Mr Moulton's Alchemy Partners venture capital firm is backing Owen Jones, the British chief executive of US-based Sheaffer, and his team, who want to buy the famous but loss-making brand. Sheaffer is now owned by Gefinor SA, a Geneva company representing a group of Middle Eastern investors who bought the business from Textron almost 10 years ago.
But the British are opposed by Bruno Bich, the formidable baron whose family firm BIC is valued at almost pounds 2.7bn on the Paris bourse. BIC is trying to block the planned MBO in the US courts.
Some eight weeks ago BIC, maker of goods ranging from cheap biros to windsurfers, announced in Paris that it had signed a deal to buy Sheaffer for about pounds 31m, less than the company's annual sales.
"We were surprised that BIC went exclusive," said Mr Moulton. "We were working with Sheaffer management to finance a turnround MBO and they had a right of first refusal to buy the business."
Mr Jones and his Sheaffer colleague Shane Dolohanty promptly exercised that right and countered with their own similar deal, backed by Mr Moulton's Alchemy Partners.
BIC responded by resorting to the courts and has succeeded in blocking the MBO at least until January, when a new hearing will take place.
Mr Moulton points out that BIC knew about the executives' right to buy when it launched its bid.
"It's true that Sheaffer's managers had a right of first refusal to buy the company," said Yves Mathieu, BIC's financial comptroller in Paris. "Our position is that they didn't exercise it - it was Alchemy that did."
The two sides also dispute how loss-making Sheaffer will survive the next few months including the important Christmas selling season. Asked how the company will survive until January, Sheaffer's Mr Jones replied: "That's a good question." Other than that, Mr Jones would not comment on the legal row beyond stating he "fully intends" to go ahead backed by Alchemy.
According to Mr Moulton, BIC is obliged to supply seasonal working capital. "But it will be interesting to see BIC writing cheques to a couple of managers they are trying to sue."
BIC says there is no such deal. "We have not injected any money in Sheaffer so far and we don't intend on doing so until we officially own it," said Mr Mathieu.
If the Sheaffer executives and Mr Moulton do eventually win the battle for the pens it will be a sweet victory. A decade ago Mr Moulton, then at Schroder Ventures, helped arrange a pounds 60m MBO of Parker Pens from then- owner Manpower.
That deal alone created a few millionaires, among then former Parker chairman Jacques Margry, since Gillette bought out Parker Pens for pounds 285m, nearly five times as much, in 1993.
Mr Margry is now on the advisory board of Alchemy, which Mr Moulton set up in January this year.
Last month Alchemy paid a "nominal sum" to buy the AG Stanley home improvements business from Boots. The Stanley purchase was one of the worst deals Boots has done, with the high street retailer writing off pounds 180m on selling the business to Mr Moulton.
Additional reporting by Betsy Jelisavcic.
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