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
discount trading of, 27, 289
downgrading of, 27
face (par) value of, 27, 93
high-coupon, high-premium, 71
junk, see junk bonds, junk-bond takeovers
Penn Central, 34, 112
People Express, 249, 287
prices of, interest rates and, 70
rating of, 27, 32
Riklis’ use of, 37–38
straight-debt, 27, 28
swapping of, 289
triple-A, 27, 32, 243
U.S. Treasury, see Treasury bonds, U.S.
with warrants, 69, 71, 73–74, 114–15, 120, 289
Boylan, Michael, 244–45
bracketing, 30
Bradford, Michael, 264–65
Bradley, Bill, 258
Brant, Peter, 190
Brazil, 197
Brenner, Howard, 331
“Bridge Club, the,” 250
bridge financing, 165, 248, 249–51, 345–46
see also commitment letters and fees
Bright Star, 305
Brown, David, 178, 180, 318
Brown-Forman Distillers Corporation, 256
Brownstein, Andrew, 211, 216, 217
Brumberger, Alan, 109, 132–33, 341
Buffett, Warren, 118
Buford, Anthony, Jr., 24–25
Bungalow 8 (Beverly Hills Hotel), 15, 17, 135, 141, 183, 340
Burnham, I. W., II (“Tubby”), 29–32, 42, 48, 57, 259, 302–3
Boesky Day and, 330–31
Milken and, 31–32, 34–35, 50, 51–52, 69
public company debate and, 69
Wynn and, 59
Burnham and Company, 29–31, 42, 43, 51
as Jewish firm, 31
burnout, 252–53
Burroughs, 258
Business Week, 66, 92, 120, 138–41, 145, 151, 186, 254, 268, 270, 290, 335
“buyback at a premium” (“bon voyage bonus”), 156
Icahn’s congressional testimony on, 162
see also greenmail
Caesars World, 308–12, 328, 352
Cahill, Gordon and Reindel, 205
Cambrent Financial Group, 54
Cameron, Dort, III, 83–84, 182, 278
Cannella, John, 172–73
Canterbury Group, 81
Capital Cities/ABC, 145
Carlyle Associates, 81
Carr, Fred, 89–90, 93, 119, 182, 270, 276, 280, 311–12, 322
market competition encouraged by, 287
National Can deal and, 124, 132, 134
Revlon battle and, 212
Carter Hawley Hale, 160
“cash cow” strategy, 262
cash flow, 171, 172, 199
defined, 112–13
Cashin, Richard, 289
Causey, Charles, 35, 83–84, 253
Caywood, James, 12, 55, 60, 277, 287
Caywood-Christian Capital Management, 12, 277
CBS, 217
Cell Products, 116–17
Central Jersey industries (CJI), 141, 144
Centronics Data Computer Corporation, 339
certificates of deposit, 91
Chanticleer Investors, Ltd., 81
Chapman, Alger (Duke), 41
Chapter 11 bankruptcy, 18, 111, 124, 139, 193, 292, 293
Charles of the Ritz, 234
Chasen’s (Beverly Hills), dinners at, 14–15, 183, 260, 341
Chemical Bank, 36–37, 210–11
Chicago Board Options Exchange, 152, 160, 300
Chinese paper, 27, 38, 44, 75, 120
Chinese Wall, 306–8
Churchill, Winston, 258
Cinerama, 199–200
Circus Circus, 60
Citibank, 210, 277, 289
Citicorp, 136, 289
Clarendon, 281–84
Clark, Douglas, 26
Clark Gable Estates, 53–54
Clayton & Dubilier, 99, 142
Clore, Alan, 159, 196
CNA (insurance company), 35, 83
Coastal Corporation, 13–14, 107, 127, 130, 131, 203–4, 208
Cochran, Susan, 359
Coffee-Mat, 110–12
Cogen, Marshall, 79
Cogut, Craig, 54
Cohen, Claudia, 198, 218, 236
Cohen, Laurie, 348
Cohen-Hatfield Industries, 198, 238
Cohn, Roy, 201
Coleman, Bertram, 25
Collins and Aikman Corporation, 295
Columbia Pictures, 111
Columbia Savings and Loan, 89, 91–94, 132, 167, 182, 272, 291, 311
in Milken’s money machine, 276–277
political contributions of, 259, 260
Comdisco, 347
commissions and fees, 286
fixed, end of, 63
for underwriting, 46, 47, 66, 74, 300, 304
commitment letters and fees, 107, 129, 134, 165–66, 181
commodity-related bonds, 71–72
Compact Video, 305
Compagnie Bruxelles Lambert, 48–49, 62
competition, 291, 296
junk bonds and, 47–48, 71, 209, 248–51, 287
Milken’s views on, 249, 358
takeovers’ effects on, 262, 263
Conan, Joan, 278
Concordia, 333
Congress, U.S., 34, 91, 162, 166, 167, 172, 203–7, 259–63
Law’s testimony to, 262–63
Lipton’s testimony for, 204–5
Rohatyn’s testimony for, 206–7
Scherer’s testimony to, 261–62, 263
see also House of Representatives, U.S.; Senate, U.S.
