IT’S a tale that includes a string of rabbis from Oxford to Argentina with thousands of investors in tow, and meetings with high-powered money men throughout the world.
Throw in a supposed telephone call from Neale Daniher, coach of the Melbourne football team, and conversations in Yiddish about who should get what, and you wind up with some of the colour behind a bitter legal battle being played out in the Supreme Court.
In one corner is Joseph Gutnick and in the other is his former bosom buddy and one-time stockbroking confidant Levi Mochkin.
Both men are adherents of the Lubavitch movement, an orthodox sect of the Jewish faith.
The dispute is slowly — very slowly — working its way through the courts; it has yet to go to trial, even though Mr Mochkin started the litigation ball rolling in 2001 when he sued his old mate Mr Gutnick, who promptly counter-sued.
The nub of Mr Mochkin’s claim, among other things, was that he was entitled to 10 per cent of the value of the Gutnick empire.
In turn, Mr Gutnick counter-sued Mr Mochkin, claiming, among other things, the repayment of millions of dollars.
He said that he and Mr Mochkin were prohibited by Jewish law from turning to the civil courts to resolve their disputes and that they were required to resolve them according to Jewish law.
The matter has been in and out of courtrooms for a host of procedural hearings and was due to be finally heard next month.
But delays in assembling material for the court case means that it will not be heard until later this year or even next year — two decades after the events in question and long after Mr Gutnick assembled mining companies valued at about $3 billion.
In his heyday, Mr Mochkin built up an extraordinarily large one-man-band stockbroking business and had shares in Gutnick-associated companies worth up to $100 million. Mr Mochkin prefers not to comment on the court case, but Mr Gutnick says: “I’m ready (for it) and I’m tired of the procrastination.”
Mr Mochkin claims, in a document filed with the court, that he and Mr Gutnick in 1988 reached an understanding that they would work together closely and that Mr Mochkin would give advice on raising money for the Gutnick companies.
“When Mr Mochkin was not physically with Mr Gutnick, Mr Gutnick was in constant contact with him by telephone,” Mr Mochkin’s claim stated.
“Mr Mochkin made himself available to Mr Gutnick 24 hours a day, seven days a week and Mr Gutnick had recourse to Mr Mochkin accordingly,” it went on.
A Gutnick defence document filed with the court said that from March 1999 Mr Mochkin began asking for financial help, “saying in substance that he had large overheads and a new information technology business which he wanted to get off the ground, he couldn’t sell his shares at the prices needed to repay his debts and that his earnings from brokerage had decreased and as a result he needed money from Mr Gutnick”.
Mr Gutnick refused, saying Mr Mochkin “had been spending too much of his money on his house and acquiring valuable Judaica, paintings and books”.
Alleging Mr Mochkin made various claims and threats, Mr Gutnick claimed Mr Mochkin threatened to dump his shares in various Gutnick companies, destroy the market price of the shares and cause Mr Gutnick’s financiers and bankers to make margin calls.
Mr Gutnick said Mr Mochkin kept contacting him and that he rang when Mr Gutnick was president of the Melbourne Football Club.
“On one occasion Mr Mochkin rang Mr Gutnick on a Sunday during the football season and said to the person who answered the phone that Neale Daniher was on the phone. Mr Gutnick took the phone call believing the caller was Mr Daniher when in fact the caller was Mr Mochkin who repeated the claims and threats.”
Mr Gutnick says he was induced to enter into an agreement — described by the Mochkin camp as a settlement agreement — in 1999 with Mr Mochkin by “claims and the threats which constituted economic duress”.
He wants the agreement to be set aside.
A document filed with the Supreme Court by Mr Mochkin’s lawyers stated that Mr Mochkin and Mr Gutnick frequently discussed the money he was entitled to.
“On one such occasion while travelling on an aeroplane from New York to Melbourne in or about 1991 or 1992 Mr Gutnick and I discussed the percentage I was to receive,” Mr Mochkin stated.
He told Mr Gutnick: “Isn’t it remarkable that the decision we made to work together in 1988 has been so positively and publicly endorsed and encouraged and blessed by the rebbe.”
This was a reference to the spiritual mentor of both men, the late Rebbe Menachem Schneerson of the Lubavitch movement.
“We then spoke about that now, with the blessing of the rebbe, our success together was assured; beyond our previous optimism.
”Further, Mr Gutnick agreed with me that the blessing of the rebbe was an acknowledgement of the central role I had and was to continue to have in the business of Mr Gutnick and his companies.
“At that point I said: ‘I deserve 20 per cent.”’
“Mr Gutnick replied with words to the following effect: ‘Ten per cent or 15 per cent is a lot of money, be happy. I told you if I’m worth $1 billion you will be worth $150 million, but we will talk more. I’ll take care of you.”’
Mr Mochkin also stated he introduced Mr Gutnick to a string of people around the globe, including rabbis, money men and investors, including George Soros.
“We had a meeting with Mr Soros in his office in New York, at which I introduced Mr Gutnick to Mr Soros and we discussed the rebbe’s prophesy.”
He said he had introduced Mr Gutnick to 13 rabbis with the aim of finding investors to invest in the Gutnick stable of companies.
“The investors referred to were in the many hundreds if not in the thousands. They were contacted over a period from 1989 to 1998. I cannot remember all of them,” Mr Mochkin said.
He said he introduced Mr Gutnick to such investment and investment banking groups as National Mutual, Equity Link, Quantum Dolphin Fund, Fidelity, Salomon Brothers, Goldman Sachs, Merrill Lynch and Frank Lowy.
Sooner or later, unless the two men settle their differences out of court, a judge will have the job of trawling through the evidence and deciding just who owes what to whom.