Elliott Management Releases Klaus Kleinfeld's "Veiled Extortion" Letter

Tyler Durden's picture

Three days ago Arconic's CEO Klaus Kleinfeld was fired unceremoniously for "showing poor judgment," in a letter sent to Paul Singer, founder of hedge fund Elliott Management. Elliott has just released the letter and its response which claims Kleinfeld made "veiled suggestions that he might intimidate or extort Mr. Singer" over his behavior at a 2006 soccer match... involving "singing in the rain... in a fountain" and an indian head-dress.

Mr Kleinfeld wrote...

Dear Mr Singer,


In the last eighteen months, we have enjoyed the unique attention and unlimited pleasure of multiple exchanges with various representatives of yours in every such way remarkable firm. Unfortunately. we have not yet had the pleasure to meet. More than once have I been wondering what a special person the founder of such a firm must be.


It was much to my delight when I recently learned from Berlin what a phenomenal soccer enthusiast you must be. Quite a few people who accompanied you in Berlin in 2006 during and especially after the many matches you attended are still full of colorful memories about this obviously remarkable time; it indeed seems to have the strong potential to become lastingly legendary. How you celebrated your soccer enthusiasm and the "great time" you must have had in your Berlin weeks - unforgettable without a doubt - left a deep impression on them.


As a token of my appreciation to learn about this completely "other side" of you, I allow myself to send you a little souvenir, which might bring back some "vivid (hopefully positive) memories": The official match ball of the FIFA World Championships 2006 (called "Teamgeist", in English "Team spirit"). I would be honored if it found an adequate place on your memorabilia shelfs.




Klaus Kleinfeld


PS: If I manage to find a native American Indian's feather head-dress I will send this additional essential part of the memories. And by the way: "Singing in the rain" is indeed a wonderful classic — even though I have never tried to sing it in a fountain.

Which seems innocent enough until you read the response from Elliott's chief counsel to Arconic's board...

Dear Directors of Arconic Inc. ("Arconic" or the "Company"):


I am the General Counsel and Chief Legal Officer of Elliott Management Corporation. On April 11, Paul Singer received the attached letter and a soccer ball, both apparently sent to him by Klaus Kleinfeld.


As for the letter, it appears to have been sent from Dr. Kleinfeld because it is on stationery with his name printed on it, it appears to bear his signature, it was sent from Arconic's offices at 390 Park Avenue, and it was delivered by an Arconic messenger. Assuming therefore that the letter is from Dr. Kleinfeld, we find it to be an irresponsible and inappropriate communication. While much of what it says doesn't make sense, we do understand Dr. Kleinfeld to be making veiled suggestions that he might intimidate or extort Mr. Singer based on Mr. Singer's family trip to Germany in 2006 when he attended the World Cup. This is highly inappropriate behavior by anyone and certainly by the CIO of a regulated, publicly traded company, in the midst of a proxy contest, and it raises a number of obvious issues. Further, we assume that: (I) Dr. Kleinfeld was not authorized by the Board to make this communication, and (2) you will assess with your counsel, as we will, the implications of this unusual communication to a dissenting shareholder in the context of a proxy process.


Dr. Kleinfeld should understand that this conduct will not inhibit Elliott's efforts on behalf of shareholders. We are interested in shareholder value and putting Arconic on the right track, not games and false innuendo even if couched in clever ambiguities.


If the letter is not from Dr. Kleinfeld, as unlikely as that seems, then I think he and the Board need to know that someone purporting to be him, using your building and messenger service, is behaving in an irresponsible manner. I am certain that you would want to know about that and stop it. Of course, we expect that you will let us know if this is not in fact a letter from Dr. Kleinfeld and tell us what steps you are taking so that we may likewise take appropriate steps.


Yours truly,


Richard B. Zabel

We can only imagine what shenanigans Mr. Singer was up to. But this does indeed reflect crushingly on Mr. Kleinfeld - is this really the way the world works?

Full original letters here.

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NidStyles's picture

Ever notice how only the Goy gets caught and charged?

evoila's picture

I wonder if Richard Zabel is related to Louis Zabel in money never sleeps

chumbawamba's picture

What a bunch of prissy faggots, all of them.

