When Neal Greenberg met Leonard Cohen over dinner in 1996, the Boulder banker gushed that it was a rare honor to dine with the iconoclastic writer and musician -- a celebrity since the late '60s for his cerebral, soul-baring songwriting. They ate and talked, and within several months Greenberg was responsible for investing and managing the bulk of Cohen's fortune.
Nearly ten years later, millions of dollars that Cohen had invested through Greenberg's Boulder-based firm, the Agile Group, are gone. But Greenberg would like everybody to know that, to quote a Cohen song, the deal is rotten, but it isn't his fault. So last month, he filed suit in Boulder District Court, claiming that Cohen and his attorney, Robert Kory, had conspired to falsely blame him for Cohen's financial woes and had threatened to use Cohen's celebrity to extort money from Greenberg.
Leonard Cohen, a conspirator? The artist who lived for five years as a Buddhist monk?
In 1996, the same year that Cohen entered the Mt. Baldy Zen Center in California, Greenberg was hired to look after more than six million dollars that Cohen generated when he auctioned off portions of his intellectual property -- culled from a lucrative catalogue that included such hits as "Suzanne" and "Hallelujah" -- to Sony Music International. Notoriously unapproachable, Cohen rarely handled business matters himself: Kelley Lynch, his partner and manager, had done his bidding since they'd commenced an on-again, off-again romantic relationship in the '80s. Lynch opened his fan mail and bills, brokered deals with his record company and fielded questions from his attorneys, accountants and bankers, including Greenberg.
In 2001, Greenberg's company took over the management of a new influx of assets from a second sale of Cohen's work to Sony, which grossed approximately eight million dollars. Yet over the next few years, even as the firm's investments regularly turned monthly profits, the balances dwindled. According to the lawsuit, Lynch made frequent withdrawals of hundreds of thousands of dollars, telling Greenberg that the money was for Cohen, to support his "extravagant 'celebrity' lifestyle." Whoever and whatever the money was for, Greenberg was legally bound to release it: By granting Lynch power of attorney and a majority ownership in a corporation created to manage his assets, Cohen had given Lynch free rein over the funds.
In January 2004, Greenberg sent Cohen one of many letters warning that he was on course to go bust.
"I don't know much about your ability to create another album and sell it, so I can't speak to that," Greenberg wrote. "But I do know that at the rate funds are being withdrawn, you will run out in a few years... I URGE YOU TO CURB YOUR SPENDING. It is at a very dangerous level."
In October, Cohen ended his relationship with Lynch, both professionally and personally. He began looking closely at the accounts she'd managed for him, and eventually told Greenberg that he suspected Lynch had been forging his signature, withholding information and taking his money. "Cohen claimed that Lynch was using the money to support a gigolo and to fund shopping sprees at Neiman Marcus," Greenberg's suit reads. Elsewhere, the complaint states that Cohen told Greenberg he'd never received any "subsequent written warnings about his excessive spending, and that Lynch 'must be intercepting his mail.'"
Cohen soon got a new lawyer, Robert Kory, a Hollywood attorney known for his aborted attempt to build a Wizard of Oz theme park on a polluted ammunition plant outside of Kansas City. A former leader of the transcendental meditation movement, Kory shared Cohen's interest in Eastern philosophy and his taste in women: Kory's ex-wife is Cohen's current girlfriend, the singer Anjani Thomas. According to Greenberg's suit, Cohen and Kory also shared a plan to deceive him.
The lawsuit alleges that when Kory entered the picture, the blame for Cohen's financial woes shifted from Lynch to Greenberg. Rather than try to get money from Lynch, Cohen suggested that Greenberg's insurance policy should cover his losses. According to the lawsuit, Cohen told Greenberg to "be a man" about things, saying, "Please do talk to the insurer. A great deal of suffering can be avoided." When Greenberg didn't go for being the scapegoat, his suit contends, Cohen and Kory threatened blackmail and intimidation to get him to come to the table.
"Cohen and Kory... began to threaten to publish false statements about Greenberg with the intent of harming" his business, the lawsuit reads, "such as by indicating that unless Greenberg obtained insurance funds to satisfy Lynch's alleged obligations to Cohen, Cohen would go out on tour to promote his new album and give interviews to reporters in which he would insinuate that he was touring because he had been bankrupted by improprieties of Greenberg and other financial advisors.
"Greenberg was selected as a target not on the basis of any genuine potential for liability to Cohen, but rather out of the perception that Greenberg... out of fear for his reputation, would prove an easy target to shake down."
In April, Kory sent a letter to Greenberg, urging mediation and a settlement to recoup some of the eight million dollars they claimed he'd allowed to dissipate. (Kory attached a copy of a glowing newspaper article about Cohen -- which hinted the artist might win a Nobel prize -- suggesting that Greenberg might "find it interesting.") Instead, Greenberg and his attorney, Sherab Posel, started building their own case. That same month, they arranged for a meeting at Denver International Airport, where they planned to show proof that Greenberg had acted properly and that Cohen knew, or should have known, what was happening to his money. Posel flew in from New York; neither Cohen nor Kory showed up. (They didn't respond to Westword's requests for comment, either.)
"We were left with no choice" but to litigate, Posel says. "Either we made an effort to try to present the facts and take our chances with the court of public opinion, or we simply allowed ourselves to be bullied into submission and pay lots of money for nothing other than averting the threat posed by Mr. Cohen and Mr. Kory no matter that it lacked any basis."
"It's a very unfortunate unfolding of events," he adds. "We are certainly hoping that they will come to their senses and stop what is very disturbing and unprofessional behavior."
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The claims in the case -- on all sides -- get even more disturbing. The lawsuit alleges that Cohen and Kory employed "tactics to terrorize, silence, or disparage" Lynch if she didn't take Kory and Cohen's side against Greenberg. One of the suit's wildest-sounding charges accuses the pair of instigating an incident in which the Los Angeles Police Department SWAT Team descended on Lynch's home and arrested her in her bathing suit; later, Lynch was involuntarily admitted to a psych ward and drugged. Lynch, who's suggested that Cohen's money dissolved due to his own lavish spending, has supplied documents and information to support Greenberg's case against Cohen and Kory.
After Greenberg and the Agile Group announced his lawsuit, Cohen chat rooms and fan sites seized on the banker as a greedy shark out to steal an artist's hard-earned cash. Yet while Greenberg's career has considerably less flash than does Cohen's, it's imbued with its own quiet distinction: After twenty years in the investment business, Greenberg now manages more than $550 million in assets. He's never been sued by a client for mismanagement of funds.
In a statement after the suit was filed, Kory described it as a "surprise attack" that was "completely consistent with Agile's reckless disregard for its client and his investments." Cohen's attorney, Joe DePlasco, cited Kory's statement when questioned by Westword. DePlasco and Kory have vowed to counter-sue. So far, though, no one's heard a peep about that; attorneys working for Greenberg and Agile have been unable to locate Kory.
As the song says, the deal is rotten...