-------- Original Message -------- Subject: Re: [Marxism] corporate takeover artist Wilbur Ross killed the 12miners Date: Wed, 04 Jan 2006 13:03:17 -0500 From: Jon Flanders <jonflanders at jflan.net> To: Activists and scholars in Marxist tradition <marxism at lists.econ.utah.edu>
from a long 2003 Business Week article on Ross. He is a "bottom feeder", but notably also a big contributor to the Democratic Party and someone who has been close to the Steelworkers Union, basically negotiating a sweetheart deal with them to "save" LTV steel. His relationship with the UMWA has not been friendly, they have bitterly protested the bankruptcy regulations that have allowed him to set up the International Coal Group free of unions, health care and pensions.
Jon Flanders
full:http://www.businessweek.com/magazine/content/03_51/b3863001_mz001.htm
<<The world Ross walks in is politely called distressed investing. Less politely, it's vulture investing. It's a corner of the finance world dominated by big personalities who rise to prominence in times like these, the bust after a boom. Many of the bigger players, like TCW Group or Oaktree Capital Management LLC, look to buy up out-of-favor bonds cheap and flip them fast for a profit, often after some of the assets have been broken off for sale piecemeal. Others, like Leon Black's Apollo Advisors, take long-term equity stakes.
Ross doesn't completely fit either profile. He runs two hedge funds in addition to the private equity funds that have financed his bets on ISG, Burlington, and others. And he usually comes into a company as a bondholder but often surrenders some of his debt for equity, a riskier bet with more potential payoff. Other times, he buys assets straight out of bankruptcy court. He generally stays in at least a year and a half, sometimes longer. But Ross is looking for a relatively quick turnaround, a situation in which a new management or a new strategy or a cheaper way of doing business can lead to improved returns and a fast exit, often by selling to a larger, healthier rival. His fund agreements with investors cover a seven-year period: four to invest, three to liquidate investments.
And like the other denizens of this world, ultimately he makes money from others' misfortune -- or, as Ross would say, mistakes. "What we do is a very countercultural activity," acknowledges Ross, who in addition to buying distressed assets takes short positions in companies he thinks are headed for bankruptcy, profiting as their stocks decline. "Confrontational things, admission of error, admission of defeat, restructuring, laying people off: Those are not American ideals," he says.
Yet Ross sees a certain heroism in his role. He takes satisfaction, he says, from having saved jobs in steel, for example, that otherwise would have been lost completely. Even when he was a bankruptcy adviser, he says he mostly worked for creditors, who were in his view the victims, rather than management, whom he saw as the villains. He has described himself as a "guy who likes running into burning buildings."
He doesn't look it. A short man in wire-rimmed glasses, Ross has both the demeanor and the speaking style of an Ivy League professor. He asks short questions but gives long answers, and there's something vaguely patrician about the cadence of his speech. He spends his downtime at his century-old mansion in Southampton, N.Y., and his friends include theater owner Robert E. Nederlander and Massachusetts Senator John F. Kerry. Lately, he has been photographed at fund-raisers with New York socialite Hilary Geary, whom he's dating.
IN CONTROL Twice divorced, Ross's second marriage was to Betsy McCaughey when she was lieutenant governor of New York in the mid-1990s. McCaughey, who came to the job as a policy expert and not as a politician, famously switched parties to run against her former boss, Governor George E. Pataki, a Republican. News of Ross's and McCaughey's engagement, marriage, and split made the papers on a regular basis. The divorce forced him to sell a collection of American Pre-Raphaelite paintings he had spent 15 years amassing, a bitter pill that many might have had trouble swallowing. Not Ross. He seems neither nostalgic nor angry. Instead, he has moved happily on to contemporary photography.
Indeed, despite the immense risks he juggles every day, friends and colleagues describe Ross as unfailingly cheerful. "I've never seen him angry," says Nederlander, a friend, sometime business associate, and frequent tennis opponent for 20 years. "He always has control over himself.">>