Nicholas F. Brady, chairman of the investment banking firm of Dillon, Read & Co., which represents Unocal and many other blue-chip corporations, challenged Pickens' self-proclaimed role as the shareholders' advocate.

"The argument is couched as if the shareholder is god and the only constituency to be served," Brady said in an interview. "The modern American corporation's constituencies are not limited to its shareholders alone -- it has people who work for it, it pays taxes to the U.S. government, it has suppliers and it administers pension funds for its employes.

"To hold out an increase in stockholder value as the redeeming social grace for increasing debt on oil company balance sheets to raise stock prices . . .is ignorant of the contract between the modern American corporation and the American public. For the glorification of one constituency, you ignore the others. The use of enormous leverage to accomplish this is unsound. The short-term stockholders of target companies are arbitrageurs professional investors ; all we are doing is feeding the lions a big roast beef dinner.

"Let's not have drunk driving and speeding on our financial highways. We are, by saying there is no limit to what the shareholder can do to maximize wealth, ignoring every other part of the system."

"You can't leverage to 100 percent without bankruptcies. A lot of people will get hurt and debt holders will give up on the market . . . . The people who buy these financings aren't the people who hold fixed income instruments until maturity. Where is all this debt going? Who ultimately holds these bonds?" asked Brady. He isn't sure, he said, but he worries that ultimately, it will be speculators or short-term investors who will dump the bonds at the sign of trouble.

"Whether large corporations can be treated like artichokes and simply torn apart without any regard for employes, communities or customers solely in order to pay off speculative debt, is a further question of public policy," says Felix Rohatyn of the investment firm Lazard Freres. "The public should pay attention to these activities, because in the last analysis, the public always pays."

Rohatyn is worried that the trend toward junk bonds carries with it a troubling increase in the level of risk in investments.

"There'd be no junk bonds . . . if institutions weren't often willing to ignore substandard credit ratings in exchange for higher yields," said Rohatyn. "Under the banner of deregulation and total faith in the marketplace, we're impairing our greatest of assets: the credibility of our capital markets and the faith in our financial institutions."