First Boston Replaces CEO in Wake of Campeau Filing

First Boston Corp. on Thursday replaced its chief executive, William E. Mayer, in a move seen as stemming from the investment banking firm’s exposure to losses in the bankruptcy filing of Campeau Corp.’s two main U.S. retailing units.

Mayer was replaced by John M. Hennessy, chief executive of First Boston’s holding company, CS First Boston.

Mayer, 49, was named to head a new merchant banking subsidiary to be called CS First Boston Merchant Bank, which reportedly will oversee certain First Boston investments, including those in the Campeau units, Federated Department Stores and Allied Stores.

First Boston emerged in court filings this week as the chief unsecured creditor of both Federated and Allied, which on Monday filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. The documents indicate that First Boston holds $526 million of the two firms’ unsecured obligations.

However, a First Boston spokesman said Wednesday that the filings substantially overstate its potential losses in the Campeau debacle. The spokesman, Jack Cowell, said the maximum loss First Boston could suffer comes to $293 million, including a $250 million “bridge” loan the firm made to help finance Campeau’s acquisition of Federated in 1988.