WHEN I FIRST WENT OUT on my own, I wasn't sure what I wanted to do -- whether I wanted to teach or to write or to remain an investment banker. The dilemma was solved when I wrote an article in the Harvard Business Review on tender offers and takeovers, which were then emerging. People didn't know much about them. I had the experience at Lazard in doing a couple of tender offers. I was amazed at the response to the article and I got some business out of it. So I ended up leveraging my knowledge of the merger world and set up an advisory business to, in effect, hold the hands of chief executives who were under siege in a hostile takeover or who wanted to lay siege to somebody else, because I could work both sides.
Chief executive officers, the smart ones, don't totally trust their investment bankers because they know that the bankers get paid if there is a deal and they don't get paid if there isn't one. I became a kind of consigliere to a lot of CEOs on whether to do a deal or not do a deal. I was being paid a flat fee so it didn't make any difference to me whether the deal was done or not. And that is what led to directorships.
Although I was on a couple of small semiprivate boards through Lazard, I consider Alaska Interstate Co. my first public board experience. The company was a hodgepodge of public utility and oil and gas interests. They were in deep trouble, about to go bankrupt. They had no New York connections and they needed an investment banking firm to help them out. Someone introduced them to me and I introduced them to Kuhn Loeb as a banker, because the senior partner of Kuhn Loeb was on the board of the Chemical Bank, which I figured might be helpful. It worked out. We saved them from bank-ruptcy and they asked me to go on the board. They actually ended up making a lot of money because they had a huge gas discovery in Indonesia and the company ultimately was sold to Ultramar.
It was a wonderful experience because it ran the gamut. It was a distressed company that we saved, then we had internal squabbling when Roy Huffington, who had been the generator of the business in Indonesia and had made the gas discovery, went on the board and he and management began fighting with one another and he tried to take it over. We were one of the first companies to adopt the poison pill that Marty Lipton created. I had been a principal investment banking witness in the original case, Moran v. Household International, upholding the poison pill...