Record Crowd, but Not Milken, Will Carry On at ‘Predators Ball’ : Despite Host’s Troubles of Late, Drexel’s Big Confab Won’t Be ‘Any Different’
Michael Milken, the disgraced king of “junk bonds,” for the first time won’t be there. But Drexel Burnham Lambert nevertheless expects a record turnout this week for its annual “Predators Ball” at the Beverly Hilton Hotel.
“We’ve had to put a moratorium on new people coming” to the conference, which starts Wednesday, said Steven Anreder, a Drexel spokesman.
Drexel never liked the appellation “Predators Ball” for its high-yield bond conference. Author Connie Bruck used it for the title of her book about Drexel, referring to predators because the gathering included many of the people who put up huge sums to buy the junk bonds that financed hostile corporate raids.
Milken, who had presided over each of the previous 10 high-yield bond conferences, last week was indicted in New York on 98 counts that range from racketeering to mail fraud. He has since taken a leave of absence from the firm. Depending on the outcome of talks between Drexel and the Securities and Exchange Commission, he may soon be fired.
The firm, too, is under a cloud. It plans to plead guilty to six criminal counts. But despite the spate of bad news, no one expects black bunting to be draped around the meeting rooms of the Hilton.
“There are no plans to make this any different from prior conferences,” Anreder said. Indications so far are that attendance will be well over 3,000. This would be a record, he said.
Several investment bankers and others planning to attend offered several reasons for the turnout.
“Milken has made an indelible mark on the investment banking business,” said Fredric M. Roberts, a Los Angeles investment banker and former Southern California district chairman of the National Assn. of Securities Dealers. “I think maybe everyone is coming there to commiserate, to be a part of what may be a critical moment in the development of the investment banking business.”
In addition, he said, clients whose fortunes Drexel helped make want to show their solidarity. Roberts said: “There are a lot of clients who want to show loyalty as a way of expressing their gratitude for the performance over the years.”
More critically for Drexel, some investment bankers say, is that a portion of those present will also be there to assess whether they will continue using Drexel. They want to get a sense of the firm’s future after Milken.
Anreder, however, denied that the firm will be particularly on the spot this year. “The chief pressure that we have is to do a good job, which is the pressure we have every year,” he said.
The main purpose of the conference is for buyers of junk bonds to get to know the companies that have raised capital by issuing the securities or that are planning to do so. But panel discussions will cover many subjects and feature a wide range of speakers, including Jaime Escalante, the East Los Angeles school teacher who was portrayed in the film “Stand and Deliver.”
John H. Kissick, who has been named to replace Milken as head of Drexel’s junk bond department in Beverly Hills, will deliver the conference’s welcoming address Wednesday morning.
Not only will Milken be gone from the conference but certain excesses that reportedly occurred in previous years almost certainly will be absent as well. At certain earlier junk bond conferences, Drexel reportedly went to great lengths to assure the comfort of customers. The firm, however, categorically denies published reports that these comforts included prostitutes. “It’s untrue,” Anreder said. “We deny it completely.”
The firm seems likely to go to great lengths this year to avoid any hint of impropriety.
Roberts says the big attendance figures don’t necessarily prove that Drexel is emerging unscathed from its problems. “The attendance figures don’t prove anything,” he said. “What will prove it will be the next RJR/Nabisco (financing deal) they do.”
