Manufacturers Hanover

Strategic Concepts & Mechanics

Strategic PatternProcess of Bites, Not Grand Plans

Decision FrameworkCash Flow Over Earnings as Debt Survival Test

Relationship LeverageHighly Confident as Substitute for Actual Capital

Capital StrategyInterest Deductibility as Leveraged Assault Fuel

Competitive AdvantageNOL as Bidding War Nuclear Option

Signature MoveSpeed-of-Sale as Debt Survival Doctrine

Signature MoveLawyer as Deal Principal, Not Hired Gun

Signature MoveParis Apartment Discipline

Signature MoveAll Debt Disguised as Equity

Cornerstone MoveBuy the Whole, Sell Everything But the Crown Jewel

Cornerstone MoveBlind Pool Before the Target Exists

Cornerstone MoveBribe the Gatekeeper, Storm the Castle

Cornerstone MoveBankruptcy's Tax Corpse as Acquisition Weapon

Competitive AdvantageTax Arbitrage as Structural Weapon

Operating PrincipleProfessional Manager Decay Across Generations

Risk DoctrineNever Cut Back a Committed Deal

Signature MoveMilken: Four-Thirty AM Cathedral-Builder With No Office

Capital StrategyVenture Capital Masquerading as Debt

Signature MovePeltz: Spittle-on-the-Check Persistence from Near-Broke

Signature MovePerelman: Borrowed $1.9M to a Boeing 727 in Seven Years

Cornerstone MoveManufactured Credibility from Thin Air

Decision FrameworkContra-Thinking as Default Mental Operating System

Identity & CultureForced Savings as Loyalty Handcuffs

Cornerstone MoveCash Flow Over Earnings as the Only Truth

Cornerstone MoveBuy the Core, Sell the Pieces, Erase the Debt

Signature MoveKingsley: Mount Everest Desk, Twenty-Year Sounding Board

Signature MoveIcahn: Wrestling-a-Ghost Negotiation Until the Last Penny

Cornerstone MoveOwner's Equity as the Non-Negotiable Discipline

Strategic PatternProfitable Service Over Growth for Growth

Operating PrincipleIncorporating Problem Causers Into Solutions

Capital StrategyMoral Obligation Bond Innovation

Strategic PatternBear Hug Takeover Strategy

Signature MoveRelationship Banking Over Transaction Focus

Signature MoveGovernment Partnership During Business Crisis

Signature MoveTheater in High-Stakes Negotiations

Decision FrameworkSquare Pegs Into Round Holes

Signature MoveCrisis Action Before Complete Data

Primary Evidence

"In April 1983, Peltz and May (in a two-thirds/ one-third partnership) purchased Goldberg’s block, 29 percent of Triangle’s shares, for about $ 14 million. Two million was lent to Trafalgar; twelve million was lent to Peltz and May, from Manufacturers Hanover and Bankers Trust. Bankers Trust took the stock as collateral; Manufacturers Hanover took Peltz’s and May’s signatures and a lien on Peltz’s house in Quogue. Peltz recalled that it took all his powers of persuasion at the bank, and that when he finally walked out of Bill Rykman’s office at Manufacturers Hanover with the certified check in hand and met Goldberg, Goldberg told him that he couldn’t do the deal after all, because the Triangle board would not approve the change of control. “I literally ran the check under his nose, the spittle started to come out of his mouth, he was dying to put his arms around the money,” Peltz declared. “I said, ‘Let me try, let me talk to the board, let me show them I don’t have horns.’"

Source:The Predators' Ball

"In April 1983, Peltz and May (in a two-thirds/one-third partnership) purchased Goldberg’s block, 29 percent of Triangle’s shares, for about $14 million. Two million was lent to Trafalgar; twelve million was lent to Peltz and May, from Manufacturers Hanover and Bankers Trust. Bankers Trust took the stock as collateral; Manufacturers Hanover took Peltz’s and May’s signatures and a lien on Peltz’s house in Quogue. Peltz recalled that it took all his powers of persuasion at the bank, and that when he finally walked out of Bill Rykman’s office at Manufacturers Hanover with the certified check in hand and met Goldberg, Goldberg told him that he couldn’t do the deal after all, because the Triangle board would not approve the change of control. “I literally ran the check under his nose, the spittle started to come out of his mouth, he was dying to put his arms around the money,” Peltz declared. “I said, ‘Let me try, let me talk to the board, let me show them I don’t have horns.’ ”"

Source:Predator's Ball

"I also told the governor that we should instruct the New York bank superintendent to keep one bank open beyond the normal 3 P.M. closing time. My thought was that if Shanker waited until the last minute to agree, we’d need to have a bank ready to receive the funds. After a conversation with Carey, the state bank superintendent, John Heimann, instructed Manufacturers Hanover to remain open until midnight. To make sure that this “after hours” strategy was actually practical, I called Judge Rifkind and asked for a legal opinion. Did New York have until midnight to pay off its notes rather than the usual bank closing time at 3 P.M.? Rifkind, to my great satisfaction, concurred that default for nonpayment would not occur until the end of the entire day."

Source:Dealings

Appears In Volumes

The Predators' Ball Predator's Ball Dealings