Ronald Perelman

From Wikipedia, the free encyclopedia

You have new messages (last change).
For the actor, see Ron Perlman.
Ronald Perelman

2002 photo. (AP)
Born: January 1, 1943 (age 64)
Flag of United States Greensboro, North Carolina
Occupation: Businessman, investor
Net worth: Image:Green up.png $7 billion USD (2006)
Children: 6
Website: MacAndrews & Forbes Holdings Inc.

Ronald Owen Perelman (born January 1, 1943) is a wealthy American investor and businessman who made his fortune buying beleaguered corporations and selling them later for an enormous profit. Despite his wishes to the contrary,[1] Ronald Perelman has constantly found himself in the headlines because of his billion-dollar businesses and million dollar divorces. His collection of businesses has included such household names as Revlon, Technicolor, and Hummer, to name a few. He is currently listed as the 104th richest person in the world on the Forbes The World's Richest People, with an estimated wealth of USD$7 billion,[2] dropping ten positions from the previous year.[3] But Ron's not all about business; He scrupulously observes the traditions of Judaism and gives millions of dollars a year to charity.

Contents

[edit] Business

[edit] Belmont Industries

Ronald Perelman was raised in the board room and so it is unsurprising that he brokered his first business deal very early in life. His first major business deal took place in 1961 when he was a freshman in college. After being put on the scent of the Esslinger Brewery by his father, Ronald turned his attention to the details and found it to be an excellent deal. He and his father bought it for $800,000. They sold it three years later for a $1 million profit.[4]

Throughout Ronald's tenure at the Belmont Iron Works (later renamed Belmont Industries) he assisted his father on many more deals, earning millions of dollars in the process. Their general strategy was to purchase a company, sell off superfluous divisions to reduce debt and generate profit, and bring the company back to its fundamentals. In 1978, twelve years after Ronald Perelman formally joined Belmont Industries, Ronald Perelman was the vice president but he was still agitating for more power and influence in the company. Raymond told Ronald that he had no intention of stepping down anytime soon. Ronald resigned and moved to New York. The two barely spoke to one another for the next six years.[4]

[edit] On his own

The first deal Ronald Perelman orchestrated free of his father's influence was his purchase of Hatfield Jewelers in 1978. Recognizing the enormous value of its mismanaged jewelry cache, he bought control of the company with a $1.9 million loan from his wife, Faith Golding. Within a year, Perelman had sold off all of company's retail locations and reduced the company to its lucrative wholesale jewelry division, earning himself $15 million.[4]

His next target was MacAndrews & Forbes, a distributor of licorice extract and chocolate. He was repeatedly rebuffed by the management and investors, who filed a lawsuit to try and block his purchase, but they were unsuccessful, allowing him to acquire the company. His success was particularly sweet because his father had tried and failed to acquire it ten years earlier.[4]

[edit] Revlon

Main article: Revlon

In 1985, Ronald Perelman took on his biggest deal yet: The Revlon Corporation. Financed with over $700 million in junk bonds from Michael Milken's firm Drexel Burnham Lambert, Perelman offered to buy any or all of Revlon's 38.2 million outstanding shares for $47.5 a share when it was selling for about $45 a share. Initially rejected, he repeatedly raised his offer until it was up to $53 a share while fighting Revlon's manangement every step of the way. Forstmann Little & Company swooped in at $56 a share and a brief public bidding war ensued. Ronald Perelman ended up paying $58 a share. Along with $900 million in other costs(Legal fees, investment bankers, etc), acquiring Revlon cost him about $2.7 billion. Unfortunately for Perelman, Revlon has been nothing but trouble. Despite Perelman's regular cleansing of upper management and dumping millions of dollars into the company, Revlon has stubbornly refused to turn a profit. As of first quarter 2007, it has had one profitable quarter in its past 32.[5] Its lack of profitability shows in its stock price which has slumped to less than 1.50 a share as of 2007.[6] A major cause of its financial problems is the huge debt load stemming from Perelman's purchase of the company.[7]

