A grandson of Marvin Davis, the onetime owner of 20th Century Fox, is embroiled in a family dispute over an investment in Palantir Technologies, which is due to go public next week.
Davis, a Denver oil wildcatter, bought 20th Century Fox in 1981 and later sold it to Rupert Murdoch. He died in 2004. His grandson, Alexander J. Davis, filed a lawsuit on Thursday against Kenneth D. Rickel, accusing Rickel of seeking an improper windfall from an investment fund with significant holdings in Palantir stock. Rickel is married to Nancy Davis Rickel, who is the mother of Alexander J. Davis.
Palantir is set to go public on Sept. 30 in a direct listing.
According to the lawsuit, Davis and his stepfather went into business together in 2011, with the aim of investing in late-stage technology firms. Their first venture, a fund that would invest in Twitter, ended in failure. According to the suit, investors balked when they discovered that Rickel had been penalized by the Securities and Exchange Commission for making illegal trades.
In early 2013, Davis asked his stepfather for an introduction to Joe Lonsdale, one of the founders of Palantir. That led to a successful fund that raised a $275 million investment in Palantir, according to the complaint. The deal led to a falling out between Rickel and Davis. Rickel accused Davis of cutting him out of the business, while Davis said he had informed his stepfather that he could no longer work with him due to his checkered background.
In the end, they reached a settlement in 2014 under which Davis would give Rickel $900,000, plus half of his share of the existing investments in Palantir and a quarter of his share of subsequent deals, according to the suit.
Rickel and Davis did not interact for the next six years. In June, in the wake of Davis’ brother’s death from a drug overdose, they reconnected. According to the complaint, Rickel raised the issue of the forthcoming direct listing of Palantir, and inquired about his share of the proceeds. In the subsequent discussions, Davis alleges, Rickel demanded a share of Davis’ other investments outside the initial fund.
“The plain terms of the Settlement Agreement bar Rickel from receiving such a windfall,” the lawsuit states.
Davis is seeking a declaratory judgment affirming the validity of the 2014 settlement.
Update: Rickel’s attorney, Pierce O’Donnell, issued the following statement:
“Alex Davis’s lawsuit against the stepfather who raised him, funded him, and bailed him out of trouble many times is the stuff of fiction. As will soon be seen, Alex’s lawsuit proves the wisdom of the old adage: ‘No good deed goes unpunished.'”
Update, Dec. 7: Rickel has filed a cross-complaint, blasting his stepson as a person “with a malignantly-flawed character; a miserable, dishonest personal life held hostage to his drug and alcohol addiction; and a checkered
business career marked by a succession of failures, pathological lying, and chronic cheating as his customary way of doing business.”
Rickel alleges that Davis is trying to cheat him out of at least $50 million in Palantir profits. In the cross-complaint, he goes into some detail about how he helped Davis get started as an investor, only for Davis to take the company they started together out from under him. He also alleges that Davis is seeking to renege on the terms of their settlement.
Update, Dec. 8: Davis’ attorney, Matthew S. Dontzin, responds:
“This is a sad attempt by a discredited investor to grab a payoff that our filing shows he neither earned nor is entitled to. Kenneth Rickel is trying to take advantage of his stepson’s success while simultaneously insulting him, calling him a “failure” and making other offensive assertions to distract from his deeply hurtful pursuit of money at the expense of family. Alex Davis honorably moved on from their partnership over eight years ago after his start-up was thwarted by Rickel’s prior securities law violations and went on to build an extremely successful business. Rather than celebrating his stepson’s success, Rickel is dragging Alex into court on meritless claims, showing that he values money above family or fairness.”