Conoco, 134
consent decrees, 37, 120, 160, 279, 321
Considine, Frank, 105, 122–26, 135–136, 138, 140, 145, 147–48
owner-managers as viewed by, 263
Consolidated Cigar, 198
Continental, 173, 175
convertible debt, 28, 38, 152, 269
defined, 27
hybrid (“Western”), 69
corporate America:
Milken’s transformation of, 14, 19
Milken’s views on, 12
Corporate Bond Quality and Investor Experience (Hickman), 11
corporations:
below-investment-grade, 11, 45
investment-grade, defined, 27
mergers of, see junk bonds, junk-bond takeovers; takeovers
rating of, 10–11, 27, 45
cosmetics business, 234–35
Coss, Lawrence, 290–92
coupons, on bonds, 73, 82
CPC International, 233
Crane, 97
Cranston, Alan, 258
credit cycle, Grant’s theory of, 268
Crown Zellerbach Corporation, 17, 208
Cuozzi, Howard, 279
Dahl, James, 116–17, 291, 311, 325, 334, 336–37
D’Amato, Alfonse M., 171, 259–60
Dan River, 161
Davis, Martin, 200, 294–95
Davis, Marvin, 145
Daylin Company, 39, 292, 326
DBL Americas Development Association, 353
Dean, James, 271
Dean Witter, 65
debt:
convertible, see convertible debt
in fall of 1986, 269
Grant’s views on, 266–68
preferred stock compared with, 265
refinancing of, 108–9, 250, 269, 290
senior, 45–46, 98, 123–24, 166
straight, 27, 28
subordinated, 45–46, 59, 123, 166, 246
tax law and, 263–64
Third World, 254–55, 353
debt-to-equity ratios, 262, 269, 310
“deep-discount” bonds (fallen angels), 27, 38, 44, 119, 346
de la Madrid Hurtado, Miguel, 353
De Laurentiis, Dino, 54
Delaware Chancery Court, 199, 225–27, 232
Delaware State Supreme Court, 218, 227
depreciation, 113, 172
deregulation, 91, 97, 171
Diamond Shamrock, 322
Dillon, Read and Company, 30
discount-bond mutual funds, 33
Walt Disney, 13, 107, 164, 167, 291
diversification, 46, 199, 251–53
divestitures:
Law’s views on, 263
Revlon and, 210, 211, 231
Dole, Robert, 258–59
Dominick and Dominick, 43
Donaldson, Lufkin and Jenrette (DLJ), Inc., 164, 169, 251, 253, 334
Dorchester Government Securities, 82, 300, 312
Dorfman, Dan, 257
Dove, Guy, III, 132, 279–80, 282, 284, 327
Drapkin, Donald, 135, 136
Revlon battle and, 194, 196, 199, 208, 215, 218, 220, 222, 225–26, 234, 237–39
salary of, 237–38
Drexel, Francis, 26
Drexel, Morgan and Company, 26
Drexel and Company, 26
Drexel Burnham, 30–40, 42–48
bonus pool at, 43–44
cultural clash at, 42
finance department changes at, 43–44
“high-value-added” course of, 46
medium-sized company growth and, 42–43
Milken’s firm within the firm at, 32–33
self-image problem of, 42
“Shearson Mafia” at, 43
Drexel Burnham Lambert:
annual report of (1985), 255
Beverly Hills headquarters of, 80
Beverly Hills Savings suit against, 116–17
bonuses paid by, 247–48
California branch opened by, 50–53
charter of, 206
Chinese wall of, 306–8
client concerns and, 65, 67, 163, 177
commitment letters used by, 107, 165–66, 182
corporate finance group of, 48–49, 63–69, 88, 98, 247, 250, 298, 302, 307
corporate finance investment
partnership in, 68, 299–300
creativity of, 135
default on “highly confident” letter of, 182
ebbing power of, 333–43
“equitize” slogan at, 269
equity of, 66–67, 69–70, 246, 288–289, 306, 314
in financial scandals, 254–55
