Brief Fact Summary. In an article, Forbes Magazine (Defendant) stated that Marc Wilkow (Plaintiff) paid only $55 million on a $93 million loan. Plaintiff sued Defendant for defamation.
Synopsis of Rule of Law. Language that states an opinion without stating an outright lie is not the defamatory language required to maintain a cause of action for defamation.
Issue. Does Defendant’s article use false or defamatory statements?
Held. No. Judgment affirmed.
* Colloquialisms such as “pleaded poverty” do not imply that Plaintiff was destitute and failing to pay his personal creditors, an allegation that would have been defamatory. Read in context, the phrase conveys the idea that the partnership could not repay the loan out of rents received from the building’s tenants. Filing a bankruptcy petition is one way of pleading poverty.
* Although the article drips with disapproval of Plaintiff’s conduct, Defendant’s opinion about business ethics is not defamatory. Informing the reader about the nonrecourse nature of the loan might have made Plaintiff look better, but it would not have drawn the sting out of the article; that Plaintiff got to keep the property even though the bank lost $38 million.
* Defendant is entitled to state her view that an ethical entrepreneur should have offered the lender a batter bargain, such as allowing the bank to foreclose and take its $55 million with certainty.
* Although a reader might arch an eyebrow at Plaintiff’s strategy, an allegation of greed is not defamatory; sedulous pursuit of self-interest is the engine that propels a market economy. Plaintiff’s current and potential partners would have read this article as an endorsement of Plaintiff’s strategy; they want to invest with a general partner who drives the hardest possible bargain with lenders.
Discussion. In order to maintain a cause of action for defamation, the language must be false or defamatory. In this case, there was no statement that was false and it was not defamatory. The court makes mention that the article could have in fact helped Plaintiff.