[edit] Savings and loans

In late 1988, amid rumors that he was pursuing everyone from the Coca-Cola Company to Disney, Perelman made the most profitable move of his career: He bought five insolvent Savings and Loan banks in Texas, involving himself in what became known as the Savings and Loan crisis. He bought control of over $12 billion of assets for $315 million, in addition to billions in financial guarantees from the government and a tax shelter that he used well into the 21st century to shield the profits of his many companies. He later added another $890 million of S&L assets for $10 million, again gaining various government guarantees. In the first year of operation, the banks generated $250 million dollars in profit and tax perks for Perelman. His profits had not escaped scrutiny from congress who were raising allegations of abuse of the program. Perelman proceeded to donate over $100,000 to various congressional campaigns, but he still ended up losing millions in tax benefits he had been counting on. In 1992, Perelman sold off most of his S&L conglomerate(He had combined them all into one company called First Gibraltar Bank) to Bank of America for $1 billion, but he held onto four branches for tax purposes.[8] In 1994, Perelman purchased another S&L from Ford Motors for $1.2 billion of cash and assumed debt. After a merger and a buyout by Citigroup, his personal stake is worth $1.6 billion.[8]

[edit] Marvel

While the S&L crisis was drawing national attention, in 1989 Ronald Perelman made a move that left many analysts scratching their heads. He bought the Marvel Entertainment Group, the parent company of Marvel Comics, from New World Entertainment for $82.5 million. "It is a mini-Disney in terms of intellectual property," said Perelman. "Disney's got much more highly recognized characters and softer characters, whereas our characters are termed action heroes. But at Marvel we are now in the business of the creation and marketing of characters."[9] He went to work immediately and Marvel's profits immediately spiked, boosted by a massive merchandising effort, an increase in Marvel comic prices, and an overall boom in the comic book industry. Perelman later added the Fleer Corporation, SkyBox International, the Panini Group(An Italian sticker manufacturer), Welsh Publishing, and Malibu Publishing for a combined total of $700 million.[10] Investors around the world recognized his efforts and generated $80 million for Perelman when he issued an IPO for Marvel. He later added a significant stake in Toy Biz to Marvel's holdings. Unfortunately, his luck was not to last. Marvel's attempt to distribute its products directly lead to a decrease in sales and aggravated the losses Marvel suffered when the comic book bubble[11] popped and the 1994 Major League Baseball strike massacred the profits of the Fleer and Panini divisions.[12] A major bondholder, Carl Icahn, fought to take control of the company from Perelman. Both men failed as Ike Perlmutter and Avi Arad swooped in and snatched Marvel from Perelman and Icahn in order to protect their own financial interests. What Perelman made off of the deal is disputed. Chuck Rozanski estimates that Perelman made $200-400 million off Marvel while Forbes thinks Perelman made nothing.[10][8]

[edit] New World Communications

Main article: New World Communications

In 1989, Perelman went back and bought New World Entertainment, the same company he bought Marvel from. He then bought Four Star International. In 1993, Perelman bought SCI Television for $120 million plus $730 million in assumed debt, acquiring seven television stations in the process. His second major purchase of '93 was Genesis Entertainment. His final television-oriented purchase in 1993 was Guthy-Renker. In late 1993, all of the above-mentioned companies were reorganized into a single corporation called New World Communications. In 1994, Perelman bought four more stations from the Great American Communications Company for $360 million and four more from Argyle Television Holdings for $716 million. These purchases set the stage for the Fox affiliate switches of 1994 in which Ronald Perelman rewrote the rules for how television affiliates operated and helped establish Fox as a force to be reckoned with.

[edit] Coleman and Sunbeam

In between his purchase of Marvel and New World Communications, Perelman bought the Coleman Company for $545 million. Perelman performed his usual magic, selling off everything but Coleman's camping and boating divisions. Over the next several years, he bought nine more divisions for Coleman.[13] In December 1997, Ronald Perelman and Al Dunlap met in order to discuss a possible deal between Coleman and Sunbeam Products. Coleman was stuck in a rut and Ronald Perelman wanted out. Coincidentally, Al Dunlap was sitting on top of a financially insolvent company he wanted out of.[14] It took until March 2 for the two to finally come to an agreement: Perelman sold his entire stake(82%) in Coleman to Al Dunlap in exchange for $1.5 billion in cash and $680 million of Sunbeam stock.[15] Perelman was convinced to do so by investment banker Morgan Stanley.[15] The deal was only completed on March 30. An ominous press release from March 19 said Sunbeam wasn't going to be able to meet sales expectations, triggering a sell-off. On April 3, another press release took Sunbeam's stock from bad to worse: It not only would not be meeting sales expectations for that quarter, but barely even the sales expectations of two years ago. Within weeks, the stock tumbled from $54 a share to $24 a share and it continued tumbling. Ronald Perelman bought control of Sunbeam in an effort to salvage the situation but it was for naught. The company was forced into bankruptcy within three years.[14] Perelman turned around and lashed out at Morgan-Stanley, filing a lawsuit against them claiming they had misled him by playing up the value of Sunbeam when they should have known otherwise. [16]

