Morgan Stanley International ex-chairman sues for over $15 million in unpaid fees

Legal battle launched over retainer, success fees.

In a high-stakes legal battle, Walid Chammah, the former chairman of Morgan Stanley International, has initiated High Court proceedings against the Austrian investment firm Signa, owned by Rene Benko.

The case, revealed by The Telegraph, centers on an alleged unpaid sum of €14 million ($15.29 million) in fees.

Chammah’s legal action comes as Signa faces significant financial challenges, recently relinquishing control of the iconic British department store, Selfridges, to Thailand’s Central Group. The dispute adds to the mounting troubles for Benko’s business empire, which is grappling with a severe liquidity crisis.

The claim revolves around an agreement purportedly made in a Mayfair private members’ club in 2015. Chammah, who served as an advisory board member for Signa, asserts that he was promised €14 million by Benko for advising on the acquisition of the German department store chain Galeria Kaufhof. Additionally, an agreement in 2016 allegedly included a €500,000 monthly retainer for Chammah, who led Morgan Stanley International between 2007 and 2012.

With a 33-year tenure on Wall Street, Chammah dedicated 19 of those years to Morgan Stanley. On his departure, he was praised by the CEO at the time as an innovator in the asset-backed securities field since its inception in the mid-1980s, Chammah’s career at Morgan Stanley has been marked by various high-level roles.

His journey at Morgan Stanley saw him overseeing global capital markets and investment banking divisions. Eventually, Chammah rose to prominent positions such as the co-president of the firm, culminating in his role as the chairman of Morgan Stanley International.

The acquisition of Galeria Kaufhof by Signa, completed three years later, was supposed to trigger the payment of Chammah’s success fee according to the Morgan Stanley alumni. However, Chammah’s legal team claims that despite repeated acknowledgments of the debt by Benko, including conversations in March and May 2023, no payment has been made.

This legal wrangle comes at a time when Benko’s Signa, which expanded into the British retail market in 2021 with a 50% stake in Selfridges, is under financial strain. Benko, once estimated by Forbes to have a net worth of around €6 billion, has recently been removed from his position at Signa, with shareholders enlisting restructuring specialists.

Signa, known for its investments in high-profile properties like the Chrysler Building in New York and KaDeWe in Berlin, is now seeking an emergency capital injection to stay afloat. The company, which has not yet filed its defense, was unavailable for comment. Similarly, Mr. Chammah has opted not to comment on the ongoing lawsuit.