Drexel Burnham Lambert

The disastrous decline in the junk bond market that has apparently crippled Drexel Burnham Lambert will have a sweeping impact on many other financial services companies, industry analysts said Monday. And two companies widely associated with the high-risk junk market, First Executive Corp. of Los Angeles and Columbia Savings & Loan of Beverly Hills, could be decimated by losses from their bond portfolios, these analysts said. Securities firms such as Salomon Bros.

Fred Joseph Junk-bond market co-creator Fred Joseph, 72, who as chief executive of investment bank Drexel Burnham Lambert helped create the modern junk-bond market in the 1980s before the firm's collapse, died Fridayin New York of multiple myeloma, said John F. Sorte, chief executive of Morgan Joseph & Co. Inc. Joseph arrived on Wall Street in 1963, joining E.F. Hutton. He later moved to Shearson Hammill, rising to chief operating officer before leaving to join Drexel's corporate finance department in 1974.

Asked about Drexel Burnham Lambert, an ambidextrous investment bank that makes waves in New York and money in Beverly Hills, most people on Wall Street would mutter darkly that the jury is still out on that one. This is as much a comment on our times as a comment on Drexel. As yet, after all, there is no jury and, indeed, no published charges.

I.W. "Tubby" Burnham, who founded Drexel Burnham Lambert Inc., the securities firm that later collapsed after junk-bond trader Michael Milken was jailed for securities fraud, died Monday of a heart attack on his yacht off the Virginia coast. He was 93. Burnham was born in Baltimore, earning the nickname "Tubby" as a teenager after his parents fattened him up as part of a recovery from typhoid fever.

It was only a week ago that the battle-scarred investment firm of Drexel Burnham Lambert released its 1989 earnings with a self-congratulatory commentary. The firm's relatively small $40-million loss was "a tribute to the professionalism of our staff and the loyalty of our clients," the once mighty firm said in a statement. Much has changed in a week.

At 87 years of age, U.S. District Judge Milton Pollack has seen his share of financial disasters. His career as a securities lawyer started two weeks before the 1929 stock market crash. Sixty years later that experience helped him clean up a multibillion-dollar mess stemming from the fall of Michael Milken and Drexel Burnham Lambert Inc., once one of Wall Street's most powerful investment banks, which collapsed into bankruptcy.

If Drexel Burnham Lambert Inc. would have sold junk food instead of bonds, it would still be in business today. RON LANCASTER North Hollywood

Drexel Burnham Lambert Inc. has agreed to plead guilty to six felony counts (Part I, Dec. 22). The prostituted "justice" system allows the firm to pay a $650-million fine and walk. Let's see, that equates to approximately $100 million per felony. I wonder if that is the going rate for the rest of us peasants. Drexel Burnham Lambert has gone from " . . . virtual obscurity in 1977 to a financial worth of $160 billion . . . " in 1988. Folks, that's $14.5 billion a year. Who says crime doesn't pay?

Drexel Plans Sales: Drexel Burnham Lambert Inc. announced plans to sell two companies that manage close to $3 billion of its its domestic mutual fund assets. Drexel, the Wall Street investment firm rocked by securities fraud charges, said it had reached agreements to sell Drexel Management Corp., which manages $2.8 billion in assets, and Drexel Burnham Lambert Management Corp. with its $181 million in assets. Terms of the deals were not disclosed. Martin E. Zweig, a leading Drexel money manager is one of the purchasers.

The race for mayor continued to heat up Wednesday as challenger Tom Hayden and Mayor Richard Riordan accused each other of selling their influence to campaign contributors--one to a trash firm, the other to "junk bond kings." Hayden, a Democratic state senator from the Westside, charged that junk bond specialists have given more than $100,000 to Riordan and his charter reform campaign in an effort to buy "the keys to the mayor's office."

The windows of the proud prewar skyscrapers are black, their lobbies dead as tombs, their "For Sale" and "Will Divide" signs yellow and cracked with age. When another bank or brokerage moves out, it takes the landlord three or four years to find a new tenant. This is Wall Street today. Quietly, almost while no one was looking, it became more adjective than noun, more of a state of mind than a place. There are still "Wall Street analysts" and "Wall Street profits," but no Wall Street, at least not as it used to be known.

At 87 years of age, U.S. District Judge Milton Pollack has seen his share of financial disasters. His career as a securities lawyer started two weeks before the 1929 stock market crash. Sixty years later that experience helped him clean up a multibillion-dollar mess stemming from the fall of Michael Milken and Drexel Burnham Lambert Inc., once one of Wall Street's most powerful investment banks, which collapsed into bankruptcy.

Michael Milken began testifying as a defense witness Tuesday in the criminal trial of a former Fidelity Investments mutual fund manager accused of taking payoffs from Drexel Burnham Lambert's junk bond department. Milken, the imprisoned former head of Drexel's junk bond operations, testified that he had never known the former fund manager, Patricia Ostrander, to ask for any type of bribe.

Drexel Burnham Lambert, once one of the most powerful investment banking firms on Wall Street, ceased to exist Thursday and was succeeded by a small company that will manage its remaining junk bonds. Trustees overseeing the liquidation of Drexel's assets said the brokerage's Chapter 11 bankruptcy plan of reorganization was consummated. The trust is expected to make an initial cash payment of about $639 million to creditors in the next few days. New Street Capital Corp.

John H. Kissick, an executive vice president and director of corporate finance in the Beverly Hills office of Drexel Burnham Lambert, has been named a member of the New York-based investment house's 16-member executive committee and appointed a director of its holding company. Kissick, 46, West Coast corporate finance chief for Drexel since 1975, has overseen the firm's enormous growth as an investment banker.

"The group that worked here was like the San Francisco 49ers. (Then) one day they took the quarterback; then the receivers, the old lineman left. . . . It wasn't too hard to see what was left." --A longtime employee of Drexel Burnham Lambert.