[edit] Other

The above list is by no means an exhaustive list of companies Ronald Perelman has controlled. His portfolio currently includes or has included Allied Barton,[17] Am General,[17] Clarke American,[17] Deluxe Laboratories,[17] Meridian Sports,[4] National Health Laboratories,[18] Panavision,[17] Pantry Pride,[4] Scientific Games,[17] Siga Technologies,[17] Technicolor,[19] and TransTech Pharma.[17]

[edit] Major lawsuits

[edit] Morgan-Stanley

On February 17th, 2005, Ronald Perelman filed a lawsuit against Morgan Stanley. [20] Two facts were at issue: Did Morgan-Stanley know about the problems with Sunbeam and was Ronald Perelman misled? During the discovery phase, the judge became exasperated with she perceived as deliberate stone walling on the part of Morgan Stanley.[21] She ordered the jury to assume Morgan Stanley deliberately and knowingly defrauded its clients.[21] Hobbled, Morgan Stanley's legal team was left with no choice but to argue that Ronald Perelman was too savvy an investor to have fallen for their tricks.[16] After a five-week trial, the jury deliberated for two days before finding in favor of Ronald Perelman, awarding him $1.45 billion in damages.[22] The damages are particularly painful given that Perelman offered to settle the case for $20 million.[23] Morgan Stanley maintained that the court case was improperly decided, citing the judge's decision to use Florida law over New York law and her decision to order the jury to consider Morgan Stanley guilty before the trial began.[24] In 2007, the case was reversed. The judges' declared that Perelman hadn't provided any evidence showing he'd suffered any actual damage as a result of Morgan-Stanley's actions. Perelman has promised to appeal.[25]

[edit] Life

Ronald Perelman was born in Greensboro, North Carolina to Raymond and Ruth Perelman.[4] Raymond was an accomplished businessman in his own right. Along with his father and brother, he controlled the American Paper Products corporation.[26] Raymond eventually left the company and bought Belmont Iron Works, a manufacturer of structural steel.[26]

It was on Raymond's knee that Ronald learned the fundamentals of business.[27] By the time Ronald turned eleven years old he was already sitting in on the board meetings of his father's company.[4] However, life was by no means easy for Ronald. Raymond was a rough teacher, harshly criticizing Ronald for even the slightest misstep.[14]

Ronald Perelman attended The Haverford School. After graduation, he went to the Wharton School at the University of Pennsylvania where he followed in his father's foot steps and majored in business. After completing his degree in 1964,<refname="DailyPenn">Jeff Gordinier (2006). Perelman: Man behind the paln. Daily Pennsylvanian. Retrieved on 2007-03-29.</ref> Ronald took a break from schooling to go to Israel. It was during this break that he met the woman who would become his first wife, Faith Golding.[4] He returned to the University of Pennsylvania and in 1966 he graduated with a master's degree from the Wharton School.[28]

[edit] Charity

Ronald Perelman gives extensively to charity. In 2006 alone, he gave over $60 million dollars to various charitable groups and causes including Carnegie Hall and the World Trade Center Memorial.[29] This generosity was in no way unusual for Ron. His other notable donations include $20 million to the University of Pennsylvania to name the quadrangle,[30], $10 million to New York University to create the Ronald O. Perelman Department of Dermatology,[31], $4.7 million to Princeton University to create the Ronald Perelman Institute for Jewish Studies,[32], and $20 million to the Guggenheim Museum[33], to name a few.

