Thursday, September 01, 2005
Jurors decide Axelrod must pay $20.2M
A Monmouth County civil jury today found that jailed philanthropist Herbert Axelrod defrauded a California company that bought his publishing firm in 1997, ordering the elderly millionaire to pay $20.3 million.
The verdict against Axelrod could grow significantly when the jury reconvenes next month to determine whether Axelrod also should pay punitive damages in the case.
The $20.3 million that Axelrod must pay Central Garden and Pet Co. represents $10.3 million in compensatory damages and the repayment of a $10 million loan granted to Axelrod.
The jury did rule for Axelrod and his wife, Evelyn, on one important point, finding that Central Garden breached its promise to keep them both on as highly paid consultants after the sale closed. Central Garden must pay the couple a combined $3.7 million.
The two sides filed suit against one another in 1998, less than a year after Central Garden acquired Axelrod’s firm, TFH Publications, for $70 million in cash and the $10 million loan. Axelrod claimed Central Garden’s executives mismanaged TFH and depressed its earnings. The California company claimed Axelrod lied to them about the financial health of TFH.
Central Garden had been seeking $55 million and repayment of the loan.
Axelrod had no visible reaction to the verdict. Lawyers on both sides will remain under a gag order until the question of punitive damages is settled. The trial began in April.
Axelrod, a well-known collector of rare violins, is probably best known for his 2003 deal with the New Jersey Symphony Orchestra. Axelrod sold the orchestra 30 rare violins and other instruments, valuing them at $50 million. A subsequent Star-Ledger inquiry found the collection worth half that.
Click here to read The Star-Ledger Special Report: False Notes.