The Predators’ Ball
Page 45
Farley Industries, 17
Far West Financial Services, 168
Federal Bureau of Investigation (FBI), 72
Federal Election Campaign Act, 259
Federal Home Loan Bank Board, 92, 115, 280
Federal Reserve, 37, 211, 212, 215, 264–65, 266
Federal Savings and Loan Insurance Company, 115–16
FGIC (Financial Guarantee Insurance Company), 283
Fidelity, 47
FIFI (First Investors Fund for Income), 33, 46–47, 56
Financial Corporation of America, 131
Financial Corporation of Santa Barbara, 343
Financial Guarantee Insurance Company (FGIC), 283
Finneran, Gerald, 353
Finsbury, 277–78
Firestone Tire and Rubber Company, 27, 30
First Boston Corporation, 30, 95, 248, 250, 253, 325
First City Financial, 168
First City Properties, 168
First Executive, 83, 89–90, 92–94, 124, 272, 276, 277, 281, 311
Atlantic Capital compared with, 280
First Investors Asset Management, 94, 277
First Investors Fund for Income (FIFI), 33, 46–47, 56
First Oak Financial Corporation, 280
First Stratford, 93, 281
Fischbach, 321–24, 352
Fitzpatrick, Dennis, 115
Flagstaff, 110, 111, 112, 160
“flexible balance sheet,” 75
Flight Transportation, 72–73, 306
Flom, Joseph, 101, 122, 157, 196, 206, 208, 226
Fomon, Robert, 41
food business, 109–11
Forbes, 58, 70, 124, 155, 209, 270, 272–73, 322
Ford Motor Company, 42
Forstmann, Theodore, 222, 226
Forstmann Little and Company, 99, 219–28, 231
Fortune, 335–36
14D documents, 133
Foxfield (Icahn estate), 189, 190
Fraidin, Stephen, 319
Frates, Joseph, 195
Frates group, 195–96
fraud, 72, 199–200
Freeman, Robert, 328–29
Freilich, Joseph, 151, 152, 153, 156
Freund, James, 106, 182
Friday, John, 43
Fried, Frank, Harris, Shriver and Jacobson, 317
Friedland, Joel, 15
Fruehauf bonds, 345
Fuqua Industries, 44
Fuss, Albert, 214, 277
Future Shock (Toffler), 246
futures market, 251
Gable, Clark, 53
GAF, 181, 213, 233, 245, 275–76, 287–88
Wickes compared with, 295
Galef, Andrew, 265
gambling operations, 58–60
Gandhi, Mohandas K., 357
Gardiner, Nancy, 236
Gam-St. Germain Depository Institutions Act (1982), 91
Garrison Capital Corporation, 280, 284
Gateway Advisers, 83
GBL (Groupe Bruxelles Lambert S.A.), 206, 323
Gebauer, Antonio, 254–55
Gelson’s (Encino supermarket), 53
Geneen, Harold, 194–95, 220, 239
General Electric, 256
General Felt Industries, 79
General Foods, 48, 221
General Motors, 94, 96
Gentry, Grant, 202–3, 220
Germaine Monteil, 234
Getty, Ann, 236
Getty Oil, 164
Giant (movie), 271
Gibson Greetings deal, 99
Gillette Company, 234, 333
Gittis, Howard, 197, 202, 212, 214–215, 224, 232, 237
Glaser, Donald, 128–29
Glass-Steagall Act (1934), 26
Gleacher, Eric, 101, 208–9, 217
GLJ (Milken investment partnership), 81, 82
Gluck, Henry, 308
Glucksman, Lewis, 48
Gobhai, Cavas, 62–66, 100–101, 149, 163, 176, 245, 296, 299, 344
Goldberg, Arthur, 112–14, 118
Golden Nugget, 17, 58–60, 83, 168
Golding, Faith, 196, 198, 201, 202
Golding Family, 198
Goldman Sachs, 26, 30, 42, 49, 65, 69, 152, 248, 251, 252, 253, 318, 334, 335
earnings of, 247
in financial scandals, 254–55
mergers and acquisitions and, 95, 98, 200, 206, 231
Goldsmith, Jerry, 152, 153
Goldsmith, Sir James, 14, 17, 149, 205
Good, Daniel, 128, 140
Goodyear Tire and Rubber Company, 251, 334
Goren, Alexander, 113, 160–61
Grant, James, 266–68
Grant’s Interest Rate Observer, 266
Great American, 36