[edit] Cigars

The phrase 'cigar-chomping' has a habit of appearing anywhere the name Ronald Perelman is written and with good reason.[34][35][36] Perelman first lit up when he was 26 years old. Trapped in a meeting that refused to end, a lawyer named Laddie Montague lit up a cigar. Perelman noticed how much Laddie enjoyed the cigar and asked to try one. Laddie obliged him.[37] From that day until he quit in 1999,[38] he smoked between one and five cigars a day. [4] Perelman had Consolidated Cigar manufacture a custom 38-ring H. Upmann-style cigar just for him.[37][39]

[edit] Love

Perelman has been married four times. His first marriage was to heiress Faith Golding from 1965 to 1984, his second was to gossip columnist Claudia Cohen from 1985 to 1994, his third was to socialite Patricia Duff from 1994 to 1996 and his fourth was to actress Ellen Barkin from 2000 to 2006. His marriages always attract media attention, but avoiding marriage wouldn't help; even his dating life is a source of constant tabloid speculation.[40][41]

[edit] Faith Golding

Ronald Perelman met his first wife, Faith Golding, in 1965 while on a cruise to Israel.[4] As the heir to a fortune made in real estate and banking, Faith Golding was quite wealthy in her own right with a personal fortune of around $100 million at the time of their marriage.[4] The two of them adopted three children (Their names are Steven, Josh, and Hope) and Faith gave birth to a fourth child named Deborah. Their marriage lasted until 1984 when Faith discovered Perelman was having an affair with a local florist. Faith responded with great fury and staked a claim to a third of MacAndrews & Forbes due to a bank loan in her name, declared that Perelman had defrauded the owners of the First Sterling Corporation (i.e. her) by buying thousands of dollars of gifts for the florist with the company's money, and otherwise made a public spectacle of the divorce.[4] Ronald Perelman responded by hiring Roy Cohn and denying all of the allegations. The two settled privately out of court,[14] but it's estimated that Faith received compensation in excess of $8 million.[4]

[edit] Claudia Cohen

Ronald Perelman met his second wife, Claudia Cohen, in 1984 at Le Cirque.[4] The two dated for a year, frequently appearing on the gossip pages thanks to Claudia's position in the gossip industry and Perelman's immense wealth. They married a year after they first met in a private, Orthodox wedding. Perelman wasn't afraid to love or bestow jewelry upon his new love, blowing her kisses in the hallways of his office and home. Their love was not to last. By August of 1993, Ron's love for Claudia was gone; He filed for divorce.[4] Claudia left the marriage with well over $100 million of Ronald Perelman's money.

[edit] Patricia Duff

Patricia Duff was Ronald Perelman's third wife and messiest divorce. The pair first met in a Paris hotel lobby when both were still married; Perelman to Claudia Cohen, Duff to Mike Medavoy.[14] It was a case of mutual love at first sight. Shortly after meeting her Perelman would Duff as much as twenty times a day and would tell all who would listen about her beauty. Meanwhile, Duff would answer his phone calls twenty times a day and tell all who would listen the joys of his personality. After Duff divorced Medavoy she married Perelman, eventually giving him his fourth daughter, Caleigh. When the marriage between Duff and Perelman disintegrated in 1996 after eighteen montsh of marriage, Caleigh's existence became a major issue. Specifically, they both wanted full custody. In addition, Duff desired larger alimony and child support payments. Initially private, it was opened to the public at the request of Duff.[41] Neither party emerged with their reputations unscathed. The court psychiatrist found Duff to be paranoid and narcissistic and Perelman to have serious anger management issues.[42] Perelman testified that it cost about $3 a day to feed his daughter, subsequently catching a great deal of flak from the media.[43] Both sides alledged physical abuse of themselves by the other party.[44] The judges' sealed decision means the public will never know the result of the case.[45]The original would be linked, but it's inaccessible.Dareh Gregorian and Eric Lenkowits (2001). Revlon Ron child custody case resolved. NY Post. Retrieved on 2007-03-25.</ref>

[edit] Religion

Religion has had a consistently strong influence on Ronald's life. He strictly observes the [[Jewish Sabbath], spends three hours every Saturday in prayer,[46] keeps a kosher home,[47], and donates millions to Jewish groups and causes, particularily the Chabad-Lubavitch sect.[46]

