Wall Street M&A wizard helped save New York
Felix Rohatyn, whose finesse and dealmaking talents made him one of the most influential investment bankers of his era, and who was widely credited with saving New York City from bankruptcy in 1975, died Dec. 14 at his home in Manhattan. He was 91.
Rohatyn, born in Vienna to a Jewish family, spent much of his childhood as a refugee from the Nazis. Intense, driven and discreet, he worked as a banker and adviser to corporate clients at New York’s Lazard Frères & Co.
He socialized at the nexus of financial and political power, and in 1997 became President Bill Clinton’s ambassador to France.
Early in his Lazard career in corporate buyouts and mergers, he had to go to night school to learn to read a balance sheet.
He quickly took the lead in negotiating debt-fuelled megadeals and complex restructurings. He participated in Kohlberg Kravis Roberts’ leveraged buyout of RJR Nabisco in 1986, which led to massive management payouts. (He would later criticize extreme levels of debt as a threat to the economy and criticize Wall Street for its culture of “rampant greed.”)
Rohatyn was perhaps best remembered as the “wizard” who stepped in — unpaid — to rescue New York from death by debt.
In 1975, the city was swamped with $6 billion in short-term debt, and at the invitation of New York Gov. Hugh Carey, Rohatyn took the lead role in what became the Municipal Assistance Corp., which included business leaders but no politicians. Rohatyn thought the assignment would last three weeks, but he oversaw the city’s finances for 18 years.
The MAC persuaded unions to invest part of their pension funds in MAC bonds, to agree to a 20 per cent cut in the municipal workforce over five years, and got bankers to defer $1.6 billion in debt.
MAC sold almost $10 billion in bonds, paid off its debt in 2008 and shut down.
Felix George Rohatyn was born May 29, 1928. Rohatyn’s first marriage, to Jeannette Streit, ended in divorce. In 1979, he married Elizabeth Fly Vagliano. She died in 2016. Survivors include three sons from his first marriage, a stepdaughter and six grandchildren.