The Predators’ Ball (57 page)

Milken almost surely believes, as some close to him have indicated, that he is paying the price not so much—or not at all—for having violated the law, but for having led the revolt of an underclass to scale the walls of corporate America and depose the rich, credentialed and powerful. This he did indeed do, and for this I (while not endorsing his selection of players to replace the captains and the kings) applaud him. Although I suspected when I set out to write this book that this stunning success story might well have some unholy if not illegal underpinnings, my sympathies were more toward Milken and his band of renegades than toward the corporate establishment they were attacking. To the extent that Milken, particularly, feels he is judged harshly here, he should know that these are judgments that were neither predetermined nor fueled by prejudice but that simply became—after more than two years of reporting—unavoidable.

Realizing the irony involved, I would nonetheless like to thank the many people at Drexel who spent countless hours explaining to me the workings of their world. The firm is of course filled with honest, very bright, hard-working people. I hope they will enjoy at least those parts of the book that describe the glory days of Drexel.

Drexel has been a much-covered story over the past couple of years, and articles by other reporters helped me in writing this book. Among them were pieces by James Stewart and Daniel Hertzberg in
The Wall Street Journal,
Chris Welles and Tony Bianco in
Business Week,
Allan Sloan and Howard Rudnitsky in
Forbes,
James Sterngold in
The New York Times,
and Cary Reich in
Institutional Investor.

One researcher, Natalie Byfield, assisted me in the early days of this project, and she was followed by Todd Woody, who assisted me over the longer haul; I am grateful to both of them. My fact-checker, Karen Dillon, was superb, with a spirit and determination that kept going when mine started to flag. Her services were lent to me by
The American Lawyer,
whose editor and publisher, Steven Brill, has provided me with unstinting and vital support from the first moment of this undertaking to its last. His 1985 piece in
The American Lawyer
about Icahn's raid on Phillips Petroleum, entitled “The Roaring Eighties,” provided the initial inspiration for this book. I owe him a considerable debt of gratitude.

I want to thank my editor at Simon and Schuster, Alice May-hew, whose legendary abilities I can now attest are real; I am fortunate indeed to have had the benefit of them. I also want to express
my gratitude to her assistant, David Shipley, and to Elizabeth McNamara, associate counsel at Simon and Schuster, whose sound judgment was a great asset in the closing days of this book.

Finally, I want to thank my friend Deirdre Fanning, who provided a tireless and excellent sounding board; my mother and father, both of whom have never doubted for a moment that I could do anything, and always have tried to make it possible for me to do everything; my brother, David, for his continual generosity; and my son, who, through years of enduring either uncooked or burned dinners, fits of temper and general abstractedness, has displayed the patience, cheer and relentless humor that have made my life bright.

C
ONNIE
B
RUCK

February 1988

Abecassis, Paul,
202
,
218
,
223
,
235
–236

AB Electrolux,
155

ACF,
19
,
161
,
163
–64,
169
,
173
,
185
,
186
,
190
–91

ACI (American Communications Industries),
73
–74,
76
,
306

Ackerman, Peter,
83
–84,
108
,
288
,
306

Adams, Joseph,
179

Adler and Shaykin,
219
,
221
,
234
,
235

Air Fund,
101
–2,
106
,
131
,
168
,
344

see also
“highly confident” letter

airline business, problems of,
171
,
172

Albright, Archibald,
31

Alexander, Norman,
285
–86

Allen, Herbert,
111

Allen and Company,
65
,
111
,
249

Alliance for Capital Access,
259

Altman, Edward,
268

American Can Company,
18
,
135
,
141
,
142
,
147
,
161

American Communications Industries (ACI),
73
–74,
76
,
306

American Financial Corporation,
35
,
36
,
38
,
83
,
93
,
290

National Can Deal and,
124
,
131
,
132

American General Capital Management,
55
–56,
277

American Home Products,
219

American Metal Climax,
272

American National Can,
147

American Natural Resources Company (ANR),
13
,
107
,
131
,
204

Amir, Paul,
115
,
116

Anaconda Copper Company,
97

Anchor Hocking,
161

Andersen, G. Christian,
46
,
245
–46,
249
,
264

IBG and,
338
–40

animal metaphors and imagery,
64

annuities, single-premium deferred (SPDA),
90

ANR (American Natural Resources Company),
13
,
107
,
131
,
203
–4

anti-Semitism,
29
,
36
,
205
,
331

anti-takeover legislation and maneuvers,
160
,
171
,
177
,
259
,
260
–65

poison pill,
168
,
216
,
217
,
224
,
226
,
256

arbitrage, arbitrageurs,
35
,
75
,
207
,
215
,
281
,
305
–6,
317
,
320
,
321

proxy fights compared with,
155

risk vs. classic,
152
,
162

Ashland Oil,
257

Atalanta/Sosnoff Capital Corporation,
131
–32

Atkinson, R.,
28

Atlantic Capital,
132
,
168
,
280
–84,
327

Atlantic City, N.J.,
58
–59

Atlantic Richfield,
94
,
134
,
272

Attorney's Office, U.S.,
330

Avedon, Richard,
238
–39

Avery,
141
–44

Aylward, David,
259

Baird and Warner,
154

balance sheets:

“flexible,”
75

leveraging of,
99
–100

Baldwin, Robert,
30

Balser, Donald,
320
,
342

Bankers Trust,
114
,
118
,
210

banking, banks,
36
–37,
269
,
282

in Drexel deals,
246

Drexel's displacement of,
246

investment,
see
investment banking, investment bankers

merchant,
66
,
191
,
248
,
249
–50,
288
–89,
308
,
321
;
see also
bridge financing

mergers and acquisitions and,
97
,
210
–11

Revlon battle and,
210
–11

bankruptcies,
33
–34,
64
,
74
,
112
,
128
,
182
,
287

Chapter
11
,
18
,
111
,
124
,
139
,
193
,
292
,
293

of LTV Corporation,
268
–69

Banner Industries,
144
,
305

Banque Commerciale Privée,
159
,
160

Barron's
,
245

Bass family,
278

Bass Investment Limited Partnership,
278

Batus, Inc.,
160

Bayswater,
154
–55,
160

Bear, Stearns,
81
,
128
,
198
,
199
,
346

Beatrice Companies,
143
,
245
,
250
,
258
,
273
–74,
347

Beck, Jeffrey,
253

Beecham Group,
232

Belvedere Securities,
81
–83,
279
,
300
,
311
,
312

Belzberg, Hyman,
12
–14,
16
,
35
,
93
,
120
,
125
,
168
,
257

Belzberg, Sam,
12
–14,
16
,
35
,
93
,
125
,
168
,
257

Reliance L.P. and,
120

Revlon battle and,
212

Belzberg, William,
12
–14,
16
,
35
,
93
,
120
,
125
,
168
,
257

Bergerac, Michel,
193
–97,
203
,
207
,
213
,
219
–22,
224
,
227
–30,
239

defense moves of,
210
,
211
,
216

financial settlement of,
232

gloomy predictions of,
235

Levine and,
235

lifestyle of,
228
,
237
,
239
–40

Perelman celebration and,
230
–31

on Perelman's social climbing,
237

personality of,
194

Berkshire Hathaway,
118
,
347

Bernheim Forests,
30

Berra, Yogi,
296

Beverly Hills Hotel Corporation,
319

Beverly Hills Savings,
115
–17

Bilger, Arthur,
245
,
298
–99,
304
,
331

Black, Eli,
65
,
287

Black, Leon,
100
,
143
,
176
,
287
,
295

background of,
65

bonus of,
247

fee paragraph in memos of,
304

Icahn and,
162
–63,
165
–66,
167
,
171
,
173
–74,
178
,
179
–80,
186
,
245

on “Joseph doctrine,”
170

Milken praised by,
245

Milken's relationship with,
319
–320

National Can deal and,
106
,
108
,
124
–27,
129

on robber barons,
65
,
149
,
245

TWA deal and,
171
,
173
–74,
176
–180

blind pools,
18
,
117
,
132
,
141
,
180
,
212
,
213
,
277
,
282
,
295
,
305
,
352

Bluhdom, Charles,
67
,
110

Blumenthal, Michael,
211

Blyth Eastman Dillon and Company,
47

Boesky, Ivan,
10
,
35
,
118
,
164
,
190
,
305
–6

at Predators' Ball (1985),
14
,
16
–17

Reliance L.P. and,
120

SEC investigations of,
305
–6,
312
,
318

Boesky Day,
317
–37,
342
,
351

Joseph and,
329
,
335
–37

SEC and,
318
,
320
–30

smoking gun and,
342
–43

bond funds, high-yield,
see
high-yield bond funds

bonds:

bankruptcies and,
33
–34

Chinese paper,
27
,
38
,
44
,
75
,
120

commodity-related,
71
–72

convertible-debt,
27
,
28
,
38
,
69
,
152
,
269

coupon on,
73
,
82

deductibility of interest on,
37

“deep-discount” (fallen angels),
27
,
38
,
44
,
119
,
346