[edit] References

  1. ^ This is a short Q&A-style interview. Jeff Gordinier (2006). Wiseguy: Ronald Perelman. Details. Retrieved on 2007-01-22.
  2. ^ #104 Ronald Perelman. Forbes. March 8, 2007.
  3. ^ The World's Richest People. Forbes (2006). Retrieved on 2007-01-22.
  4. ^ a b c d e f g h i j k l m n o p Hack, Richard (1996). When Money Is King: How Revlon's Ron Perelman Mastered the World of Finance to Create One of America's Greatest Business Empires, and Found Glamour, Beauty, and the High Life in the Bargain. Beverly Hills, CA: Dove Books, 1. 0-7871-1033-7. 
  5. ^ Gale Group (2005). Revlon Reports First Profitable Quarter in Six Years; Fourth Quarter and Full Year 2004 Results in Line with Expectations. Business Wire. Retrieved on 2007-02-07.
  6. ^ Google Finance - Revlon, Inc. Google (2007). Retrieved on 2007-02-07.
  7. ^ Cotten Timberlake and Shobhana Chandra (2005). Revlon profit first in more than 6 years. Bloomberg Publishing. Retrieved on 2007-03-20.
  8. ^ a b c Matthew Miller (2005). Don't Mess With Me. The Forbes 400. Forbes Publishing. Retrieved on 2007-01-29.
  9. ^ Dan Raviv (2002). Comic Wars. Random House. Retrieved on 2007-01-27.
  10. ^ a b Chuck Rozanski is an very well-known purveyor of comic books and had a walk-on role in the Marvel fiasco. If you're interested in Marvel, try reading the rest of the aricles in Tales from the Database. Chuck Rozanski. Perelman's Team Nearly Destroyed the Entire World of Comics. Mile High Comics. Retrieved on 2007-01-27.
  11. ^ A minority of dissidents maintain there was never a bubble in the first place. Chuck Rozanski. The Vicious Downward Spiral of the 1990s. Tales From the Database. Mile High comics. Retrieved on 2007-01-27.
  12. ^ Jeremy Lott (2002). Smash! Pow! Bam!. Reason Online. Reason Magazine. Retrieved on 2007-01-27.
  13. ^ This is the hands-down best profile of Ronald Perelman available online. MacAndrews & Forbes Holdings Inc. -- Company History. FundingUniverse.com (1999). Retrieved on 2007-01-29.
  14. ^ a b c d e Byron, Christoper M. (2004). Testosterone Inc. Tales of CEOs Gone Wild. John Wiley & Sons, Inc: Dove Audio, 289-291,297. 0-471-70623-X. 
  15. ^ a b Sheryl Fred (2006). DiscoveryDishonesty. Inside Counsel. Wicks Business Information. Retrieved on 2007-01-29.
  16. ^ a b Bo Rosser (2005). On the stand, billionaire Perelman accuses Morgan Stanley of fraud. Court TV. Retrieved on 2007-03-20.
  17. ^ a b c d e f g h MacAndrews & Forbes Holdings inc (2007). MacAndrews & Forbes Holdings Inc. MacAndrews & Forbes Holdings inc. Retrieved on 2007-03-25.
  18. ^ Milt Freudenheim (1994). COMPANY NEWS; Blood-Testing Concerns Plan $1.79 Billion Merger. New York Times. Retrieved on 2007-03-25.
  19. ^ MacAndrews & Forbes Holdings inc (2007). MacAndrews & Forbes Holdings Inc. MacAndrews & Forbes Holdings inc. Retrieved on 2007-03-25.
  20. ^ COURT TV ONLINE - Coleman vs. Morgan Stanley. Court TV (2005). Retrieved on 2007-03-20.
  21. ^ a b Susanne Craig (2005). How Morgan Stanley botched a big case by fumbling emails. The Wall Street Journal. Retrieved on 2007-03-20.
  22. ^ Bo Susan Rosser (2005). Jury awards Perelman $850 million in damages from Morgan Stanley. Court TV. Retrieved on 2007-03-20.
  23. ^ James J. Cramer. Morgan Stanley CEO Phil Prucell's People Problem. New York Magazine. Retrieved on 2007-03-20.
