Saul P. Steinberg dies at 73; corporate raider amassed multiple fortunes


Saul P. Steinberg, who critics say used Reliance Insurance Co. as a personal piggybank, taking out hundreds of millions of dollars to fund an opulent lifestyle and his many adventures in corporate raiding died Dec. 7 at his home in Manhattan. He was 73. (Hugh Brown/AP)

Saul P. Steinberg, an audacious financier and corporate raider who often drew as much attention for deals that did not happen as for those that did and who often earned millions of dollars either way, died Dec. 7 at his home in Manhattan. He was 73.

His daughter Laura Tisch Broumand confirmed the death but did not disclose the cause.

Before his business collapsed into bankruptcy about a decade ago, Mr. Steinberg embodied a risk-embracing, sometimes freewheeling approach to business abetted by high-risk, high-yield “junk bond” financing in the 1980s. He earned multiple fortunes that enabled an almost impossibly sumptuous lifestyle, and his wealth thrust him into New York’s cozy nexus of finance, high society and philanthropy.

Mr. Steinberg’s ambition first manifested itself at the University of Pennsylvania’s Wharton business school in the late 1950s. Using a loan from his father, a Brooklyn rubber company owner, the younger Mr. Steinberg developed the idea to lease used IBM computers to small businesses.

Leasco Data Processing Equipment Corp., as Mr. Steinberg’s firm became known, made Mr. Steinberg a millionaire by the time he reached 30. The company went public in 1965, and three years later, it acquired Reliance Insurance Co. of Philadelphia on borrowed money. At the time, investors marveled and quaked at how the much smaller Leasco was able to take over Reliance, a $700 million firm with a pedigree dating to the early 19th century.

“You watch: like the Rockefellers, I’ll own the world,” he told the financial journalist Dan Dorfman at the time. “I could even be the first Jewish president.”

After the Reliance deal, Mr. Steinberg set about buying Chemical Bank, the nation’s sixth largest commercial bank. He was rebuffed, but the effort cemented Mr. Steinberg’s reputation as a man to watch out for. He drew the attention of regulators in Washington as well as business moguls who did not want him muscling in on their companies.

Through the economic malaise of the 1970s, Mr. Steinberg suffered financial setbacks, but he restructured the company and spun off some operations that brought Reliance massive infusions of cash. Flush with funds, he made a run at the Walt Disney Co. in 1984, buying up company stock and ruminating publicly about his intention to take over the company.

In what is often derisively called “greenmail,” Disney bought back Mr. Steinberg’s shares at a premium, and Mr. Steinberg reportedly made a profit of nearly $60 million. The Philadelphia Inquirer reported that Mr. Steinberg had earlier made millions with this strategy from Quaker State motor oil and the Penn Central railroad, among other companies.

At various times, Reliance’s holdings included the Days Inn hotel chain and Telemundo, the Spanish-language television network.

To finance his assertive approach to business ventures through the 1980s, Mr. Steinberg enlisted the help of a fellow Wharton graduate, financier Michael Milken. Mr. Steinberg borrowed hundreds of millions of dollars, using junk bonds issued by Milken, to finance his takeover bids and underwrite his increasingly grandiose lifestyle.

Mr. Steinberg and his family treated Reliance as a “private fiefdom,” Abraham Briloff, a retired accounting professor at Baruch College in New York who studied Mr. Steinberg’s accounting practices, told the Associated Press in 2003.

Mr. Steinberg put family members on his board and paid himself tens of millions of dollars annually. He also developed a reputation for opu­lence — he and his third wife, the former Gayfryd McNabb, once lived in a 17,000-square-foot Park Avenue apartment previously owned by John D. Rockefeller Jr. He bought paintings by Old Masters, hanging a Rubens in the drawing room and a Renoir in a bathroom.

The Steinbergs became fixtures in New York’s social and charity orbit, and Mr. Steinberg was a major benefactor of his alma mater in Philadelphia. In 1988, his daughter Laura married Jonathan Tisch, the Loews hotel company scion, and their wedding dinner was a gala at the Metropolitan Museum of Art that attracted swooning coverage and 500 guests, including author Norman Mailer, businessmen Henry Kravis and Donald Trump, Republican Party fundraiser Georgette Mosbacher and civil rights activist Vernon Jordan.

Mr. Steinberg’s business continued apace until he suffered a stroke in 1995. He slowly pulled himself back into command of the business, and its stock continued to rise to record highs. But a severe downturn in the insurance industry and a series of disastrous business decisions left the company in turmoil. He also fired his brother, Robert, who had been president of Reliance.

Mr. Steinberg was sued by industry regulators, stockholders and, in 2000, his mother, the former Anne Cohen, who alleged that he owed her almost $5 million that he had borrowed a few years earlier. The firm quickly tumbled into bankruptcy, and Mr. Steinberg left his position as chairman before Pennsylvania regulators stepped in to manage the company’s liquidation.

About that time, Mr. Steinberg sold his Park Avenue apartment for $37 million and auctioned off millions of dollars more in antiques and paintings.

Saul Phillip Steinberg was born in Brooklyn on Aug. 13, 1939. He graduated from the Wharton School in 1959 with a bachelor’s degree in economics.

His marriages to Barbara Herzog and Laura Sconocchia ended in divorce. Besides his wife, survivors include three children from his first marriage; a son from his second marriage; two children from his third marriage; a brother; two sisters; and five grandchildren.

His son Jonathan is chief executive of the New York-based investment company Wisdom Tree and is married to business TV anchor Maria Bartiromo.

Mohana Ravindranath covers IT and small business for the Washington Post and its weekly Capital Business publication.
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