Saul Steinberg (businessman)

Saul Phillip Steinberg (August 13, 1939 – December 7, 2012)[1] was an American businessman and financier. He became a millionaire before his 30th birthday and a billionaire before his 40th birthday.[2] He started a computer leasing company (Leasco), which he used in an audacious and successful takeover of the much larger Reliance Insurance Company in 1968. He was best known for his unsuccessful attempts to take over Chemical Bank in 1969 and Walt Disney Productions in 1984.[3][4]

This article is about the American financier. For the cartoonist, see Saul Steinberg.

Saul Steinberg
Historical photo of Saul Steinberg
Born
Saul Phillip Steinberg

(1939-08-13)August 13, 1939
Brooklyn, New York
DiedDecember 7, 2012(2012-12-07) (aged 73)
Manhattan, New York
NationalityUnited States
Alma materWharton School of the University of Pennsylvania
OccupationFounder of Leasco
CEO of Reliance Insurance Company
Spouse(s)
Gayfryd McNabb MacLean Johnson
​
​
(m. 1983; his death 2012)​

Laura Sconocchia Fisher
​
​
(m. 1974, divorced)​
(divorce date unknown)
Barbara Herzog
​
​
(m. 1957; div. 1974)​
ChildrenJonathan Steinberg (son)
Laura Tisch Broumand (daughter)
Nicholas Steinberg (son)
Rayne Steinberg (son)
Julian Steinberg (son)
Holden Steinberg (daughter)
RelativesRobert Steinberg (brother)
Roni Sokoloff (sister)
Lynda Jurist (sister)
Maria Bartiromo (daughter in-law)

Background

Steinberg was born to a Jewish family[5] on August 13, 1939, and grew up in Brooklyn, New York the son of Julius and Anne Cohen Steinberg.[1] He had one brother, Robert Steinberg, and two sisters, Roni Sokoloff and Lynda Jurist.[6] Steinberg finished a degree from Wharton School of the University of Pennsylvania in Philadelphia. He was listed as a member of the class of 1959, although some accounts have said that he graduated in two years at age 18.

Business career

In 1961, at the age 22, Steinberg founded Leasco Data Processing Equipment Corporation, a computer leasing company that leased IBM computers. While at Wharton, Steinberg had written a paper about IBM Corp., and he had learned that IBM was charging premium prices to lease its computers. Steinberg discovered that he could offer computer leases that would undercut IBM's prices and still obtain bank financing for the entire purchase price of the computers by using the signed leases as collateral with lenders.[7] Leasco grew rapidly, and in 1965 went public.[8]

Leasco bid to acquire Reliance Insurance Company, a Philadelphia insurance company ten times the size of Leasco. Reliance had been in business 150 years, having been established in 1817 to provide fire insurance. It was managed conservatively. Insurance companies have much capital, which is just what computer leasing companies need. Steinberg offered the Reliance shareholders a combination of convertible subordinated debentures and common stock warrants (rather than cash).[9] Reliance management resisted but eventually capitulated, and Leasco was successful in assuming control of Reliance in 1968. Steinberg was 29 when he took over Reliance.

In 1969, Steinberg attempted to take over Chemical Bank, then one of the nation's largest financial institutions.[10] The attempt failed.

Steinberg became the CEO of Reliance, and he and his brother were the senior managers of Reliance for the next thirty years. Steinberg took on large amounts of debt during the junk bond era and grew, apparently by underpricing its insurance policies.[3] The company paid out dividends to the shareholders, including the Steinberg family members as major shareholders, and paid Saul Steinberg large sums in compensation.[3]

At Reliance, Steinberg hired dealmaker Henry Silverman, who would later become the CEO of HFS Inc. and later Cendant Corp. In 1986, while Silverman was at Reliance, he and Steinberg were involved with television executive, Joseph Wallach, in acquiring Spanish language television stations, and creating the Spanish-language media company, Telemundo.[11]

In 1995, Steinberg had a serious stroke. He was forced to step back from management of Reliance. The leverage, low pricing on insurance policies led Reliance to financial problems. Management attempted to sell the company. Reliance Group negotiated a transaction to be sold to Leucadia National in 2000 for stock and the assumption of debt.[12] However, this transaction fell apart in July, 2000.[13]

Reliance filed for bankruptcy in 2001 and entered into a long process of liquidation. Steinberg was forced to sell his extensive art collection along with his 17,000 square-foot, 34-room duplex apartment at 740 Park Avenue in Manhattan, which was bought for "slightly above or below $30 million" in 2000 by Stephen A. Schwarzman of the Blackstone Group.[14]

Involvement with Wharton

Steinberg was a major benefactor of the Wharton School at the University of Pennsylvania. He served as chairman of Wharton's Board of Overseers for over 15 years and continued as a member of the board until his death.[15] The Steinberg name is highly visible at Wharton, most notably attached to Steinberg-Dietrich Hall, which served as the main undergraduate building, containing classrooms, lounges, computer labs, and departmental offices.[16][17] The Steinberg Conference Center serves as home to the Executive Education Center and the Aresty Institute of Executive Education. Additionally, Steinberg endowed the Saul P. Steinberg Professor of Management chair.[18]