  24. ^ Carl Jones (2005). Law.com - Morgan Stanley: 'Record Is Clear' That Florida Judge Erred. Daily Business Review. Retrieved on 2007-03-20.
  25. ^ Joe Bel Bruno (2007). ABC News: Morgan Stanley-Perelman Judgment Flipped. ABC News. Retrieved on [[2007-03-23]].
  26. ^ a b Philadelphia Museum of Art - Information : Our Future : Perelman Building: Raymond G. and Ruth Perelman. Philadelphia Museum of Art. Retrieved on 2007-03-20.
  27. ^ Anthony Ramirez (2006). The Year's 50 Most Fascinating Business People Ron Perelman Revlon's Striving Makeover Man. Fortune Magazine. Retrieved on 2007-01-22.
  28. ^ UPHS News: Raymond and Ruth Perelman Donate $25 Million to Name PENN Medicine's Center for Advanced Medicine. University of Pennsylvania (2005). Retrieved on 2007-03-20.
  29. ^ Error on call to Template:cite web: Parameters url and title must be specified. The Chronicle of Philanthropy (2006). Retrieved on 2007-03-29.
  30. ^ Error on call to Template:cite web: Parameters url and title must be specifiedTristan Schweiger (2000). . Daily Pennsylvanian. Retrieved on 2007-03-29.
  31. ^ Error on call to Template:cite web: Parameters url and title must be specifiedSteven Lee Myers (1991). . New York Times. Retrieved on 2007-03-29.
  32. ^ Error on call to Template:cite web: Parameters url and title must be specifiedSteven Lee Myers (1995). . New York Times. Retrieved on 2007-03-29.
  33. ^ Error on call to Template:cite web: Parameters url and title must be specifiedLee Rosebaum (2003). . Art in America. Retrieved on 2007-03-29.
  34. ^ Parmy Olson (2005). Billionaire Perelman Buys Film Unit For $745M. Forbes.com. Forbes. Retrieved on 2007-02-02.
  35. ^ Rebecca Winters (2005). People - Tuesday, Sep. 06, 2005 -- Page 1. Times.com. Time Magazine. Retrieved on 2007-02-02.
  36. ^ Phillip Sherwell (2006). Divorce No 4 takes Revlon tycoon's payouts to $138m. Telegraph.co.uk. Telegraph. Retrieved on 2007-02-02.
  37. ^ a b Marvin R. Shanken. Cigar Stars. Cigar Aficionado. Retrieved on 2007-02-02.
  38. ^ Forbes 400 Richest in America 2000. Forbes (2000). Retrieved on 2007-02-07.
  39. ^ Consolidated Cigar later retailed the cigar under the name "Chairman's Reserve". Jane L. Levere (1997). Consolidated ads go one-up for H. Upmann. N.Y. Times News Service. Retrieved on 2007-02-07.
  40. ^ Richard Johnson (2006). WE HEAR.... New York Post. Retrieved on 2007-03-25.
  41. ^ a b Court TV's servers can be quite insolent. If they give you any lip, copy the link directly into your address bar. Andres Martinez (2005). Billionaire a name in gossip columns as often as business section. Court TV. Retrieved on 2007-03-25.
  42. ^ Larry McShane (1999). Perelman v. Duff: A divorce of the vanities. Associated Press. Retrieved on 2007-03-25.
  43. ^ Michele Oreklin (1999). People. Time Magazine. Retrieved on 2007-03-25.
  44. ^ The original would be linked, but it's inaccessible. Dareh Gregorian (1998). Bitch slapping Ron Perelman. NY Post. Retrieved on 2007-03-25.
  45. ^
  46. ^ a b Michael Powell (1998). Perelman Power. Washington Post. Retrieved on 2007-03-29.
  47. ^ Lillian Ross (2005). Ellen Barkin At Home. The New Yorker. Retrieved on 2007-03-29.


Persondata
NAME Perelman, Ronald Owen
ALTERNATIVE NAMES
SHORT DESCRIPTION Businessman, investor
DATE OF BIRTH January 1, 1943
PLACE OF BIRTH Greensboro, North Carolina, United States
DATE OF DEATH
PLACE OF DEATH
Retrieved from "http://en.wikipedia.org../../../r/o/n/Ronald_Perelman_257a.html"