(Fortune Magazine) -- --Editor's Note: This story contains profanity.
Ronald Perelman may not be the most disputatious tycoon on the planet, but he sure spends a lot of time in the courtroom. Something about the bullet-headed billionaire engenders conflict. The list of formerly close associates and relations with whom Perelman has engaged in knockdown, drag-out legal battles includes a former chief financial officer of his company, a former vice chairman, and all four ex-wives. Perelman, evidently, has issues with exes.
So when the Revlon chairman sued his ex-father-in-law Robert Cohen and his ex-brother-in-law James Cohen in 2008, hardly anyone batted an eyelash.
Robert Cohen is the father of Perelman's late ex-wife, the society journalist Claudia Cohen. Perelman's suit sought to wrest control of half of Robert Cohen's fortune and bestow it on Samantha Perelman, the daughter he had with Claudia Cohen -- even though Samantha is one of six grandchildren who are descendants of Robert. Perelman argued that, as executor of Claudia's estate, he had a duty to sue, because decades ago Robert had promised the money to Claudia.
Even by modern standards of dysfunctional-family estate battles -- think of the Astor clan -- this one was a lulu. Robert Cohen is not a well man. He suffers from a rare neurological disease that has paralyzed him, rendering him all but speechless. He needs round-the-clock attention from a team of nurses who bathe, dress, and feed him, and make sure he doesn't choke.
But Perelman, it turned out, tangled with the wrong octogenarian invalid.
The Cohen family business, Hudson Media, is one of the largest regional magazine wholesalers -- it is, in fact, a long-standing business partner of Time Inc., the publisher of this magazine and other big titles including Time, People, and Sports Illustrated. The Cohen family, although not nearly as wealthy as Perelman, has built a major business fortune in three generations -- in 2008, Hudson sold its ubiquitous newsstand business for around $800 million.
But their business has been a rough-and-tumble one, especially in the early years. When the Cohens were fighting for dominance in the Hudson County, N.J., market, they had to deal with shakedown artists, racketeers, and even Mafia thugs. They are not pushovers.
Robert Cohen was 82 years old when he learned in February of 2008 that Ronald Perelman was mobilizing one of the most feared law firms in the country to sue him.
He responded by summoning the roughest trial lawyer he could find to his New Jersey office. That was Robert Gold, a former federal prosecutor whom a colleague described as having "just two gears: sleeping and tearing into red meat." Gold wasn't sure how much fight the old man had in him, and he told Cohen, "If you want a lawyer who will push papers around and ultimately capitulate, you should find someone else," according to someone in the room. "I'm the guy who fights."
"Bobby," Robert Cohen croaked, "I want you to fight him and fuck him."
There was no hint of the conflict to come on the warm, hazy day in June 2007 when a cavalcade of limousines glided up to Central Synagogue in midtown Manhattan for Claudia Cohen's funeral. It was the kind of A-list event that Cohen herself might have covered in her days as one of the city's preeminent gossip columnists: The boldface names in the crowd included Donald Trump, Jon Bon Jovi, and Calvin Klein.
To those mourners Claudia had been royalty. One of her former suitors was there: former Republican senator Alfonse D'Amato, who had announced his love for her at a press conference. The first love of her life was there too: her father, Robert Cohen, sitting erect in his wheelchair.
All eyes turned to Ronald Perelman as he gripped the lectern and stood behind his ex-wife's casket. Most people in the sanctuary probably knew the story of Perelman's highflying marriage to Claudia and their equally high-profile divorce. But until now few had heard how he had spent years trying to fund an experimental vaccine to treat her cancer. "She was my rock," Perelman said, choking up. "She was my confidence builder. She was the person who every night whispered in my ear that I could do it."
Perelman had met Claudia in early 1984. They were introduced by a mutual friend at what Perelman jokingly called his "cafeteria," the legendary restaurant Le Cirque. Three days later he asked her out on a date.
Perelman, then 40 years old, was on the verge of becoming a force on Wall Street. The grandson of a Lithuanian immigrant, he had been raised in a prosperous Philadelphia family. After graduating from the University of Pennsylvania and its Wharton School, he went to work for his father, Raymond, a fiercely disciplined and unsentimental buyout artist. He married Faith Golding, a real estate heiress. When he was 35, Ronald Perelman struck out on his own, borrowing money to buy a chain of jewelry stores. Then he acquired a stake in MacAndrews & Forbes Group, the licorice-extract maker that would eventually become his main holding company.
If Perelman's business career was on the takeoff runway, his personal life was a shambles. Golding filed for divorce, alleging that he was having an affair with a florist. She claimed ownership of the stake in MacAndrews & Forbes, saying she had put up collateral for the loan that allowed Perelman to acquire an initial share in the company. Perelman fought the claim, represented by none other than Roy Cohn, the notorious Red-baiter and mob lawyer. The two sides settled, and Perelman kept control.
