They said it couldn’t be done. They said it didn’t matter if it was $4.5 million or $2.5 million or if they were giving it away. They said potentials buyers wouldn’t be swayed by the pitch to “sleep where Angelo Mozilo hath slept, after a few too many troughs of Boone’s farm” (AKA “The Mozilo Bedroom”), or to impress guests with the cocktail party fodder that “that chair you’re sitting in right now the very one Ken Lewis was sitting in when he decided to buy Merrill Lynch, can’t get better investing karma than that.” They said the vomit stains on the rug would not be a selling point. They were wrong. Read more »
If it feels like it’s been forever since we’ve heard from Ken Lewis it’s because it has. Following his retirement in 2009, the former Bank of America CEO went underground to do some soul-searching. To figure out what made Kenneth D. Lewis tick. Did he want to want to be a CEO of another company? Did he want to get involved in another industry entirely? Did he want to grow a beard again? Did he want to be a shepherd? These are the questions that needed answers and today, finally, we’ve got some. No word on the beard but it appears that for now, Lewis is staying away from Wall Street and pursuing another passion: the movie business. Read more »
Are You A Financial Services Company Stuffed To Gills With Toxic Assets And/Or On The Verge Of Bankruptcy? Don’t Hold Your Breath For Brian Moynihan’s CallBy Bess Levin
Time was, Bank of America loved buying companies. Bonus points if there was a not-so-subtle suggestion by the target’s CEO that BofA would one day be very sorry for doing so, or that they would’ve been better off picking up an asbestos manufacturer, or that they were looking at roughly $40 billion (and counting) in legal fees associated with fuck-ups that were to become Bank of America’s problem, or that they would have night terrors for the rest of their lives about signing those papers. As it’s been a while since BofA went shopping, some in the financial services industry have been wondering if we can expect any announcements re: big deals anytime soon or if Ken Lewis’s unsolicited suggestions (Groupon, Sino Forest, The Thirsty Beaver, and most recently: “a P&C insurer with outsized exposure to the Northeast”) are or have ever been under consideration. Read more »
Remember when Bank of America bought Countrywide in 2008 and CFC Chief Executive Officer/Oracle Angelo Mozilo said they wouldn’t be sorry and it wouldn’t be long before BofA would “reap what Countrywide hath sowed“? He wasn’t kidding and now, finally, BAC and Ken Lewis, the guy who had the foresight to do the deal, are having their vision and skills recognized. Read more »
There are two competing theories of how companies should be governed; one says that management should have a lot of leeway to do what it thinks is best and shareholders should keep quiet and, if they’re unhappy, maybe sell their shares; the other says that shareholders own the company and anything that stands in the way of their replacing inept or corrupt management is bad. The pro-shareholder side has I guess been having a good run lately, what with Chesapeake bowing to Carl Icahn’s demands to be less evil, and with the performance of the Facebook IPO giving evil governance a bad name, but the let’s-say-anti-shareholder position is pretty well entrenched. And the leading exponents, or at least my favorite exponents,* of that view are the law firm of Wachtell Lipton, which invented the poison pill so that managers wouldn’t have to lose their jobs just because someone else wanted to buy their company and their shareholders wanted to sell it.
So let’s say you’re a CEO, and you want to buy a company, and you negotiate to buy that company for stock so your shareholders have to approve the merger. And let’s say juuuuuust hypothetically that, after you agree on the deal and mail the proxies and set up the vote and are about to complete your grand plan, you find out that the company you’re buying is sort of a piece of shit, and that you didn’t know that when you agreed to buy it. Embarrassing for you. What do you do?
Well presumably you ask your lawyers and when those lawyers happen to be Wachtell Lipton they tell you their favorite thing to tell you, which is, “you have lots of options but FOR GOD’S SAKE LEAVE THE SHAREHOLDERS OUT OF IT.” And if you were Ken Lewis in late November / early December 2008, that’s what you did. You can read here his [new lawyers'] defense of his decision not to tell Bank of America shareholders that Merrill had some massive upcoming losses before they voted to approve the acquisition of Merrill; it basically goes like this: Read more »
Remember in 2008, when Ken Lewis was all, “Oooh, wait, I don’t know about this Merrill Lynch thing, it looks kinda bad, I don’t think I want to buy it anymore, I’m nervous [bites nails, shifts weight from one foot to the other like he has to pee]” and tried to back out of the deal? And Hank Paulson threatened to stuff him in a meat locker if he did so Lewis said okay, fine, I’ll buy it and then did, without mentioning anything to shareholders about Merrill’s impending losses? Well 1) People are still upset about it but 2) Ken was under the impression shareholders were on a need to know basis. Read more »
Bank Of America Investors Still Don’t Feel Properly Compensated For Having Merrill Lynch Rammed Down Their ThroatsBy Bess Levin
Remember in 2008, when Ken Lewis was all, “Oooh, wait, I don’t know about this Merrill Lynch thing, it looks kinda bad, I don’t think I want to buy it anymore, I’m nervous [bites nails, shifts weight from one foot to the other like he has to pee]” and tried to back out of the deal? And Hank Paulson threatened to stuff him in a meat locker if he did so Lewis said okay, fine, I’ll buy it and then did, for more than one might think is reasonable to pay for a ticking time bomb? BAC investors are still upset about that. Read more »
Protesters outside the Bank of America Bryant Park building, where the firm’s annual meeting is taking place today and where they are taking issue with the bank’s mortgage issues.
Heralding a “new era” at the nation’s largest bank, Mr. Moynihan kicked off the bank’s first investor day conference since 2007 promising the bank has no intention of making any more acquisitions and will instead look to cut costs and focus on its customers. “I can’t stress enough to you how much of a peace dividend we’ll get without mergers,” Mr. Moynihan said, adding the bank doesn’t need anything. “That peace dividend is effectively a permanent dividend.” [WSJ]
Which ‘Very Powerful, Highly Respected Banker’ Did Donald Trump Allegedly Have To Carry Out Of The Waldorf Because He Was So Hammered?By Bess Levin
“There’s a banker — and obviously I’m not going to mention names…I’ll never forget a very respected banker, highly respected. And he was making a speech at the Waldorf Astoria. And he was very tipsy, very — and shortly thereafter, he was just totally stone cold drunk. There were probably 2,000 people, 1,500 people at this dinner. It was a very big event. And we carried him out on his back. We carried him out literally on his back and — And I never felt the same way about him.
Trump went on to say he can’t even look at the guy anymore and that he’s “lost all respect” for him. Choking back tears**, Trump wouldn’t say who his fallen hero is or if he had to hold the guy’s hair back as he vomited on the street corner but he did offer one more clue. Read more »