder

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Don Bauder July 15, 2009 @ 4:54 p.m.

Response to post #8: Hopefully, we have taken care of that matter. There is no evidence at all of that. Best, Don Bauder

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Twister July 16, 2009 @ 10:57 a.m.

When social mores fail, we desperately enact "laws" in an often vain attempt to "regulate" behavior. Fortunately, I grew up in a provincial society that had a healthy contempt for the latter and an intuitive respect for the former. Unfortunately, one cannot punch an errant SOB for anti-social behavior before the behavior gets out of hand and stay out of court--and LOSE, of course, and, of course, be financially wrecked as well as rot in prison. What's left is a population of errant SOB's.

There's a principle in law enforcement: If the punishment is not severe enough to modify the behavior, it isn't severe enough. Sure, a few Mad-offs might have been made an example of AFTER they've made off with their own kind's loot (Madoff's BIG mistake), but the rest pass "go" and pick up another fortune for their roll of the loaded dice, and this convinces JQP that all is well, all better now.

When it comes to slapping the hands of those lawyers and their clients who file nuisance suits, the "punishment" is far from sufficient. It has to hit the press big time, and it has to be a hard enough whack to get the mulish attorney-guild's attention--right where the arrogance originates.

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Don Bauder July 16, 2009 @ 9:39 p.m.

Response to post #15: The malefactors of Wall Street not only pass go and pick up fortunes, they are subsidized by the taxpayers when their bets fail. And the taxpayers don't seem to care. Best, Don Bauder

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Twister July 17, 2009 @ 9:09 a.m.

Ah, YES, the apathetic public again. Specifically, from A to Z, what would you have the public do? Other than revolution or vigilantism, just how should we respond to your comforting us and afflicting the SOB's? And where is the tipping/breaking point? When koyaanisquatsi reaches terminal velocity? That's too late, I suspect. A, B, and C should be sufficient for now.

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Don Bauder July 17, 2009 @ 11:22 a.m.

Response to post #17: Glad you asked: 1. Appoint someone tough, say Nell Minow, as head of the Securities and Exchange Commission. Instruct her that the first thing she should do is eliminate the revolving door policy, by which SEC lawyers do favors for crooks, then take $2 million a year jobs with the crooks' law firms. Instruct Minow to concentrate on the big cases, not the wee ones, and refer more cases to criminal authorities. 2. Crack down on the stashing of money offshore. The IRS is trying this now (we think) in the case of Switzerland and UBS. We must not back down. The malefactors should get prison terms for tax fraud. 3. Have tough regulation of derivatives. 4. Tell derivatives buyers and sellers that they should start winding down derivatives -- NOW. 5.Consider criminal penalties in some of the most egregious cases: AIG, Lehman, Bear Stearns, Fannie Mae, Countrywide 6. Put mortgage salespeople who strapped people with liar loans, adjustable rate mortgages, exotic mortgages ad nauseam in jail. 7. Tighten, not loosen (as is now happening) accounting rules. 8. Never hire for a high government post someone who has failed utterly. Example: Larry Summers, who was one of the key leaders (along with Greenspan, Rubin and Levitt) who blocked the regulation of derivatives. That alone should have eliminated Summers from any government post. 8. Hire the people who did the right things. Example, Brooksley Born, who tried to regulate derivatives but was thwarted by the fools named above. This is just a start. Ask me again and I will come up with many more. Best, Don Bauder

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SurfPuppy619 July 17, 2009 @ 11:43 a.m.

Wow, I'm impressed.

You were called on the carpet for answers, and you lined them up in spades.

If we could get 25% of your suggestions implemented we would be on our way to fiscal recovery and responsibility. Some of the things you mention were cornerstones of H. Ross Perot's presidential bid in 1992- and why he was leading the largest state in the union by a 2 to 1, and 3 to 1 margins (in a 3 way race).

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Don Bauder July 17, 2009 @ 12:40 p.m.

Response to post #19: One of the most important steps would be to deal with the obscenely uneven distribution of wealth and income. The biggest offender is Wall Street. Recently, Goldman Sachs revealed that its average pay -- including janitors and char ladies -- was nearly $400,000 a year. Wall Street and the investment banking industry represent classic examples of the unearned increment. When economists such as Thorstein Veblen and political leaders such as Lloyd George talked about the unearned increment more a century and more ago, they were talking about real estate. But Wall Street is no different. It makes money shuffling money. It arranges mergers and acquisitions, when research shows that M&A represents the worst way to grow. (See studies by Sanford Bernstein.) In fact, most mergers and acquisitions fail. Most leveraged buyouts are out and out scams. These Wall Street firms make their money trading -- or, basically, gambling that is subsidized by government. It is activity that not only contributes nothing to the economy, but actually detracts from meaningful economic progress. That is why the biggest reforms must come in the banking and investment banking industries (as well as hedge funds and private equity firms) -- the very industries that taxpayers are bailing out. There must be compensation reform. There must be criminal cases -- jailing of Wall Street moguls, as there was in the 1930s. Best, Don Bauder

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Duhbya July 17, 2009 @ 1:47 p.m.

