Victor Posner

Victor Posner (September 18, 1918 - February 11, 2002) was an American businessman, millionaire and philanthropist. He was known as one of the highest paid business executives of his generation. He was a pioneer of the leveraged buyout.

Early career

Of Russian descent, he was born in Baltimore, Maryland, one of nine children of grocers Morris and Mary Posner. Though he left school at age 13, he claimed to have earned his first million dollars by the age of 21 by investing in real estate, although financial records do not bear this out. Taking advantage of the post-World War II demand for housing in America, in 1948, he began to develop land and build houses in the Baltimore area and by 1952 was building more than 1,100 dwellings per year. In 1954 he moved to Miami Beach, Florida where he continued to invest in real estate and publicly traded companies. He became the head of numerous companies over his career including Security Management Corporation (owner of rental property in Maryland and Florida), DWG Corporation (Arby's and Royal Crown), NVF Company, Sharon Steel Corporation, Pennsylvania Engineering Corporation, Salem Corporation, APL Corporation, Evans Products, Graniteville, Inc. and Southeastern Public Service Company.

He was married twice. He had two children from his first marriage--twins Steven and Gail--and two children from his second marriage--Tracy Posner Ward and Lance T. Posner. He was not married at the time of his death. His erstwhile girlfriend, the former actress Brenda Nestor Castellano, was also a business partner.

Said by "Forbes" magazine to "have the arrogance of a banana republic dictator" and by the "New York Times" to be the "dean of the corporate takeover" [http://www.findarticles.com/p/articles/mi_m3190/is_n38_v23/ai_7964205] , Posner was a maverick player in the world of corporate finance. Many of his dealings were alleged to be illegal and he was closely watched by the Securities and Exchange Commission from the mid-1980s on.

haron Steel

He is perhaps best known for his hostile takeover of Sharon Steel Corporation in 1969, one of the earliest such takeovers in the United States. Sharon Steel had a coke plant in Fairmont, West Virginia, a steel plant in Sharon, Pennsylvania, and a coal mine in Rachel, Pennsylvania. His purchase was motivated by the company's low valuation, level cash flow, and low debt. It was intended to become a source of cash for additional investments to capitalize on the rising price of coal during the energy crisis of the early 1970s. His investment would be the forerunner of the leveraged buyout and junk bonds business of the 1980s. Meanwhile, the Fairmont coke plant was one of the worst polluters in the Monongahela Valley and Posner stopped investing in it. It closed in 1979. [http://www.makingsteel.com/PosnerRaidsFairmont.html]

Legal problems

The late 1980s were the start of his downfall:

* In 1987, Sharon Steel operated in Chapter 11 bankruptcy protection.
* DWG was the target of a takeover attempt by Granada Investments.
* Evans Products, operated in Chapter 11 and did not emerge until vendors and lenders were assured that Posner would leave the company.
* In 1988 he pleaded no contest to tax evasion and fraud for inflating the value of land he donated to Miami Christian College in 1975. He was ordered to pay more than $6 million in costs and fines and to devote 20 hours a week for five years to working with the homeless.
* Also in 1988, the SEC sued Drexel Burnham Lambert and charged Victor Posner and Steven Posner with scheming to conceal the Posner's purchase of stock the electrical contractor, Fishbach Corporation.
* Again, in 1988 a bankruptcy judge ordered him to return several original Norman Rockwell paintings to the Sharon Steel Corporation, which he had removed from the company's headquarters when he acquired the company.
* In 1993 both he and Steven were barred from being an officer or director of a public company by the SEC.
* In 1995, Steven sued his father over alleged mismanagement of his company, Security Management Corporation, claiming that the elder Posner was paying himself too much money and had wrongly removed Steven as a company director. They settled the suit by flipping a coin over the share of more than $200 million worth of property. [http://familyfight.com/american/miami_herald_b_41402.htm]

Posner died of pneumonia after suffering from declining health for several years.

Contested will

Not long before he died, Victor Posner prepared a new will that removed his children and grandchildren as heirs to his estate, which was valued somewhere between $200 million and $1 billion. Instead, Brenda Nestor was named as the main beneficiary. Posner's children and his adult grandchildren sued on grounds that he was not competent when he made the changes. The legal entanglements continued into 2004. Nestor still operates Victor Posner Enterprises, a property development company in Florida.

Honors included

* Victor Posner Center for Communicative Disorders, University of Miami Ear Institute (named in his honour)
* Honorary Doctor of Laws Degree, University of Miami.

References

* [http://www.opednews.com/kelly_why_estate_taxes_are_not.htm OpEdNews, quoting "Forbes" on the estate dispute, August 11, 2002.]
* [http://query.nytimes.com/gst/fullpage.html?res=9803E1DB1E3CF931A25751C0A9649C8B63 "New York Times" Obituary]
* [http://query.nytimes.com/gst/fullpage.html?res=990CE2DB1F3EF93BA3575AC0A963958260 "New York Times" article: "Victor Posner Sued by His Son" (1995)]
* [http://www.alternet.org/story/20788/ 2004 article on reinsurance scheme involving Posner and AIG Insurance]
* [http://www.findarticles.com/p/articles/mi_m3190/is_n38_v23/ai_7964205 1989 article by "Nation's Restaurant News" outlining legal troubles.]
* [http://www.makingsteel.com/PosnerRaidsFairmont.html 1991 article by Mark Reutter: "The Raider and the Coal Town"]

Further reading

*Connie Bruck, "The Predators' Ball: The Inside Story of Drexel Burnham and the Rise of the Junk Bond Raiders", New York: Penguin Books, 1989