Beer, Bravado Flow Drexel Survivors Mark Anniversary of Demise
NEW YORK (AP) _ This Drexel Burnham Lambert Inc. conference had nothing to do with junk bonds, insider trading, federal investigations or a guy named Michael Milken. It also had everything to do with them.
On the anniversary of the firm’s downfall, hundreds of former employees toasted Drexel not for the criminal entanglements but for the success that made it Wall Street’s most feared and envied investment house in the cutthroat 1980s.
An air of defiance mixed with the smell of beer at a Manhattan bar where Drexel survivors celebrated their own ″Valentine’s Day Massacre.″ They said they weren’t cocky - just good at what they did. They also loved the place.
″We were a legendary firm and that’s the bottom line,″ said Rippy Philipps, a 27-year-old securities salesman who landed a job at Kidder, Peabody & Co.
On Feb. 13, 1990, Drexel declared Chapter 11 bankruptcy court protection, after failing to survive a four-year criminal probe, a guilty plea to securities fraud and a $650 million penalty that made it a pariah.
More than 5,000 people lost their jobs, fast. At 9:30 p.m. Wednesday, about 350 of them packed Ryan McFadden, a bar on 42nd Street.
Several senior executives were there, including a former president and a former chairman. Ex-CEO Fred Joseph, who copped the guilty plea, wasn’t there; partiers said he wouldn’t have been allowed in.
Milken, the junk bond guru, would have been welcome, but he’s preparing to serve a 10-year prison sentence. Milken is the troubled genius who made Drexel junk-bond rich. His mistakes also caused its demise.
But there were few Milken apologists in the mostly young, well-dressed reunion crowd that hugged, kissed and high-fived, danced to The Clash and Dee- Lite, and even formed a conga line.
They said Milken’s entrepreneurial style permeated the company, not just his Beverly Hills, Calif., high-yield bond department. Smart, confident people made Drexel a leader in many fields besides junk bonds, the risky IOUs that financed many big 1980s takeovers, they said.
″We had an independent, honest situation. Everything we did was above board,″ said Michael Lynch, 50, who spent 17 years at Drexel and ran the institutional sales department when the firm went under.
Lynch, a burly man who downed a few, said he came to the party ″to say hello to the people who built this firm - not the people who destroyed it.″ He meant the rank-and-file as opposed to senior managers who shepherded the collapse.
″The fact of the matter was that it was corrupt and none of us who went to work there knew it,″ said Tommy Mercein, a 25-year-old corporate bond trader now with First Boston Corp.
A buddy, 27-year-old securities salesman Jeffrey Lewis, said with bravado that the resentment Drexel provoked on Wall Street - and still does - came from its success. He said success came from a creative, happy environment.
″They couldn’t touch us,″ Lewis said of Drexel’s competitors. ″At first they sneered at us. Then they were begging to do the business. We were accomplishing things other firms couldn’t do.″
Last year, Drexelites filled a Phil Donahue studio for a program about the firm. As on the show, the reunion crowd defended what they called a caring, motivating workplace that was not - repeat, was not - littered with crooks.
″We were the underdogs. That’s what made it fun,″ said Hilary Arnow, 31, a financial analyst now at a Wall Street law firm. ″They can blame us for whatever they want but we know what it was like to work there.″
″You can’t rationalize it,″ she said of Drexel’s criminal imbroglio. ″But I will never say I’m sorry I worked there. Never.″