Will a Trump Tower share the skyline with the Kremlin’s spires?
“We’re looking at building a super-luxury residential tower, which I think Moscow desperately wants and needs,” Donald Trump was quoted as saying in the Moscow Times on Wednesday.
Trump, in the Russian capital this week, said he picked Moscow because “it is really a city with a great future, great potential.”
It would be the first real-estate development project outside the United States for Trump, who owns several casinos in Atlantic City.
The force behind Trump’s visit is Ben LeBow, chairman of the board of the U.S.-based company Brooke Group Ltd., the Times reported. Brooke is the parent company of cigarette maker Liggett-Ducat, which is developing a Moscow office and wants Trump to build on the property.
March 24, 1996 — Bennett LeBow, flashy financier, ‘likes to be in control’, by Bloomberg Business News
MIAMI — Nobody tells Bennett LeBow what to do.
Starting in the morning, the 58-year-old renegade financier likes to cook his own breakfast so he can eat exactly what he wants. All day long, Mr. LeBow demands control, losing his cool when he’s stuck in traffic or provoking corporate chieftains with audacious takeover bids.
This month, the majority shareholder of Liggett Group, the smallest of the United States’ five major tobacco companies, struck again, breaking with the $50 billion-a-year tobacco industry by agreeing to settle a class-action lawsuit that claims the industry knowingly sells addictive nicotine products.
“Bennett LeBow sets the agenda, no matter what the issue,” said Stanley Witkow, vice president of MAI Systems Corp., an Irvine, Calif., computer company that Mr. LeBow controls. “This guy likes to be in control.”
The first-ever tobacco settlement could arm Mr. LeBow in his effort to gain control of No. 2 cigarette maker RJR Nabisco Holdings Corp. and force it to spin off its Nabisco food unit.
“He’s trying to do the best for himself, with morals aside,” said Stephen Yacktman of Yacktman Asset Management, an RJR shareholder.
Chiding Mr. LeBow as lacking in morals is hardly the harshest criticism levied against stocky, bearded Philadelphia native.
No surprise there: Two of his public companies MAI Systems and New Valley Corp. filed for bankruptcy. His Miami-based Brooke Group Ltd., Liggett’s parent, has reported losses for years and recently had to restructure much of its $400 million debt.
Angry Brooke shareholders repeatedly claimed that Mr. LeBow improperly helped himself to company assets, allegations that he denies.
He’s also been criticized for his ostentatious lifestyle that has included a yacht, jets, several pricey homes and elaborate entertaining.
The son of an insurance man and a schoolteacher, Mr. LeBow graduated from Drexel University with an engineering degree and started his own computer company in 1961. Six years later, he rescued his own company from failure through a merger and financial restructuring. In the ensuing two decades, he focused on troubled companies.
Mr. LeBow also prospered with the backing of since-fallen junk-bond king Michael Milken and Drexel Burnham Lambert, which provided junk-bond financing for a string of LeBow acquisitions.
Among his conquests: reported.
In 1987, a LeBow company bought a majority stake in Western Union Corp., then a grab bag of money-losing assets with a negative net worth of $200 million.
The company, renamed New Valley, ended up filing for bankruptcy, selling assets and repaying bondholders in full. The company sold its interest in Western Union Financial Services Inc. for $1.2 billion, leaving it with more than $300 million.
Mr. LeBow, who says he grew up poor, began to spend money as soon as he had it.
An avid scuba diver, he moved to south Florida in the late 1980s from New York, buying a home on tony Fisher Island.
In early 1989, according to numerous press reports, Mr. LeBow flew 150 friends on a chartered jet to London for a $3 million bash to celebrate the maiden voyage of his custom-built yacht, modeled after Queen Victoria’s private yacht.
The guests stayed at the posh Claridge hotel and were met at the port by a marching band in full regalia. Mr. LeBow doled out souvenirs, including gold coins with a likeness of the financier donning a Lord Nelson hat.
The spending blitz came as financial pressures mounted.
In November 1990, Mr. LeBow combined several unprofitable interests into Brooke Group, which was the renamed Liggett cigarette company acquired in a 1986 buyout. Within months, Mr. LeBow was drawing millions in salary and personal loans.
Securities and Exchange Commission filings show that in 1992 Mr. LeBow drew a $1.5 million salary from Brooke while the company reported a $6 million loss. He also received loans and lines of credit from Liggett and Brooke.
February 29, 1992 — Bullish On Russia: LBO strategist changes focus for the ’90s, by David Satterfield
Projects being planned
There are four or five projects on the drawing board, he says. Eduard Nakhamkin, a Russian expatriate who brought LeBow into the Soviet business world through the cigarette deal, is now a full-time consultant, shuttling between Brooke offices in New York, London, and Moscow.
“We’re so busy in Russia right now,” LeBow says, “And everybody knows there are no deals being done these days in the U.S. There’s nobody lending money, so why bother?”
LeBow says the overseas business could break even this year and generate a profit after that. The investment community is hoping that LeBow’s eternal optimism is on the mark this time.
Says Church: “LeBow’s an entrepreneur. He lives from one deal to the next. I’m assuming some of the money he raised went over to the Soviet ventures. I hope he starts getting paid pretty soon.”