Interesting Lives: Victor Posner

Victor Posner, 83, Master of Hostile Takeover

By Kenneth N. Gilpin

Victor Posner, a corporate raider whose exploits
over three decades earned him a place in the rogue’s gallery of American
business, died on Monday at the Miami Heart Institute.  He was 83 and lived in Miami Beach.

The cause was pneumonia, according to
Milton Farrell, his friend and lawyer.

A master of the hostile takeover from the mid-1960’s
until the early 1990’s, Mr. Posner at one time or another controlled public
companies as diverse as the Arby’s restaurant chain, Royal Crown Cola and
Sharon Steel.   He mismanaged many of
these companies into bankruptcy but enriched himself as they foundered.  He was forced to sell others at a discount.

Even as shareholders suffered, Mr. Posner
was one of America’s highest paid executives for years, drawing millions of
dollars in annual salaries from the corporations he ran.  But by the late 1980’s, Mr. Posner was
facing mounting legal problems.

In 1987, he pleaded no contest to a charge of tax
evasion and was ordered to give $3 million to the homeless and serve meals in a
Miami shelter as part of 5,000 hours of community service.

A year later, the Securities and Exchange
Commission accused Mr. Posner and his son Steven of conspiring with Ivan F.
Boesky and Michael R. Milken to gain control of the Fischbach Corporation, an
electrical company in New York, in 1984.
In its civil complaint, the S.E.C. contended that with Mr. Milken’s
help, Mr. Posner and his son secretly arranged to “park” Fischbach stock, or
place it with Mr. Boesky, to conceal their intention to seize control of the

Mr. Boesky and Mr. Milken pleaded guilty to
felony charges stemming from the transaction.

In 1990, shareholders in the DWG
Corporation, a Detroit cigar company that Mr. Posner used as a vehicle to
acquire other companies, sued Mr. Posner and his son, contending they had
plundered DWG.

A federal judge installed three directors
to serve as watchdogs.   Two years later,
they reported that Mr. Posner drew $31 million in compensation from DWG over
five years, even as the company had difficulty finding the case to pay its
creditors and employees.

Mr. Posner settled the lawsuit by selling
half his shares in DWG to a partnership run by the financiers Nelson Peltz and
Peter May.  He agreed to sell the balance of his stake in 1999.

In December 1993, all of this history led Judge
Milton Pollack of Federal District Court in New York, in ruling on the
Fischbach case, to ban Mr. Posner and his son from any further involvement with
public companies.   The judge also
ordered them to give up control of their remaining public companies and to
repay about $4 million they had received from Fischbach.

In his ruling, Judge Pollack said Mr. Posner was “contemptuous of the interests of public shareholders.”

James W. Michaels, the former editor of Forbes
magazine, said of Mr. Posner, “He was a low-quality, cynical, greedy man who
didn’t care about his own reputation.”

Still, Mr. Posner was an active and generous
philanthropist for causes and institutions in the Miami area.

The Victor Posner Center for Communicative Disorders
at the University of Miami Ear Institute and Posner Hall at Barry University
are named in his honor.   A founder of
the Mount Sinai Medical Center, he also supported the Jackson Memorial Foundation
and Miami Children’s Hospital.

In large measure, Mr. Posner was able to continue
his philanthropy even during his legal troubles because of big real estate
holdings he had amassed in Maryland and Florida.

The son of immigrants from Russia, Victor Posner
was born in Baltimore.   He dropped out
of school at 13 to work in a grocery store owned by his parents.

In Depression-era Baltimore, Mr. Posner
used his grocery store earnings to build low-cost housing, selling the homes
for less than the prevailing market prices but retaining the land beneath the

“He assembled a real estate empire at an
early age,” said Mr. Farrell, his lawyer.
“He built large numbers of housing units at a time, something no one
else had done at the time.   His
understanding of financial matters was unequaled.”

Mr. Posner said he was a millionaire by age
25.   In the 1994 article, The Wall
Street Journal said he continued to collect rent on more than 20,000 ground

Ira Elegant, a Miami lawyer who once worked
for Mr. Posner, told The Journal that the favorite motto of his former boss was
“I buy by the mile and sell by the inch.”

By the mid-1950’s Mr. Posner had begun
buying up property in Florida.   The
Security Management Corporation in Miami, the centerpiece of his private real
estate empire, owns large stretches of oceanfront property in the Miami area.

Although he had been in ill health for some time,
Mr. Posner “was very strong willed” up until his death, Mr. Farrell said.  “He was unconcerned with how he was viewed
by others,” he added.

Victor Posner is survived by a brother,
Morton Posner, and a sister, Beatrice Cohen, both of Baltimore; four children,
Steven and Gail Posner of Miami Beach; Tracy Posner Ward of Norco, Calif.;
Lance T. Posner of Henderson, Nev.; and seven grandchildren.