Buffett Chooses L.A. Attorney as Salomon Counsel
In his lightning drive to bolster scandal-shocked Salomon Bros., the firm’s new chairman, Warren E. Buffett, on Sunday named a respected Los Angeles attorney as Salomon’s general counsel.
Robert E. Denham, 45, managing partner of Munger, Tolles & Olson, will replace Donald M. Feuerstein, who was Salomon’s chief legal officer until Buffett asked for his resignation Friday.
“Bob was my first and only choice,” Buffett said in a statement.
The two men are hardly strangers. Buffett said they have been associated for 17 years, adding: “I know he stands for exactly the same things I do.”
“I think Buffett and Deryck Maughan are going to be effective in doing what has to be done,” said Denham, referring to Salomon’s new chief operating officer. “And Salomon is going to continue as one of the strongest firms on Wall Street.”
Denham said there had not yet been time to sort out any possible continuing relationship with Munger, Tolles, one of Los Angeles’ leading corporate firms. Nor has a successor been chosen as managing partner, he said.
At the firm, Denham practiced corporate and securities law. In his new job he will be responsible for the legal affairs of Salomon and its subsidiaries, including compliance with federal regulations.
A Salomon spokesman attached no significance to the change in title that attended the appointment. (Feuerstein’s title was chief legal officer.)
The announcement is part of Buffett’s swift campaign to install a new Salomon management team that can restore confidence in the firm and stem defections among its clients.
Feuerstein reportedly learned on April 28 that Salomon had broken the rules in the Treasury auctions at which it played so important a role. Salomon’s admitted misdeeds at those auctions, and its apparent delay in reporting them, have rocked the legendary Wall Street firm and led its top management to resign.
A week ago, Buffett said in a press conference that he had “no reason to question (Feuerstein’s) efforts or enthusiasm” to see that the firm contacted federal officials. But five days later Buffett asked him to quit.
In his 20-year career at Munger, Tolles, Denham’s long-term clients have included the Pacific Stock Exchange; Cook Inlet Region Inc., an Alaskan native corporation; and Berkshire Hathaway Inc., of which Buffett is the revered chairman.
Denham has worked closely with Buffett on major projects for Berkshire Hathaway since 1974 and for the past eight years represented Buffett’s company in every major deal it undertook.
These included the purchase of $300 million of preferred stock issued by Champion International Corp., and earlier this month, the purchase of a $300-million private stock issue from American Express Co.
Denham, who graduated from Harvard Law School in 1971, lives with his wife, Carolyn, in Pasadena. She is a professor of educational research and statistics who is associate vice president for academic programs at Cal Poly Pomona. They have two children.
