Bankers Sue CSFB Over Loan Demands
Eight Los Angeles investment bankers are suing Credit Suisse First Boston Inc., seeking to prevent the firm from trying to force the repayment of loans the bankers received when they were with Donaldson Lufkin & Jenrette before the latter was acquired by CSFB in 2000.
The bankers, who jumped ship to rival UBS Warburg shortly after CSFB bought Donaldson, say in a complaint filed in U.S. District Court that CSFB and UBS resolved disputes over their hiring in 2001, and that CSFB released the bankers from any future legal claims.
But CSFB recently sent letters to the bankers demanding repayment, the suit said.
The bankers, including Jeffrey Raich, formerly Donaldson’s managing director in charge of West Coast mergers, and William Baumgart, formerly vice president of leveraged finance, say they “seek a declaration that CSFB has released its claims and that plaintiffs do not have to pay any monies to CFSB for the loans.”
CSFB spokeswoman Victoria Harmon said the company “intends to vigorously enforce our rights with regard to this action.”
Raich received a $1-million interest-bearing loan from Donaldson in May 2000, and Baumgart received $523,750. Loans to the other employees ranged from $275,000 to $900,000.
Donaldson had a large Los Angeles banking team, many of whom had gone to the firm after the demise of one-time junk bond underwriting leader Drexel Burnham Lambert in 1990.
From Bloomberg News
and Times Staff Reports