formation of, 48
franchise arrangement of, 10–11
globalization of, 243–44, 251–52
Gobhai as consultant for, 62–66, 100–101, 163, 176, 245, 296, 299, 344
as god, 244–48
Green Tree lawsuit against, 291, 292
growth of, 80, 246–47
“highly confident” letter of, 101, 106–7, 166, 167, 182, 221, 250, 251, 290, 304, 344
high-yield mutual fund of, see HITS
imitators of, 248, 275
internecine rivalries in, 88, 299–301, 340–41
“Joseph doctrine” of, 170, 171
LBO group of, 100, 163
market share of, 248
medium-size companies and, 13, 49, 347–50, 357, 358
merchant banking of, 66, 248, 249–50
Milken’s title at, 84
1983 junk offerings of, 78–80
Political Action Committee of, 259
political influence of, 258–60, 264–65
principal-mindedness of, 59, 66, 67
profits of, 19, 51, 64, 80, 98, 231, 247–48
public company debate and, 69
public-relations compaign of (1987), 348–50
side deals of, 74
Special
Planning Committee of, 74
stability of, 269–70
stock of, 69–70, 206, 247, 253
Third World debt project of, 254–255
3 (a) 9 deals of, 76–77, 135, 209, 331
Underwriting Assistance Committee (UAC) of, 72, 131, 235, 304–7, 351
underwriting default rate of, 77
“war chests” of, 19, 117, 163, 164, 169, 180, 185, 202
as well-rounded firm, 251–52, 253
whatever-it-takes-to-win credo of, 341
World Trade Center headquarters of, 252, 333
yin/yang of Milken operation in, 57
Drexel Firestone, 23–24, 27–31, 43, 51, 271
Drexel Harriman Ripley, 24–27
decline of, 26–27
lineage of, 26
securities-delivery system of, 25–26
Drexel High Yield Bond Conference (1979), 11–12
Drexel High Yield Bond Conference (1983), 95
Drexel High Yield Bond Conference (1984), 206
Drexel High Yield Bond Conference (1985), see Predators’ Ball (1985)
Drexel High Yield Bond Conference (1986), 182–83, 257–59, 291, 302
Drexel High Yield Bond Conference (1987), 328
Dreyfus and Company, 151, 156
Dunmore Partners Ltd., 81
Duval, Albert, 156–58
DWG, 122–23, 124, 139
Eagleton, Thomas F., 171
Eckel, Lee, 259
Economic Recovery Tax Act (1981), 97
Economist, 270–71
Edersheim, Maurits, 87
EGM Partners, 300
EJ Associates, 81
Encino, Calif., 53–54, 80
encounter groups (T-groups), 62
Engel, Donald, 15, 18, 116, 117, 123, 125, 135, 183
forced resignation of, 15, 337–39, 340–42
in Japan, 243
Joseph’s reinstatement of, 338–42
Posner and, 121, 123, 338, 340
Prime Capital Associates and, 231–32
Revlon battle and, 208, 218, 220, 230, 231–32
Englewood Partners, 328
Enterprise Fund, 89
entertainment, 16, 60, 230
equity, 45, 66–67, 69–70, 156, 325
in Beatrice buyout, 250
of Drexel, 66–67, 69–70, 246, 288–289, 306, 314
Icahn’s views on, 163
in leveraged buyouts, 99, 107, 108
in National Can deal, 107, 108
Perelman’s views on, 236
in Phillips deal, 167
preferred stock as, 265
of Revlon, 216, 221, 225
risk and, 131
tax law and, 263
equity buyers, bond buyers vs., 73
ESB, 96
Evans Products, 124, 125, 128, 139
exchange offers, 66, 309–10, 312, 346
carrot-and-stick vs. buy-back, 76
registered, 75
in Revlon battle, 216–17, 224–25, 226, 228
unregistered, 75–77, 124
Executive Life, 167, 280
Exxon, 272
fallen angels (“deep-discount bonds”), 27, 38, 44, 119, 346
Farley, William, 14, 109, 135, 163, 201