Great American Management and Investment (GAMI), 305
great ideas, as “born bad,” 63
Great Lakes International, 118
Greenhill, Robert, 210, 220
greenmail, 18, 109, 118, 257, 263–264, 291
Icahn’s use of, 18, 109, 156, 157, 161–64, 169, 173–74
use of term, 155–56
Green Tree Acceptance, 290–91, 292, 326
Groupe Bruxelles Lambert S.A. (GBL), 206, 323
Gruntal, 151, 152
Guarantee Security Life, 134
Gulf & Western, 120, 161, 200, 258, 295, 322
Gulf Corporation, 231
Gulf Oil Company, 13, 100, 107, 164, 165, 167
Guterman, Gerald, 118–19
Gutfreund, John, 294
Hackel, Lori Anne, see Milken, Lori Anne Hackel
Hagin, Robert, 24
Hagman, Larry, 258
Halston, 236
Hammer, Armand, 258
Hammermill Paper Company, 156–158, 160
Harrad’s, 59
Harriman Ripley and Company, 26
Harris, Ira, 101, 122
Harris Graphics, 322
Hartch, Joseph, 294
Harvard Business School, 57, 277
Hayden Stone, 41
Hayes, Samuel, 270
Heffner, William, 146
Herrara, Caroline, 236
Hertzberg, Daniel, 320, 321–22, 329, 343
Hessol, Gail, 268
Heyman, Samuel, 149, 245, 275–76, 280
Milken’s granting of autonomy to, 287–88
Hickman, W. Braddock, 11, 28, 29, 33, 46
Highland, 154
“highly confident” letter, 166, 167, 182, 221, 250, 251, 290, 304, 344
use of term, 101, 106–7
high-yield bond funds, 46–47, 55–56
diversified, 46
high-yield bonds, see Chinese paper; fallen angels; junk bonds, junk-bond takeovers
Hilton Hotels, 17, 60
Hilton International Co., 233
HITS (Drexel’s high-yield mutual fund), 79–80
Hoffman, Robert, 325
Home Insurance, 290
Home State Savings Banks, 159
Horowitz, Harry, 24, 53, 243, 260
House of Representatives, U.S., 259, 260
Hovnanian, 347, 349
Hudson, Rock, 271
human-potential movement, 62
Hunter, Catfish, 195
Hunter, Sam, 253
E. F. Hutton, 16, 40, 41, 47, 65, 128, 140, 346
IBG (Investment Banking Group), 339–40
IBM, 94, 298
Icahn, Carl, 149–92, 245, 318, 332
ACF and, 19, 161, 164, 169, 173, 185, 186, 190–91, 201
Air Fund and, 102
background of, 150–51
bluff and bluster of, 158
career path of, 151–63
commitment letter demanded by, 165–66
control and autonomy concerns of, 149–50, 153, 156, 161, 163, 170, 186–87
as dedicated capitalist, 156
Drexel’s post-Phillips relationship with, 169–70
gambling of, 151, 157, 175
greenmail used by, 18, 109, 156, 157, 161–64, 169, 173–74
image-consciousness of, 172, 178, 186
lawsuits against, 157, 159–60, 171–72
lifestyle changes of, 189–90
managerial talents of, 185–86, 191
Marshall Field bid of, 113, 159–161, 189
Milken compared with, 154
Milken’s relationship with, 18–19, 170, 186–87, 288
National Can and, 125, 126–27
negotiating abilities of, 175–76
philanthropy of, 189
Phillips Petroleum and, 13, 19, 107, 163–71, 173, 191, 203
at Predators’ Ball (1985), 14, 17, 18–19, 170–71, 183
at Predators’ Ball (1986), 183
proxy fights of, 154–55, 157–59, 164–65, 168, 172
tight-fistedness of, 153, 189
TWA deal and, 19, 170–88, 191, 202, 263
Uniroyal and, 142, 143, 170
unpretentiousness of, 190
white knight transformation of, 175, 177
Icahn, Liba, 190
Icahn and Company, 149–92
formation of, 152
Kingsley’s departure from, 153–54
Kingsley’s return to, 154
partners removed from, 149–50, 153, 156, 160–61
Schnall’s stock in, 151, 153
Icahn Group, 179
ILP (Investment Limited Partnership), 278
income tax, 37, 96
evasion of, 139
trusts and, 34
inflation, 29, 96
Ingersoll, Bruce, 260
insider trading, Boesky Day and, see Boesky Day
