Employees at Swank Beverly Hills Office Pack Up Their Belongings With AM-Drexel, Bjt
BEVERLY HILLS, Calif. (AP) _ Securities traders at the Drexel Burnham Lambert Inc. division where the explosive junk-bond market of the 1980s got its start packed their belongings Friday and rued the loss of their jobs, their company and former leader Michael Milken.
Employees hurriedly entered the Wilshire Boulevard headquarters, packed boxes, consoled colleagues and talked of other jobs.
Drexel’s parent company filed for bankruptcy protection this week in New York after defaulting on $100 million in short-term debt and failing to raise financing to prevent further defaults. Drexel blamed its demise on a capital shortage created in part by a decline in the junk-bond market. An erosion of confidence in the firm also hurt.
Many of the departing employees refused to talk with reporters Friday on short, final walks to or from a parking garage dotted with Mercedes-Benzes and Jaguars.
One man, briefcase in hand, walked past a small group of reporters. ″Bunch of vultures hanging over a dead body,″ he uttered, shaking his head slightly and refusing comment.
Others took the time to note the end of an era.
″There are some tears today. We all regard it as a real shame and a tragedy,″ said John E. Oden, director of institutional placement in Drexel’s real estate division. ″I feel like it could have been prevented.″
Oden said many Drexel employees continued to hold Milken in high regard and viewed his prosecution by former U.S. Attorney Rudolph Giuliani as the beginning of the end.
The junk-bond division was drastically altered when Milken got into criminal trouble. He quit the firm last June, but had been working only part- time for close to a year. He and partners still own the headquarters building.
″We could have used Mike Milken,″ Oden said. ″I think he could have had a positive impact and would have helped us get down the road.″
He added that Drexel’s payment of fines and restitution for securities trading violations also did the firm grave harm. A total of $500 million of $650 million has been paid.
Employees were on the telephones early Friday, as they usually are. But instead of their normal duties, they were selling positions in securities and pursuing work.
″I’m just going to let people know I’m available,″ Oden said. ″Life goes on. You can’t get down.″
Four men walked into the building, coffee in hand. ″You know of any jobs?″ a couple asked.
Oden and others said they were still reeling from the news of Drexel’s folding.
″It was a definite shock. People didn’t see it coming,″ said Andy Gumaer, a division vice president in the Beverly Hills office.
″What Michael did was a positive thing,″ Gumaer said. ″The truth is, in hindsight, maybe the firm should have stood behind Michael Milken. A lot of people feel that way.
″In hindsight, you have to wonder whether we could have called the bluff of Giuliani, and not have pleaded guilty ....″
Gumaer and others said employees were forming small groups to collectively look for work and some were considering going into business independently.
Gumaer said he personally hoped to get back into the liquidation firm that he helped run before he joined Drexel three years ago.
″I would love to get this account,″ he said, gazing at the building that became home to Drexel’s high-yield division in 1978.