Response to #12: "However, the commercial real estate industry is in the megrims now." Send me to tailtucking to Webster's whydoncha? Do not pass Go, do not collect $200.00. How long have you been clamoring to use that word? I'm rolling on the floor here! Beeyootiful!

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Duhbya July 17, 2009 @ 1:52 p.m.

Should have read: Send me tailtucking to Webster's whydoncha?

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Don Bauder July 17, 2009 @ 2:04 p.m.

Response to post #21: I use "megrims" as an occasional substitute for "doldrums," when the latter seems to be getting stale. I have been using "megrims" for decades. I'm sure I've used it in the Reader. Best, Don Bauder

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Don Bauder July 17, 2009 @ 2:06 p.m.

Response to post #22: You were close. Best, Don Bauder

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Don Bauder July 17, 2009 @ 2:27 p.m.

NOTE: JUDGE POSTPONES DELPHI AUCTION. New York bankruptcy Judge Robert Drain today (July 17) postponed until Tuesday an auction of Delphi Corp. assets that was supposed to take place today. A deal had been set up for Platinum Equity to buy the bankrupt auto parts maker with substantial help from General Motors, which is 60% owned by the government. The lenders, who would be getting little, had said it was a sweetheart deal, with the federal government pulling the strings. Judge Drain had questions about it, too. Some of the lenders plan to submit a credit bid for Delphi, which would involve them forgiving debt. Best, Don Bauder

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Duhbya July 17, 2009 @ 3:05 p.m.

"Response to post #21: I use "megrims" as an occasional substitute for "doldrums," when the latter seems to be getting stale. I have been using "megrims" for decades. I'm sure I've used it in the Reader. Best, Don Bauder"

Apparently so. I missed it previously:

By Don Bauder | Posted April 19, 2009, 7:11 a.m. "... a very good performance given the current market megrims."

By Don Bauder | Published Wednesday, Jan. 14, 2009 "... Newspaper megrims have also hit the New York Times"

To show a couple.

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Don Bauder July 17, 2009 @ 3:50 p.m.

Response to post #26: I don't know the derivation of the word, but it's possible a Native American was sitting next to his wigwam, his hands covering his face. Somebody asked him what was wrong. His reply: "Me grim." Best, Don Bauder

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WhatGoesAround July 20, 2009 @ 5:04 p.m.


The complaint alleged that Platinum executives “show favoritism towards female employees who consent to the employer’s sexual advances by rewarding them with money, gifts and travel, [meanwhile] promoting or rewarding women based on appearance and submission to sexual advances by PE executives, and financially supporting former employees to keep them quiet.”

Wow, more sexual intrigue and shenanigans in the corporate suites. Why Tom Gores and his fellow execs would waste a penny trying to silence this story is beyond me. Do they really think the public thinks they are upstanding pillars of chivalry and moral order? Sounds like a sequel to Citizen Kane is in order here. I'll write the script.

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Don Bauder July 20, 2009 @ 8:21 p.m.

Response to post #28: If you are writing a movie script, you will have to deal with Martin Singer, the lawyer. Best, Don Bauder

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SurfPuppy619 July 20, 2009 @ 8:30 p.m.

If you are writing a movie script, you will have to deal with Martin Singer, the lawyer. Best, Don Bauder

By dbauder

Marty is all show and no go.

He is probably a lot like Scott Peters, never seen the inside of a courtroom and couldn't actually try a case to verdict if his life depended on it.

If Gores wanted a lawyer to the stars, who could hold his own in a courtroom, he should have called Bert Fields.

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Don Bauder July 21, 2009 @ 7:40 a.m.

Response to post #30: When I researched Singer, I could find lots of threatening letters he composed (most substantially similar), but I didn't find that he has actually tried cases. He may have tried many, for all I know. I just didn't locate any. Best, Don Bauder

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SurfPuppy619 July 21, 2009 @ 10:47 a.m.

He has tried as many as Scott Peters has (zero).

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Don Bauder July 21, 2009 @ 3:22 p.m.

Response to post #32: I assume you checked that. Best, Don Bauder

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Don Bauder July 22, 2009 @ 3:33 p.m.

Response to post #34: You always do your homework. Don't tell JW I said that. Best, Don Bauder

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