Averted N.Y. bankruptcy in turbulent ’70s
Felix Rohatyn, a pioneering Wall Street dealmaker who was credited with saving the city from bankruptcy in the turbulent fiscal crisis of the 1970s, died Saturday at his Manhattan home. He was 91.
Rohatyn, a former Lazard Freres & Co. banker, served as the longtime chairman of a powerful board that steered New York City away from the treacherous rocks of financial disaster during a shaky era of debt and urban decline.
“He literally saved the city from bankruptcy,” the late Gov. Mario Cuomo said of Rohatyn.
His son Nicolas said the cause of death was “simply old age.”
Rohatyn was directly involved in the drama that led to one of the most famous Daily News headlines of all time.
Mayor Abe Beame and Gov. Hugh Carey pushed President Gerald Ford to back Rohatyn’s fiscal rescue plan. Ford’s initial turndown led the The News to trumpet: “Ford To City: Drop Dead.”
Ford eventually caved and agreed to back the plan.
Rohatyn, who as a child fled the Nazis with his family, rose to the pinnacle of financial power. He was a pioneer of Wall Street mergers and acquisitions in the 1960s and ’70s and became the head of the storied Lazard investment bank.
His prestige and can-do reputation as “Felix the Fixer” made Rohatyn a natural choice when New York’s elected officials sought a way out of the spiraling fiscal crisis in the mid-1970s. Saddled with billions in debt, the city was locked in a seemingly intractable cycle of decline and was facing bankruptcy in 1975 when Rohatyn was tapped to lead the Municipal Assistance Corp.
The MAC’s unelected board was given authority to spend billions in sales tax revenue and issue municipal bonds while keeping a sharp eye on the city’s bottom line. Rohatyn remained in the position for nearly 20 years, before retiring in 1993. “I get called when something is broken,” he said in a 1978 interview. “I’m supposed to operate, fix it up and leave as little blood on the floor as possible.” Rohatyn was expected to be appointed to the Federal Reserve by President Bill Clinton, but withdrew amid Republican opposition. He was named ambassador to France instead and served in the post for three years.
Rohatyn famously feuded with some of the city and state’s most powerful men, even those who counted him as a sometime friend, like Mayor Ed Koch.
“Who elected Felix mayor?” Koch once asked.
Late in life — as he weighed his 50-year career in finance — Rohatyn lamented Wall Street’s evolution from a “respectable business” to “a computer game.”
“Run by — not teenagers, but little more than that,” he told Forbes magazine in 2009. “For the sole purpose of making money. I don’t find that attractive or a good use of time and money. And I don’t think it’s something for a great country to put its main activities into.”
Rohatyn’s marriage in 1956 to Jeanette Streit ended in divorce. In 1979, Rohatyn married Elizabeth Fly, who became chairwoman of the New York Public Library. She died in 2016. Survivors include sons Pierre, Nicolas and Michael, stepdaughter Nina Griscom and six grandchildren.