Perelman's new love, Cohen, was a wealthy woman too. Though she earned around $50,000 a year as a TV society journalist, she lived in a spacious apartment on Central Park South. Her father paid her bills. When Perelman and Cohen went to Florida for a friend's party, Claudia was unhappy with their room at the luxury resort the Breakers. She had a car take them to her parents' oceanfront mansion in Palm Beach. Robert Cohen and his wife, Harriet, were having a drink when the lovebirds arrived.
"This is the nicest second house I've ever seen," Perelman told Robert Cohen after Claudia introduced him. Cohen was amused. Nicest second home? Why wasn't it the nicest first home? he asked.
Perelman conceded that it probably was.
The two tycoons would spend a lot of time together. They both liked the finer things, including cigars and Hermès ties -- Cohen had hundreds of them. Perelman, a shopping fanatic, kept suits arranged chronologically, based on the year he'd had them made.
Mindful of his fight with his first wife, Perelman asked Claudia Cohen to sign a prenuptial agreement in which she forswore any claim on his MacAndrews & Forbes holdings. In return he agreed not to seek any of her estate. Robert Cohen handled negotiations for his daughter. He told Perelman that she was a "very, very wealthy girl." Her prenuptial agreement "conservatively valued" her worth at $3 million.
Perelman and Claudia Cohen married on Jan. 11, 1985, in a service performed at Perelman's New York home by a surrogate court judge. A few months later Robert Cohen threw a party for the newlyweds at the nightclub Palladium, where the Pointer Sisters performed.
At the time Perelman was in the midst of a bitter takeover battle for control of Revlon (REV). Ten months after the wedding, Perelman finally took over the giant cosmetics concern; Robert Cohen accompanied his triumphant son-in-law to the Revlon office when the deal closed. After the takeover, Perelman was suddenly a billionaire. Proud as he was of Perelman, Cohen would often rib him, saying that unlike people who made their money playing games with debt, the Cohens built companies from the ground up and then ran them.
Indeed, Ronald Perelman had no idea of the kind of nerve it took to make it in the newspaper distribution business. Compared to that shark tank, Perelman's takeover world was a carp pond.
Like his new son-in-law, Robert Cohen had spent his formative years working for his hard-driving father. Like the Perelmans, the Cohens had roots in Lithuania: Robert's father, Isaac "Ike" Cohen, had come to the U.S. as a boy. He started his company as Bayonne News in 1918 in a small store in Bayonne, N.J. By the time it was renamed Hudson News in 1926, it was becoming the largest newspaper distribution company in Hudson County, N.J.
Robert Cohen started working at the company in 1947. A New York University graduate, Cohen was dashing, hard charging, and smart. Though he hadn't completed his studies at West Point, he maintained a military bearing. He and his wife, Harriet, a former concert pianist, had three children: Claudia, whom he nicknamed "Cupcake," and sons Michael and James.
Both Ike and Robert Cohen had brushes with federal authorities and with a prominent organized-crime figure. In the late 1950s federal investigators began looking at the relationship between wholesale distributors, including Ike Cohen and a notorious gangster named Irving Bitz.
Bitz, a former foreman for Hudson News, had ties to organized crime that went back decades. When the Lindberghs sought to open negotiations with the kidnappers of their baby, they hired Bitz. He also had a rap sheet that included narcotics and weapons charges.
In 1961, in exchange for immunity, Ike Cohen testified against Bitz in a bribery case involving corrupt union officials, but their friendship survived. Ike Cohen died two years later, and Bitz served five years in prison.
In the late '70s, federal prosecutors began investigating Robert Cohen and other wholesalers in a scheme that was nearly a duplicate of the one that had tripped up his dad. According to a New York Times story about the investigation at the time, the feds were interested in Cohen's relationship with Bitz, now out of jail, and organized crime. In 1981, Cohen agreed to plead guilty to 20 misdemeanor counts of bribing a union official.
"The crime you committed is a serious one," the judge told Cohen on the day of his sentencing. "It was motivated partly by greed, because you were looking to get an edge in your business ... if you could get these union hoodlums off your back, and you had no courage."
Robert Cohen got three years' probation and no jail time. Bitz fared worse: Five months later the tiny gangster was kidnapped and murdered. His body washed up on a Staten Island beach.
By the mid-1980s, things seemed back to normal for the Cohens. Robert was off probation, and business was booming.
