William Stern
Property developer, financier and Britain’s biggest bankrupt
WILLIAM STERN, who is reported to have died of Covid-19 aged 84, was a property developer and financier who became Britain’s biggest bankrupt after the 1973-74 property crash.
Having broken away from his family’s property business in 1971 to launch on his own, Stern accumulated at his peak a notional £200million worth of assets under his holding company Wilstar Securities – funded by £180million of loans from many British and American banks.
“I believed property would hold its value,” he said later. When the crash, provoked by an oil price spike, struck in December 1973 and continued amid the political turmoil of early 1974, “it was the equivalent to walking out of the house and before you reach the corner, there is an earthquake. It was not capable of being foreseen.”
With encouragement from the Bank of England, loans to keep Wilstar afloat were injected by Natwest and the Crown Agents. The latter, an entity founded to provide financial services to the British Empire, had strayed into speculative property lending in London and was almost ruined by debts from Stern’s group which compounded, with unpaid interest, to
£54 million.
By May 1974 the situation was irretrievable and Wilstar’s affairs were in the hands of the City’s “great liquidator”, the formidable Sir Kenneth Cork, who constructed what became known as “Cork’s Dam” – a moratorium in which creditors held off while the afflicted property portfolio was sold off piece by piece.
Most creditors eventually got half their money back. But one of them, the merchant bank Keyser Ullman which was owed £13million, decided to pursue Stern into bankruptcy.
The 1978 judgment against him, involving £118million of debt (largely in the form of guarantees of his companies’ borrowings) against personal assets of just £10,000, was not surpassed until Kevin Maxwell’s £406million fall in 1992.
William George Stern was born Vilmos György Stern, son of Edmond Stern, in Budapest on 2 July 1935. After the Nazi occupation of Hungary in March 1944, Edmond’s family were taken to the Bergen-belsen concentration camp in Germany. They survived the war and emigrated in 1952 to New York, where William became a US citizen and studied at Yeshiva University and Harvard Law School.
In 1957 he married Shoshana, daughter of a rabbi who had been killed by the Nazis and stepdaughter of Osias Freshwater, one of London’s largest private landlords and a leading Jewish philanthropist. After moving to London, Stern became managing director of Freshwater’s group of companies.
In 1971 he began creating his own empire of some 180 companies – including Nation Life Insurance which sold unitised property funds to retail investors, a “fringe bank” called First Maryland, and a housebuilding enterprise in Israel. He also owned 65 blocks of London flats.
After his discharge from bankruptcy in 1985, Stern quietly built a new property group, Dollar Land. But it collapsed in 1993 with debts of £11million and he was later banned from holding directorships for 12 years, the judge accusing him of “a fundamentally irresponsible attitude to his duties as a director”.
His family’s wealth was protected by support from his father, however and Stern was also an active philanthropist. Concerned that Jewish students should not abandon religious traditions, for many years he funded a kosher canteen at Imperial College, London. The Sterns kept homes in Hampstead, Jerusalem and the south of France.
William Stern is survived by Shoshana and their six children. Their daughter Esther is the widow of Benzion Dunner, who was known as “God’s Postman” for his generosity to members of north London’s Jewish community.