The Champagne Case

In one of the longest, bitterest and most expensive trials in business history, a California jury had watched a battle between a $700 million corporation and an ex-employee for 97 days of court sessions. The ex-employee, Emmett Steele, 45, former director of military relations of California's widespread Litton Industries, charged in a civil suit that he had helped to found Litton in 1953. He had, he said, persuaded Charles Litton to sell his electronics company to present Litton Chairman Charles ("Tex") Thornton and his associates, had later used his connections to help Litton Industries procure important contracts--in return for which he had been promised a fifth of the founders' stock. Thornton and other Litton executives adamantly denied making any promise to give Steele the stock, belittled his executive contributions during his five years with the company.

Last week, after hearing 64 witnesses and listening to brain-numbing testimony that covered 18,020 pages of transcript, the jury chose to believe Steele. It awarded him a fat $7,500,000 as compensation for the 62,000 shares of founders' stock that he claimed had been withheld from him in 1958.

Evaluating the same testimony, Superior Court Judge Frederick Mahl, who presided at the trial, came to a different conclusion about other claims made in Steele's suit. The judge said that Steele had not convinced him of his founder's role or the promise of stock, turned down his bid for the stock itself, now worth $24.5 million after splits and stock dividends. Mahl's ruling raises the possibility that he may yet throw out the jury's verdict. Steele, the man who had been derisively described in court as the gladhander, door-opener, court jester and party giver at Litton, seemed unconcerned. Sitting in his lawyer's office, he made known his immediate plans: a champagne party for the jurors.

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