Irving H. Picard v. Saul B. Katz et al

Filing 170

DECLARATION of Regina Griffin Completed With Exhibits 31 to 45 in Support re: 162 FIFTH MOTION in Limine To Deem Statements By Sterling Stamos Employees In The Course Of And In Connection With Their Employment By Sterling Stamos As Admissions of The Sterling Defendants.. Document filed by Irving H. Picard. (Attachments: # 1 Exhibit 31, # 2 Exhibit 32, # 3 Exhibit 33, # 4 Exhibit 34, # 5 Exhibit 35, # 6 Exhibit 36, # 7 Exhibit 37, # 8 Exhibit 38, # 9 Exhibit 39, # 10 Exhibit 40, # 11 Exhibit 41, # 12 Exhibit 42, # 13 Exhibit 43, # 14 Exhibit 44, # 15 Exhibit 45)(Sheehan, David)

Exhibit 38

From:
Sent:
To:

Subject:

Derek S. Daley
Wednesday, Juno 18, 2003 7:27:41 PM
Peter Stamos
FW: Levered lurid

Peter:

I asked Ashok about the process of resoIvng the rather heated discussion today (to which
the personal fued/stalemate between you and Noreen admitted no compromise) about whether
and the extent to which the levered fund should swap into Ezra's Ascot fund. He received the
attached message from you at the same time.
I'm confused. How do decisions get made concerning the portfolio? Although circumstances
were ripe for compromise on this and the issue of the equity managers, neither you nor Noreen
would budge, despite the impassioned and entirely sober pleas of Saul and Ellen to compromise.
And then, with issues still apparently open, you confirm a $1 .5 to $3 million investment in Ascot!
Admittedly I stepped out to attend to other urgent business but I think I caught the gist of the
conversation about Ezra. [Incidentally, as an entirely unschooled observor, the combination of
lack of transparency, history of betrayal to you and Noreen and assessment that market
conditions no longer validate Ezra's approach to options leaves me seriously unimpressed with
Ezra'a track record and historical performancel. But I'm willing to deferto your better judgment.
Where I cannot defer, however, is as to process, which is seriously broken. Saul expressed
the substance, the characteristics of the fund (e.g., conservative, no pojoratively described "high
octane" players, etc.), very well. Unfortunately. I make investment decisions on the basis of
substance and process. When people I love and respect sit down and have intelligent, thoughtful
discussions and on that basis reach a consensus that the participants embrace as perhaps less
than the ideal fund but nevertheless a skillfully crafted, well-balanced fund, I invest. I did not
witness that today.
This afternoon's conversation, Marketing lA -- in which the company sits with customers to
design a product that meets their needs -- was tong overdue. lt should have taken place with
Saul three months ago. Nevertheless, what I found fascinating was that no one disagreed with
Saul's objective. The argument was over how we get there and it's unfair to paint one side as
having as its objective "home runs" or a search for "high octane" players.
People can disagree on the appropriate balance of the factors you outlined at the start of the
meeting. They can even disagree about the assessment of a certain managers qualitative and/of
statistical merit (e.g., whether Ezra is or is likely to be transparent, whether the historical data is
meaningful as applied to certain managers). Disagreements are healthy. They promote
thoughtful reconsideration, especially among people as gifted as you, Noreen, Ashok and Ellen.
But these disagreements were something else-- uncompromising, unyielding and expressed in
very personal terms (e.g., Noreen drawing clear battle lines between us (the portfolio group) and
you). lt was unproductive and, when focused on inconsequential amounts $250,000 to $1 million
in a $50 to $60 million fund, laughably absurb.
I sat there is complete horror. Watching a group of exceptionally skilled and gifted people
about whom I care unable to harness their collective wisdom. If I were Saul, I would withhold my
investment until consensus could be built and you and Noreen arrive at some happy middle
ground in terms of process for the portfolio and co-existence as partners. As to my own
investment, I remain confused and reluctant.
Derek

----Original Message
From: Ashok Chachra
Sent: Wednesday, June 18, 2003 6:44 PM
To: Derek S. Daley
Subject: FW: Levered fund

T(U ttExhibit:

Wit:

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Date:
Leslie RockwOOd CSR RPR

CONFIDENTIAL

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----Original Message
From: J. Ezra Merkin [mailto:JEMerkingabrielcapital.comI
Sent: Wednesday, June 18, 2003 6:22 PM
To: Peter Stamos
Cc: Ashok Chachra
Subject: RE: Levered fund
I am sure it is fine.

I have been sitting here for the entire afternoon, and am sorry I missed
your call. You can call again if that reassures you; if not, assume it is
fine, and put it on the list for next week.
>

> From:

Peter StamosISMTP: peter.stanios©spcapitalgroup.coml
> Sent: Wednesday, June 18, 2003 6:08 PM
> To: JEMerkin©gabrielcapital.com
Cc: ashok.chacrha©spcapm.com
> Subject: Levered fund
>

> Ezra
>

> Sorry that I missed you. l've asked Ashok to call toconfirm an additional
> investment iii Ascot. 1.5 plus. Perhaps as much as 3 million
>

> OK?
>

> Looking forward to seeing you on Monday
>

> Soonmee and I both send our love from Napa. Though my vacations are
> beginning to sound a lot like yours
>

> Peter
>

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