The media spotlight was shining much brighter on Claudia Cohen and her husband, who soon became symbols of the excesses of the 1980s. Spy magazine made sport of their over-the-top home renovations. In his biography of Perelman, When Money Is King, author Richard Hack described how she ordered an enormous cooling system to replace an air conditioner that took 15 minutes to bring the temperature down from 90 to 78 degrees. "What I want from an air conditioner is you turn it on -- and it's cool," Claudia barked, according to Hack.
In 1990, Perelman and Claudia Cohen's daughter, Samantha, was born. Perelman and Claudia's relationship soured, and they divorced in 1994. Perelman was soon in love again, swooning over Patricia Duff, a striking Democratic fundraiser. Duff initially resisted Perelman's marriage proposal but acquiesced after becoming pregnant.
Though he was divorced from Claudia, Perelman still behaved proprietarily. They went to court over one of her expensive renovations. Perelman later testified that the dispute was "motivated by me being disturbed as to who she was dating at the time, and that individual's proximity to Samantha." That person was Sen. Alfonse D'Amato, according to people familiar with the matter. (D'Amato declined to speak with Fortune.) When Claudia stopped dating D'Amato, she and Perelman resumed their friendship, calling each other daily.
In the predawn hours of May 25, 2004, Claudia Cohen asked her best friend, Susan Hess, the wife of John Hess, the oil company scion, to help her write her will. She had been diagnosed a few years earlier with a virulent form of cancer, and it was getting worse. She wanted the Hesses to serve as her estate's executors.
By then the value of Claudia's estate had ballooned to around $60 million. She had been supported since her divorce by her father and by Perelman, whose divorce settlement with her included a $20 million cash payment over time, as well as $1.8 million annually until Samantha was 18. The will left the bulk of Claudia's estate to Samantha, with $5 million to go to her when she was 25, half of the remainder when she was 30, and the rest when she was 40.
As Cohen's cancer worsened, Perelman fought to save her. He convened a group of the best researchers to develop new approaches to her cancer. At a cost of millions they developed a tumor-specific vaccine, and Perelman worked behind the scenes to speed regulatory approval.
Tragedy had been stalking the Cohen family for some time. Claudia's younger brother, Michael, died suddenly in 1997. Her mother's mind had been lost to Alzheimer's. And Robert had been diagnosed with a Parkinson's-related disorder called progressive supranuclear palsy. It typically begins with gait and eye control problems, but can also affect speech, mood, and behavior. In reaction to his medications, he began having hallucinations.
Control of the company had been shifting increasingly to James Cohen, who, having spent much of his life in his father's shadow, now emerged as a formidable businessman in his own right. He spearheaded the company's immensely profitable drive into retail news and bookstores, which soon began popping up at major airports around the country. Sales in that business rose from zero to $650 million annually.
Robert Cohen's estate planning reflected his son's growing role in the business. Since Michael's death, James has been the sole heir of the companies. Claudia was provided for with other assets, including life insurance, jewelry, real estate, and Cohen's G5 jet.
Like his former brother-in-law, the younger Cohen lived large. For his new primary residence, he built a 25,000-square-foot mock-Tudor castle in Alpine, N.J. In a February 2007 article entitled "Windsor on the Hudson," Architectural Digest chronicled the construction of the home, which boasts 13 gables and 15 bathrooms.
Over the protests of historic preservationists, he paid $26.5 million to buy an old estate in East Hampton, where Perelman had his own grand home, according to court papers. He had the local fire department burn it to the ground as part of a training exercise, earning a tax deduction.
In 2007, Claudia checked into Memorial Sloan-Kettering Cancer Center. Her disease had spread, and the end was near.
What happened in her hospital room -- a VIP suite -- on the 18th of May, just a month before she died, is shrouded in controversy. On one thing the two sides agree: Perelman visited Claudia that day, and when he emerged, he was the new executor of her estate.
Perelman has testified that Claudia wanted him to be her sole executor and trustee, and that accordingly, he had summoned their trusts and estates lawyer, Matthew Kamens, to the hospital. Kamens brought along a copy of a 2002 will that hadn't been executed.
The lawyer testified that he crossed out the Hesses as executors and trustees, writing in Perelman's name instead. The terms in the new will were changed so that Samantha, then a teenager, wouldn't receive the money outright, as she would have eventually under the now voided 2004 will. Instead Perelman, as trustee, would have lifetime discretion over the principal.
The signing of the will was witnessed by Perelman's bodyguard and another lawyer. Kamens said Cohen was "mentally sharp, although clearly physically weakened and fatigued."
Today James Cohen believes Perelman took advantage of his sister's weakened condition to make himself executor, a position he used as a wedge to pry his way into their business affairs and eventually sue them, according to his lawyer Frank Huttle.
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