Published: July 10, 2007

Cerberus Capital Management President William L. Richter Named in Fraud Lawsuit

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Car Rental Agency Founder Files Complaint Against Former Rent-A-Wreck Officer

William L. Richter, senior managing director and president of Cerberus Capital Management LP (CCM), as well as CCM co-founder with Stephen A. Feinberg, has been named in a lawsuit filed by David Schwartz, founder of Rent-A-Wreck (RAWA), the national car rental company he established in 1968. This complaint was made public in response to recent news articles erroneously implying that the lawsuit had been settled in a jury trial.

The complaint charges Richter and other directors of Rent-A-Wreck with fraud and misuse of corporate assets. Richter served in various capacities with Rent-A-Wreck from 1983 until January 2006, including a director and vice chairman. Also named in the suit is Kenneth Blum, Sr., a former Rent-A-Wreck president, who was accused of misusing company resources for personal use. Richter and Blum also entered into an agreement in 2006 to merge Rent-A-Wreck with MBFG, Inc., a wholly owned subsidiary of J.J.F. Management Services. Further, Richter and Blum delisted Rent-A-Wreck's stock following the passage of the Sarbanes-Oxley Act. This caused the value of the shares to drop dramatically.

Rent-A-Wreck provides low cost rentals and high quality customer service across the United States and internationally. Cerberus holds controlling or significant minority interests in companies around the world, which currently generate more than $60 billion in annual revenues.