Where there is failure, Ross sees opportunity
Published 16/09/2010 | 05:00
WILBUR Ross is an American capitalist straight out of central casting. Married three times and with an interest in tennis, Chinese art and Belgian surrealist painter Rene Magritte, he has made billions by betting against the crowd.
The bald, owl-like 71-year-old has been in his element since the beginning of the decade, making a fortune from failed companies, foreclosed homes, failed banks and the toxic assets created by the past two recessions.
Dubbed the 'King of Bankruptcy' by friend and foe alike, the soft-spoken financier is a contrarian investor who first gained a national reputation in the US after the September 11, 2001, attacks and the resulting economic downturn that pushed many companies into bankruptcy.
"Wilbur sees opportunity where most investors see failure and too much risk,'' said Bill Rochelle, a bankruptcy attorney at Fulbright & Jaworski in New York.
An early example of this was a $325m (€250m) investment in bankrupt steelmaker LTV in 2002, which was followed by a $4.5bn sale two years later. Other famous deals include a clash with Donald Trump over a bankrupt casino and a battle for control of a garment company that saw him squaring off with Warren Buffett.
Mr Ross is always prowling for the next deal but his actions have left a sour taste in the mouths of some who have done business with the bankruptcy mogul. When buying steel companies for example, he refused to assume pension liabilities, because he only agreed to buy assets. Others see him as the saviour of industry in crisis.
"They are in business to make money, but they have no problem sharing it with the worker,'' was the verdict on trade union official Mike Granakis, who added that Mr Ross's approach to labour relations is unlike any he's seen in the steel industry.
One of Mr Ross's more famous dust-ups came in 1990. Mr Ross, representing bondholders for the nearly bankrupt Taj Mahal casino, objected to Donald Trump's restructuring plans because it would have left him with all the equity. "It's a little too early for Christmas,'' Mr Ross said in a television interview at the time.
"Wilbur is very smart and can be a very tough negotiator,'' former colleague Harvey Tepner told Bloomberg a few years ago. "He likes to make deals. He doesn't like to be belligerent, but he's not afraid to stake out difficult positions.''
Mr Ross was a late developer. The son of a lawyer and a school teacher, he attended Yale and Harvard before working as an airline analyst and then working for Rothschild for 26 years. He was 62 before he branched out on his own.
During his quarter-century at Rothschild, Mr Ross restructured more than $200bn in assets and helped re-organise nine of the 25 largest bankrupt companies in the US. Since leaving, he has made deals totalling more than $10bn.
Mr Ross married socialite Hilary Geary in 2004. A recent birthday party for Mr Ross saw guests encouraged to wear masks of his face.
Former New York lieutenant governor Betsy McCaughey was his second wife and socialite Judith Nodine his first.