Please, Lord, bring on the economic deluge that will drown these nephilim and erase them from our memory.

I am Chumbawamba.

fx's picture

The folks at Eliott not only have thin skin but likely very small hands, too.

jmack's picture

make up your own jokes about kleinfeld and why this isnt front page news...    http://jimromenesko.com/2014/08/21/this-is-why-you-should-never-put-a-ba...

ebworthen's picture

WWHS?  (What Would Hiawatha Say).

SoDamnMad's picture

So  unless Mr Singer was butt naked in the fountain with a bunch os similarly dress women of ill repute, he sounds like a pretty neat guy at a World Cup soccer match. Since he wasn't in this condition because surely videos would have surfaced shortly after 2006, I think this was NOTHING.

Inside Mr.Zabel's letter should have been a hand-written, unsigned note stating the following.

If Mr. Kleinfeld wants a pissing match, we can piss too. We will send a half dozen, well paid, dogs-of-war to collect Mr. Kleinfeld and take him to the forest for our "fountain ritual".  Perhaps a warm-up of some water boarding followed by a secure lashing to a tree where we will test the stength of a Louisville slugger on every bone in his body (all 206) following by dosing a leg in lighter fluid and setting it on fire.  Mr. Kleinfeld will then be delivered to his office in a bag shortly before the start of the next business day.  Ya wanna play?

napper's picture

you sound experienced in such matters


trained by the CIA? or the Mossad?

Scuba Steve's picture


C'mon Tylers

napper's picture

To make things a little funner, if it's not Kleinfelds, it's probably the Mossad.


Isn't  "Kleinfelds" a name of Israeli origin?

Bunga Bunga's picture

"singing in the rain... in a fountain" must be the code word for 'golden shower' on Wall St.

Frito's picture

Obscure Clockwork Orange reference, maybe?

Twee Surgeon's picture

I have this problem with many of my Clients, I tell them to just stay in their Caverns under the hollowed out Volcanoes on their private Islands, Do they listen ? No, Never.

They have tons of Hot Chicks and a Bunch of Dudes in Jumpsuits to take care of the little railway system and the giant computers. You'd think they'd be happy with all that, but no. They have to keep running off to Soccer games and International Conventions and stuff.

You just can't please some people.

Harry Lightning's picture

If Arconic fired its CEO because of that letter to Singer, it has a lot more problems than a takeover battle. There was nothing threatening or extorting at all in that letter, just a playful jab in the ribs for a hostile shareholder who is causing a lot of unnecessary problems for the company. I shudder to think what happens to Arconic if a guy as thin-skinned as this Singer character appears to be gets to have any say in how this company is run.

I think this incident exposes a much larger problem for this company, namely that it appears to have poor judgment in selecting its leadership. I noticed that the fellow who presided over Merrill Lynch in the first decade of the 2000's, and who played a significant role in the catastrophic decisions that destroyed that investment dealer, presently sits on the Arconic Board of Directors. Why anyone would want advice from that fellow is unimaginable to me. Yet he sits on the Arconic Board of Directors, which perhaps help explain why this company has some of its present troubles.

HRH Feant's picture
HRH Feant (not verified) Apr 20, 2017 12:16 AM

A soccer game, fountain, and an Indian headdress? WTF? Did I just fall into the fucking sewer?

I'll be back in an hour after I shower. In filtered water and after scrubbing my skin raw.


ds's picture

Nothing here. Move on. A sore loser. Come back if with substance as a whistle blower. Shareholders of Arconic have gained from the drain of a prankster. Singer is however, no angel, but what he did had nothing to do with business.


Last of the Middle Class's picture

One banker taking pictures of another's hookers and blow? Things are getting desperate.

SurfinUSA's picture

Have you ever heard of a bunch of tighter asses than Elliott Management?  Assholes ready to sue at the drop of a pin.  I am a capitalist but if those shiny pants motherfuckers flushed themselves down the toilet with their ignoramous decisions, I'd laugh my ass off. 

Get a grip... you're here maybe 80 years if your lucky.  What a legacy.  Singer's power won't buy him another breath so check yourself you pompous ass.