Institutional Investor, 270, 307, 341–42
insurance companies, 134, 207, 272, 280, 282
Drexel’s displacement of, 246
private placements and, 45, 46, 100
interest rates, 63, 70, 71, 91, 263–64, 281, 283
leveraged buyouts and, 111, 137
National Can deal and, 137
Triangle Industries and, 108–9
International Nickel Company, 96
International Telephone and Telegraph (ITT), 194–95, 239
Investing in Junk Bonds (Altman), 268
investment banking, investment bankers, 63–66
agent mentality of, 64
gambling operations and, 59–60
institutional vs. entrepreneurial 65, 66
problems of medium-size companies with, 43
relationship vs. transactional, 63
traders vs., 63–64
Investment Banking Group (IBG), 339–41
investment-grade companies, defined, 27
Investment Limited Partnership (ILP), 278
Irell and Manella, 54, 82
Jackson, Brooks, 260
Jacobs, Alan, 89
Jacobs, Irwin, 14, 15, 17, 164
Jacobson, Ben, 111
James, Anthony, 169
Jamie Securities, 35
Japan:
debt-to-equity ratios in, 262
Milken in, 243–44, 316
Jaquith, Peter, 196, 219
Jefferies, Boyd, 318, 329
Jefferies and Company, 128, 318
Jefferies Group, 329
Jews, 150, 154, 160
anti-Semitism and, 29, 36, 205, 331
in Burnham and Company, 31
job-formation claims, 348–50
Joseph, Fred, 40–46, 48–49, 58, 65, 66, 71–75, 250, 287, 296, 314, 335–41, 351–54, 359
accountability factor of, 72–73
ambitions of, 40, 44, 251–52, 253, 255, 302, 333, 334
appointed chief executive officer, 251, 303, 336
background of, 40–41
Boesky Day and, 329, 335–37
career path of, 41
Drexel employee views on, 337
as “Dr. Feelgood,” 40, 341
“edge” development strategy of, 42–43, 44
Engel reinstated by, 338–42
finance department changes of, 43–44
Gobhai’s meetings with, 62–63, 100–101, 163, 176
Icahn and, 170, 171
Lipton and, 205
loyalty oaths considered by, 335
management problem of, 301
mergers and acquisitions and, 95, 97–98, 100–101
on Milken as contra-thinker, 70
Milken compared with, 40, 336, 337
as Milken’s face, 40, 50, 303, 335, 354
Milken’s first meeting with, 44
Milken’s investment disclosure to, 68
Milken’s yielding to, 303–4, 334–337
new paper invented by, 71–72
on overfunding, 290
on owner-managers, 67
political contributions of, 260
pragmatism of, 337–42
at Predators’ Ball (1987), 329
recruitment efforts of, 101, 176, 251, 253, 255
TWA deal and, 170, 171, 176, 182
Volcker and, 264
Joseph, Stephen, 251
“Joseph doctrine,” 170, 171
junk bonds, junk-bond takeovers, 12–15, 17–19, 44–49, 56–60, 90–100
allure of, 28–29, 46, 47
commissions on, 46
competition and, 47–48, 71, 209, 248–51, 287
congressional opposition to, 167, 203–7, 259–63
crafting and fine-tuning of, 13
default rates and, 77, 268
deterioration of, 268
Drexel controls on, 72
Drexel’s outrageous deals with, 72–75
explosion in (1983), 78–80
Friday’s criticism of, 43
Grant’s views on, 266–67
Hickman’s views on, 11, 28, 29
Icahn and, 13, 163–66, 178
issuance of, 71, 78, 198, 247, 268, 306, 350
Japan and, 243–44
job-formation claim and, 347–49
in leveraged buyouts, 98–100, 107–8
liquidity of, 46, 207, 285
margin rules and, 264–65
market sector of, 93
95 percent figure and, 348–49
origin of term, 39
Peltz-May use of, 14, 115–16
as percent of total corporate debt, 268
prejudice against, 29, 57
recession of 1980 and, 70–71
research on, 32
risks vs. rewards of, 11, 45–46, 73, 250–51
Rohatyn’s criticism of, 206–7
