1985 Was a Mixed Bag for Elite of U.S. Business : Some Fresh Faces Join the More Familiar Ones in the Publicity Spotlight
It was another year of trials and tribulations for the nation’s business elite. But there was some good with the bad.
Many of 1985’s news makers were old hands, like Steven P. Jobs, Lee A. Iacocca and Ted Turner. New to the celebrity scene were Robert Fomon, Thomas Murphy and Ivan F. Boesky.
The biggest feat of the year was Joseph Jamail’s. The 60-year-old Houston lawyer persuaded a Texas jury to award $10.53 billion in damages to Pennzoil from Texaco for enticing Getty Oil to break a merger agreement with Pennzoil.
Another notable accomplishment was Sam Walton’s. The 67-year-old founder of Wal-Mart Stores became the richest man in America, with a net worth of $2.8 billion, according to Forbes magazine.
Donald Kelly, 63, made a big comeback as a participant in the proposed $6.2-billion leveraged buy-out of Beatrice. He was deposed as chairman of Esmark after Beatrice bought Esmark in 1984. Beatrice Chairman James Dutt, 60, was ousted during the summer before Beatrice agreed to be bought out by an investment group led by the investment firm Kohlberg Kravis Roberts & Co.
First Network Takeover
Thomas Murphy, 60, chairman of Capital Cities Communications, made the news by pulling off a $3.5-billion friendly merger with the larger American Broadcasting Cos. in what was the first takeover of a network.
Late in the year, John Welch, 50-year-old chairman of General Electric, enjoyed his coup: an agreement for a $6.28-billion takeover of RCA, which owns the NBC network.
In a months-long and messy battle, Pantry Pride Chairman Ronald Perelman, 42, won Revlon, whose own chairman, Michel Bergerac, 53, came away with millions of dollars in severance payments.
Financier Carl C. Icahn, frequently in the news for his takeover fights, was at year’s end still putting together the $1 billion that he needed to complete his takeover of Trans World Airlines. Icahn, 49, beat out Texas Air President Francisco (Frank) Lorenzo, 45, for control of TWA.
Atlanta broadcaster Ted Turner, 47, after making an unsuccessful $5.41-billion, no-cash bid for CBS Inc., reached a friendly agreement to take over MGM UA Entertainment for $1.5 billion. But he also has not wrapped up that deal.
In the works, too, is 54-year-old publisher Rupert Murdoch’s plan to create a fourth television network. He agreed to buy six major market TV stations from Metromedia for $1.55 billion and he purchased the half of 20th Century Fox Film Corp. that he did not already own. Murdoch also became an American citizen
These men moved up the ladder in 1985:
- Edward Hennessy, 57, became chairman of Allied-Signal, which was formed through the about $5-billion merger of Allied Corp. and Signals Cos. He had been chairman of Allied.
- Allen Murray, 56-year-old president and chief operating officer of Mobil, was also named chairman and chief executive of the nation’s second-largest oil company, effective Feb. 1. He assumes the posts from retiring Rawleigh Warner Jr., 64.
- Donald Petersen, 59, as chairman, and Harold Poling, 60, as president, took the reins at Ford Motor, the No. 2 auto maker.
Going in new directions:
- The Rockefeller family, seeking to make liquid some of its holdings, raised more than $1 billion in cash from the public, using the famous Rockefeller Center as collateral.
- Laurence Tisch, the 62-year-old chairman of Loews Corp., who has kept a low profile in the past, stepped into the limelight by saying he intended to more than double his stake in CBS Inc. to 25%.
He also was named to the network’s board of directors.
- Robert Haas, 44, took Levi Strauss & Co., the blue jeans company, private in a deal worth about $2 billion.
- David A. Stockman, 39, stepped down as budget director and accepted a job as a managing director at the investment firm Salomon Bros. He also signed a lucrative book contract.
- Ivan F. Boesky, 48, one of Wall Street’s best known arbitrageurs, came out with a book his capitalizing in the stock market on the boom in corporate takeovers. It’s called “Merger Mania.”
Murchison Bankruptcy
Going in the wrong direction was the net worth of the Hunt brothers of Texas. The Hunts put the combined value of their trusts and personal holdings at about $2.6 billion, versus the $5 billion to $6 billion claimed in 1980, the Wall Street Journal reported.
Physically ailing Texas oilman Clint Murchison Jr., in his early 60s, filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, saying his debts totaled $400 million.
Several executives had brushes with the law.
An Ohio grand jury indicted Cincinnati financier Marvin L. Warner, two former officials of the failed Home State Savings Bank and two former executives of ESM Government Securities of Fort Lauderdale, Fla., on charges of financial wrongdoing.
Paul Thayer, 66, former chairman of LTV Corp. and deputy U.S. secretary of defense, was sentenced to four years in prison for obstructing justice during a Securities and Exchange Commission investigation.
Terence Fox, 47-year-old chairman and chief executive of Iroquois Brands Ltd., was arrested at a hotel in Hartford, Conn., and charged with possession of cocaine and drug paraphernalia. He pleaded innocent and continues to report for work.
R. Foster Winans, a 37-year-old former reporter for the Wall Street Journal, was convicted for his part in a scheme to profit on his advance knowledge of Journal stories likely to affect stock prices. He was sentenced to 18 months in prison but was free pending appeal.
Also having troubles was William Millard, 53. The founder of ComputerLand Corp., the nation’s largest computer retail chain, lost a lawsuit brought by investors who claimed a 20% stake in the company. At year’s end, Millard and his 27-year-old daughter, Barbara, president of ComputerLand, reached an agreement with the investors that will, among other things, take the company public while they appeal the case.
Under pressure was Robert Fomon, 60, chairman of E. F. Hutton & Co., who acknowledged that he met with then-Attorney General William French Smith to seek help with a 1984 grand jury investigation of his firm but said the effort was unsuccessful and he regreted making it.
Hutton drew widespread coverage after pleading guilty to 2,000 counts of mail and wire fraud in a scheme to overdraw checking accounts.
Also under the gun was Roberto Goizueta, 54, chairman and chief executive of Coca-Cola Co., who was ultimately responsible for the decision to reformulate Coke. The resulting furor persuaded the company to bring back the original formula as Coca-Cola Classic, which is outselling New Coke.
Goodbyes at Apple Computer
There were several goodbyes in 1985:
- The founders of Apple Computer, who are in their early 30s, resigned separately. Steven Wozniak resigned in February to launch a new venture. Steven P. Jobs resigned in September after loosing a board room battle with President John Sculley, 46. Jobs also said he would start a new business.
- Harry Gray, 66, stepped aside as chief executive of United Technologies Corp. but continues as chairman.
- Sanford Weill, 52, resigned from the No. 2 spot at American Express. He is expected to go into business for himself.
Nicholas Deak, 80, chairman of Deak-Perera U.S.A., a foreign exchange company, was shot and killed in his New York office by a homeless woman.
John Z. DeLorean, 60, lost a New Jersey court battle with his ex-wife, Cristina Ferrare Thomopoulos, over custody of their two children, but the judge upheld a disputed pre-nuptial agreement that will allow the former auto maker to keep an estimated $10 million in assets that he took into the marriage.
John Fedders, 44, the SEC’s enforcement chief, resigned after it became publicly known that he periodically beat his wife during 18 years of marriage.
Chrysler Chairman Lee A. Iacocca, 61, whose autobiography remains a best seller, spent the year engaged to marry Peggy Johnson, 34, a New York advertising executive. But they haven’t set a date.
