Any hopes Mario Gabelli may have held that a dispute with his partners would be settled quietly have all but evaporated. The suit, which was first reported on last Sunday by the New York Times, was brought by two minority shareholders in Gabelli Group Capital Partners Inc., the holding company for his asset management firm.

Since the New York Times gave prominent play to the story last weekend it has been carried in syndication by local and regional papers and Tuesday Reuters picked it up.

Nothing in the suit, which was filed in November 2003 in a Rye, New York court by Frederick Mancheski and David Perlmutter, alleges any mismanagement in Gabelli's mutual funds. Rather, the pair accuses Gabelli of looting the holding company through excessive pay and by assigning a low book value to their shares. They are seeking a decision that would enable them to sell their shares in the firm.

A NY Times article discussing his $55 pay package in 2004 cannot be good for Gabelli's reputation with potential investors in light of the recent reports f CEOs taking excessive pay packages at the expense of shareholders.

The paper also hits Gabelli by noting that he is known for taking an aggressive stance against company managements that he feels are mismanaging their companies. It certainly does not miss the irony of the similarity in Mancheski's and Perlmutter's suit. 

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