The WSJ has this very timely article in today's edition breaking down the three-ring-circus that was Morgan Stanley's effort to collect and produce responsive emails to Ronald Perelman in Perelman's high-profile lawsuit against MS. 

The WSJ article has a very detailed account of MS' travails, which reportedly included repeated discovery of additional backup tapes that might include responsive emails.  At one point MS "unearthed 1,423 computer-backup tapes in a closet in a Brooklyn office building."   Later, MS found 129 more tapes sitting on a metal shelf in one of its midtown Manhattan offices.

MS encountered plenty of other problems that the article lays out in detail.  The WSJ article notes that ultimately, the judge became so dissatisfied with MS' response that she ruled that its actions were in "bad faith" and that the jury could simply assume the MS helped defraud Perleman:

...Judge Maass issued a partial default judgment against Morgan Stanley, essentially handing an automatic loss to the Wall Street firm, because "the [discovery] abuses have continued unabated." The judge said she would instruct the jury to assume that the firm had helped defraud Mr. Perelman.

"The prejudice to [Mr. Perelman's side] from these failings cannot be cured," she wrote. "The judicial system cannot function this way."

Judge Maass stopped short of granting the default judgment in full. She ruled Mr. Perelman must prove he lost money on the transaction and that he relied on information provided by Morgan Stanley or Sunbeam in making his investment.

When the trial opened in early April, Judge Maass read the nine-person jury a lengthy statement, saying, in part: "Morgan Stanley participated in a scheme to mislead [Coleman] and others and cover up the massive fraud at Sunbeam until Morgan Stanley and Sunbeam could close the purchase of Coleman."

Not surprisingly, the jury appears to have found the judge's instruction pretty persuasive:  Bloomberg reports that this afternoon, a Florida state jury awarded Perelman $604.3 million in compensatory damages on his claims that Morgan Stanley defrauded him as part of the 1998 sale of his controlling stake in Coleman Co. to Sunbeam Corp.  Next the jury must decide whether to award punitive damages.

MS issued a statement this afternoon vowing to appeal:

"The verdict, while disappointing, is not surprising, given the unprecedented and highly prejudicial rulings imposed by the trial judge," the company said in a statement. "Morgan Stanley was not permitted to defend itself on the merits. As a result, the jury heard allegations, instead of true facts, and Morgan Stanley was denied a fair trial. Far from being part of the Sunbeam fraud, Morgan Stanley was a victim of that fraud, losing $300 million when Sunbeam collapsed, one of the many true facts that the jury was not allowed to hear."