Exec Who Helped Save Salomon Rejoins L.A. Firm
Robert E. Denham, the lawyer tapped by billionaire investor Warren E. Buffett to help right Salomon Bros. after a devastating 1991 scandal, has returned to the Los Angeles law firm of Munger, Tolles & Olson.
After a year as Salomon’s chief counsel, Denham succeeded Buffett in 1992 as chairman and chief executive, a job he held until Salomon’s $9-billion acquisition last year by Travelers Group Inc.--a transaction Denham helped to engineer. Travelers merged the investment-banking firm into its existing brokerage to create Salomon Smith Barney.
Denham, 52, who had been managing partner--equivalent to chief executive--of Munger, Tolles before his stint at Salomon, said that his practice as a partner will focus on merger-and-acquisition advice, corporate governance issues and crisis management.
Salomon gave the West Texas native plenty of experience in the latter category.
When Buffett, Salomon’s largest shareholder, called on Denham in August 1991, the firm was reeling from allegations that its traders had rigged the auction market in certain U.S. Treasury securities.
With the exploding scandal threatening Salomon’s survival, Buffett, Denham and the rest of the firm’s new management team undertook a rescue operation that is cited in business schools as a model of crisis intervention.
Decisively and, most of all, quickly, Salomon swept out the miscreants, apologized to customers and Congress, slashed executive bonuses and instituted rigorous new controls to prevent a recurrence.
“When a good company hits a rock, the task of getting it off the rock is critical,” Denham said in an interview Tuesday. “Jobs and lives and shareholders’ wealth are tied up in succeeding. It’s a high-energy, high-pressure job where time has value.”
In Salomon’s case, “getting the job done in nine months instead of a year and a half probably made the difference between the company living and dying,” he added.
“Lawyers sell judgment,” Munger, Tolles partner Ronald L. Olson said in a statement Tuesday, adding, “Few corporate lawyers do it better than Bob Denham.”
Denham will continue to serve as Buffett’s principal lawyer, a role he played previously at Munger, Tolles. He joined the firm in 1971, fresh out of Harvard Law School, recruited by one of his law professors, Roderick Hills.
Hills and his wife, former U.S. trade representative Carla Anderson Hills, and Charles T. Munger, Buffett’s business partner and longtime friend, were among the seven lawyers who founded the firm in 1962. Munger is no longer a partner at the firm that bears his name, but he maintains his office there.
For the moment, Denham is working from New York, but by July 15 he will be settled at Munger, Tolles’ headquarters at 355 S. Grand Ave. His home will be in Pasadena, where his wife Carolyn recently was named president of Pacific Oaks College & Children’s School.
