Opinion ID: 173907
Heading Depth: 1
Heading Rank: 3

Heading: Attempts To Bring Clients to Stein Roe

Text: At the time Brundage was sold to Bessemer, Branin managed about $450 million in investments, more than ten percent of the approximately $4.1 billion managed by Brundage immediately prior to the sale. Once Branin joined Stein Roe, the company began crafting and implementing a strategy to entice Branin's former Bessemer clientsmost or all of whom had come to Bessemer with him from Brundage to move their business to Stein Roe. This strategy included a new schedule of fee rates to be charged to clients that followed Branin, under which clients' fees would not thereby be increased. He and Stein Roe had some initial success. By the following summer, around thirty of Branin's former clients, representing $205 million in assets, had transferred their accounts from Bessemer to Stein Roe, accounting for all but around $23 million of the assets Branin managed at Stein Roe. Branin did not contact his clients directly to ask them to follow him to Stein Roe. He did, however, respond to their inquiries when they asked why he left and, if they requested information about the new firm, he sent them material about his new firm. According to the district court's memorandum opinion and order, Branin's standard answer to clients who asked why he left Bessemer was that `a firm like Stein Roe was far more appropriate for me, . . . that the method of dealing with clients, that the approach whereby portfolio managers managed the client portfolios and interacted directly with the clients was more . . . appropriate for my training and experience of 30 years in the business.' Bessemer Trust Co., N.A. v. Branin, 427 F.Supp.2d 386, 391 (S.D.N.Y.2006)( Bessemer I ) (quoting Joint Statement of Undisputed Facts, Exh. A to Pre-Trial Order dated August 3, 2004) (Joint Statement of Undisputed Facts) (ellipses in original). Branin did not say or suggest that Stein Roe's approach would be better or more appropriate for any particular client, nor is there evidence that Branin explicitly disparaged Bessemer. The evidence introduced at trial established that Branin had individual meetings, either alone or with other Stein Roe employees participating, with representatives of two former clients with accounts at Bessemer: the Palmer family and Glen Raven, Inc. Their accounts were in the approximate amount of $117 million and $16 million, respectively.