selling techniques for, 32
start of Milken’s interest in, 27–28
stock compared with, 28–29, 32
stock market crash (1987) and, 344
subordinated debt and, 45–46
Treasury bonds compared with, 94
“two-tiered, bust-up,” 204, 256
see also specific firms
Justice Department, U.S., 260, 264
Kamerman, Morton, 200, 220
Kaminer, Daniel, 151, 152, 153
Kansa General Insurance Company, 281, 283–84
Kantor, Edwin, 32, 34, 50, 51, 69, 83, 302, 308
Caesars World investigation and, 310–11
Kaplan, Mark, 34–35, 42, 59, 252
Katz, George, 14–15
Kay, David, 74, 97–98, 101, 116, 137, 164
Icahn as viewed by, 163
Posner as viewed by, 121–22, 140
Kennedy, Edward M., 259
Kerkorian, Kirk, 304
Keystone B4, 33
Walter Kidde, 156
Kidder Peabody, 95, 101, 161, 173, 176, 253, 255–58, 308, 328, 335
stock of, 256
Kindercare, 347
Kingsley, Alfred, 150, 152–54, 170, 187–89
background of, 152
TWA and, 172
Kissick, John, 298, 307, 308, 340
Klein, Calvin, 236
Kluge, John, 267
Knapp, Charles, 131–32, 146, 168, 284
Koerner, Gerald, 291
Kohlberg, Kravis, Roberts (KKR) and Com
pany, 65, 99, 125, 176, 245
Kravis, Henry, 125, 177, 245
Kroll, Jules, 72
Kugler, Michael (Jack), 253
Kuhn, Loeb and Company, 30
labor unions, TWA and, 172, 174–178, 181, 183, 184
Lambert, Baron Léon, 48
Lasker, Bunny, 230
Lautenberg, Frank, 258
Law, Warren, 262–63
Lazard Frères, 65, 101, 196, 225, 231, 318
in financial scandals, 254–55
LBOs, see leveraged buyouts
Lear Siegler, 257, 258, 295, 332, 334
Leasco, 36, 83
Le Club (Manhattan nightspot), 230–31
Lehman Brothers Kuhn Loeb, 44, 47, 48, 65, 209, 268–69, 311
Lenox, Inc., 256
leveraged buyouts (LBOs), 97–99, 161, 198–99, 219, 224, 226, 246, 247, 269, 278, 289, 314, 325, 350
cash flow and, 113
defined, 98–99
friendly vs. hostile, 167
interest rates and, 111, 137
management and, 98–99, 196
National Can deal and, 107, 108, 122–25, 137, 140, 148, 203
Phillips deal as, 166–67
private placements in, 129
refinancing of, 163
TWA and, 173, 181
of Uniroyal, 170
Levine, Dennis, 204, 208, 210, 220–221, 230, 312
illegal activities of, 254–55, 318
Levine, Sol, 234–35
Levy, Gustave, 30, 42, 152
Levy, Paul, 75, 331
Lewis, Salim (“Cy”), 33–34
Liberty Service Corporation, 182
Liman, Arthur, 194–96, 207–8, 216, 221–22, 225
Lindner, Carl, 12–13, 35–38, 57, 93, 119, 139, 165, 167–68, 205, 273, 290
career path of, 36
Milken’s respect for, 36
National Can deal and, 124, 131, 132, 133
at Predators’ Ball (1985), 14, 16, 17
SEC and, 35, 36, 37
Linton, Robert, 31, 59, 69, 243, 303, 336
Levine scandal and, 254
Lipper Analytical Services, 33, 247
Lipton, Martin, 101, 168–69, 197, 259, 318
Drexel business of, 206
Revlon battle and, 204–6, 210, 211, 221, 224–25
Siegel’s relationship with, 256
takeover raider business refused by, 205, 206
Litton Industries, 120
Lobon Associates, 81
Loeb Rhodes, 48
Loews Corporation, 35, 45
Lombard, Carole, 53
Long, Perrin, 247
Loomis, William, 209–10, 219, 222–224
Lord Abbott Bond Debenture, 33
Lorenzo, Frank, 173–78, 181, 187, 297
Lorimar, 15, 17, 60
Lorimar-Telepictures, 321
Los Angeles, Calif., Drexel Burnham Lambert branch opened in, 50–53
Lovado (Triangle financial officer), 136
LTV Corporation, 44, 268–69
Ludlum, Robert, 357–58
Lurie, Robert, 305
MacAndrews and Forbes, 132, 193, 196, 198, 199, 203, 208, 235, 305
debt-to-equity ratio of, 237
Pantry Pride stock purchased by, 203, 231