Family and personal life
  • Steinberg met his first wife, Barbara Herzog, in high school, and they would have three children before divorcing in 1974:[3]
  • Steinberg divorced his first wife after he met Italian American Laura Bordoni Sconocchia Fisher in 1974; Laura converted to Judaism prior to their marriage. They had a son, Julian, before divorcing.[3]
  • In 1983, Steinberg married Canadian-born, Gayfryd (McNabb MacLean Johnson) Steinberg, a twice divorced Louisiana businesswoman who once ran her own steel-pipe business.[25][26] Gayfryd also converted to Judaism prior to their marriage.[3] Steinberg adopted Gayfryd's son, Rayne, from a previous marriage and they also had a daughter, Holden together.[27] Gayfryd is a trustee of the New York Public Library.[3][28][29]

In 1989, Steinberg hosted an opulent 50th birthday party for himself, that included live models depicting his favorite Renaissance paintings.[30]

Steinberg's brother, Robert or "Bobby" worked as a senior executive at Reliance, helping Steinberg run the company for many years. In 1999, as Reliance encountered severe financial problems, Saul Steinberg fired his brother and the brothers became estranged from one another.[3] In 2000, Steinberg's mother, Anne Steinberg, sued Saul for $5 million that she says he borrowed from her in 1997 and promised to repay on December 1999. She also sued her son Robert for $1.5 million, a debt that also came due in December.[6]

In 2000 Steinberg sold his apartment at 740 Park Avenue in Manhattan to financier Stephen A. Schwarzman of The Blackstone Group for a reported $37 million.[31] The apartment had once belonged to John D. Rockefeller, Jr..

Steinberg died on December 7, 2012, at the age of 73, on the very same day as his mother, Anne Steinberg.[32][33]

Charitable Gifts

In 2000 Steinberg donated a large painting, The Death of Adonis (1614), by Peter Paul Rubens, to the Israel Museum in Jerusalem.[34]

References
  1. Collins, Margaret (December 10, 2012). "Saul Steinberg, Corporate Raider, Reliance Chief, Dies at 73". Bloomberg. Retrieved December 23, 2012. Note that this source, and the majority, spell his middle name Phillip, while others spell it Philip.
  2. The Fall of the House of Steinberg By Johanna Berkman, NY Mag
  3. Berkman, Johanna. "Fall of the House of Steinberg" New York magazine, June 19, 2000
  4. "SAUL P. STEINBERG". The New York Times. Retrieved December 9, 2012.
  5. Silbiger, Steve The Jewish Phenomenon: Seven Keys to the Enduring Wealth of a People p. 79
  6. Eaton, Leslie. "Sorry, Mother, But Get in Line For Your Money; Suit Says Steinberg Sons Failed to Repay Loans" New York Times, September 9, 2000
  7. Welles, Chris "Fast Money" New York Magazine, May 12, 1969, "The Fast Money Explosion", available at Google Books
  8. Funding Universe.com Reliance Group history
  9. "Insurers Shares Sought by Leasco" NY Times, June 24, 1968
  10. Forbes Face: Saul Steinberg June 18, 2001, Forbes magazine
  11. Museum of Television article about Telemundo
  12. NY Times article May 27, 2000, A Struggling Reliance Group Is Sold and a Corporate Raider Retires
  13. Insurance Journal article
  14. Martin, Douglas (December 10, 2012). "Saul P. Steinberg, Bold Corporate Raider, Dies at 73". The New York Times.
  15. Wharton website list of Board of Overseers
  16. Wharton website - campus information
  17. Forbes article His Own Man (Jono Steinberg) Dec. 13, 2007
  18. Wharton faculty page Archived December 13, 2009, at the Wayback Machine
  19. WEDDINGS" "Jonathan Steinberg, Maria Bartiromo" June 13, 1999
  20. Wisdom Tree website
  21. "Maria Bartiromo Reportedly Leaving CNBC for Fox Business Network". mediaite.com. November 18, 2013. Retrieved January 14, 2016.
  22. "Jonathan Tisch, Executive, to Marry Laura Steinberg". New York Times, May 3, 1987
  23. New York Times: "Candlelight Wedding Joins 2 Billionaire Families" By GEORGIA DULLEA April 19, 1988
  24. "Weddings; Laura Tisch, Stafford Broumand" New York Times, October 14, 2001
  25. People article"Marriage with a Midas Touch", May 7, 1990
  26. The Fortune Hunters: Dazzling Women and the Men They Married, By Charlotte Hays, pg 37; available on Google Books
  27. "Social Diary Archives | David Patrick Columbia's Social Diary Column". New York Social Diary. Retrieved June 5, 2020.
  28. NY Public Library website 2008 Annual Report, pg 58
  29. People: "Marriage with a Midas Touch" May 7, 1990
  30. Bloomberg Business Week, December 9, 2010, "A Century of Executive Excess"
  31. A Blackstone Executive's Other Big Acquisition New York Times, October 8, 2007
  32. Saul Steinberg, early "corporate raider", dies at 73
  33. "Anne Steinberg Obituary". New York Times/Legacy.com. December 9, 2012. Retrieved December 23, 2012.
  34. "Rubens's Classical Spectacle, Rated R", by Ellen Gamerman, Wall Street Journal, January 7–8, 2012, pg C14

Further reading
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