Sculptor directors backing Levin have made it clear that "they favor only one result — the preservation of management's jobs and compensation, at the expense of shareholder value," Och said. The suit was filed in Delaware Chancery Court.
The accusations are "baseless," Sculptor's special board committee handling the sale wrote in a statement, vowing to fight Och's lawsuit.
"His ongoing campaign against the company, including his conduct throughout the special committee's process, has cost stockholders significant value," the panel said. "His complaint is replete with materially misleading statements, and Sculptor intends to vigorously defend itself."
Rithm also came out against the suit. "We strongly disagree and dispute the allegations" against us, it said in a statement Oct. 18, adding that it remains "resolute in our commitment to this pending transaction."
Sculptor shares fell 0.65% to $12.23 at 10:13 a.m. in New York. The stock has lost more than half of its value over the past two years.
The lawsuit is the latest twist in Och and Levin's yearslong battle over the future of Sculptor. Och tapped Levin to take over the firm, formerly known as Och-Ziff, in 2017, but the two later fought over compensation and control. Och — who remains one of Sculptor's biggest shareholders — has since become a fierce critic of Levin's handling of the fund.
"The proposed merger reflects just the latest step in a long line of actions by which the directors have demonstrated that they are beholden to Mr. Levin and place his interests over the stockholders' interests," Och's lawyers said in the suit.
Last month, another Sculptor shareholder sued in Delaware over the Rithm deal, accusing Levin and the board of unfairly blocking investors from considering the Weinstein group's higher bid. Judge Sam Glasscock III on Oct. 17 agreed to handle that case on a fast-track basis, according to Joseph Christensen, an attorney for the shareholder.
In his suit, Och asked the court to bar Rithm from voting new shares of Sculptor stock acquired from Delaware Life Insurance in the form of warrants. Those shares — added to those held by Sculptor's current management — give Levin and his supporters two-thirds of the voting power they would need to approve the Rithm offer.
The case is Och vs. Engel, 2023-1043, Delaware Chancery Court (Wilmington).