as “huskier and slightly better tailored, in remembers. “When you’re in a situation his habitual white shirt and black suit, and like that, you try to think who it is that you The school gave Marty a wearing bottle-thick glasses.” could turn to to be effective. I thought, If I As a defender of companies in hostile could get Ken to put the kind of enthusiasm life. He’s been one of the deals, Lipton sought to return power to maninto this that he puts into everything else leading corporate lawyers in agement by slowing the takeover process he does, it’d be perfect.” Langone said he and forcing bidders to negotiate directly wasn’t interested. America for half a century. with the board. His signature invention was “Ken, let me level with you,” Lipton recalls And without that piece the aforementioned poison pill, which he saying to Langone at the time. “I’m desperdeveloped between 1980 and 1982. The pill is ate. Will you at least come down to the Mediof paper from that little triggered when a shareholder—a potential cal Center and meet some of the people?” bidder for the company—acquires 20 perLangone visited the Medical Center— commuter law school, it cent of the shares. At that point, the other twice—and then Lipton paid him another might not have been. shareholders have the right to buy up more visit at his office. “He said to me,” rememshares at a discount. This in turn dilutes Evan Chesler bers Lipton, “‘I decided I’m going to do the bidder’s interest and raises the cost of this. And you know, Marty, I never put acquisition. It’s called a poison pill because time into something I can’t invest in.’” it makes the company temporarily “sick,” unattractive to the bidder. Langone handed Lipton a check for $100 million. When Lipton explained his idea during Burlington North“Why did I do that?” Langone asks. “Simple: Because Marty ern’s bid for El Paso, Fraidin figured a court would deem it illegal Lipton asked me to. If the tables were turned, he would have done because the poison pill, after all, required that a board exclude the the same for me.” bidder from the self-tender. Critics also argued that it interfered in Of course, this sounds too simple in the retelling, but as a transaction among shareholders and would be used by boards William Berkley, the insurance mogul who sits on the NYU board to entrench themselves in management. But in 1985, the Delaware with both men, explains: “You trust Marty for a couple reasons. Supreme Court upheld the poison pill as a valid takeover defense, First, he’s balanced. He says, ‘What does the other side need and sealing Lipton’s reputation as a brilliant corporate M&A strategist. what do we need, and how do we move forward?’ He’s not about pie in the sky. He’s about reality. Second, he’s got this strong emotional commitment to NYU. No one can debate that. He’s so committed because of his experiences at the Law School, which hat’s unique about Lipton’s stewardship of NYU were clearly just really extraordinary for him. Marty thinks of is not just the depth of his involvement—it’s not it as his family, something he’s indebted to. He believes it’s an unusual for successful alumni to become bene- absolutely integral part of his life.” factors and trustees of their alma maters—but In the past, Lipton has said that he never questions what he’s also that he has managed to put his dealmaking doing with his life, or how he chooses to spend his time. “You don’t prowess to work at so many decisive junctures for the university. have to plumb to the depths of my psyche,” he told the New York Two decades after he helped sell off the Mueller company, but- Observer in 2005. “There’s nothing there.” It’s not surprising, pertressing the financial security of the Law School and the Uni- haps, that someone who has worked so hard at the same tasks for versity, Lipton turned his attention to the problems of the NYU so long isn’t prone to much existential angst. But the epic course School of Medicine and Tisch Hospital, caused, he says, by the of Lipton’s career, split between his firm and his school, suggests growth of managed healthcare. a deep soulfulness that he probably would never admit to. In 1997, Lipton attempted a merger of Mount Sinai Hospital University President John Sexton, whose ascendant career at and the NYU Medical Center, which encompasses four hospitals NYU parallels Lipton’s—Sexton became dean of the Law School and the medical school. By this time, he had further ascended shortly after Lipton became chairman of the Law School board— the NYU ranks. In 1988, Lipton was elected to succeed Judge says the two men “consider each other brothers” who share an Weinfeld as chairman of the Law School board after Weinfeld “extraordinary friendship” that has spanned nearly 30 years. “It’s died. Then, when Larry Tisch retired as chair of the University fair to say there isn’t a single person who has entered Marty’s life, board in 1998, he recommended Lipton as his successor. “It’s not either in a personal or professional way, who hasn’t felt enhanced that I think I’m too old to continue as chair,” Tisch said at the by his presence. He is an extraordinary embodiment of the ideal of meeting, “it’s that I’m afraid Marty is getting too old to succeed care and caring.” Sexton also expresses appreciation for his and the me.” (Tisch passed away in 2003.) The proposed hospital merger, University’s partnership with Marty. “He’s one of the busiest people Lipton’s first major test as leader of NYU, was critical for the future in the world,” says Sexton, “and yet never has a call from me or anyof the medical school, but it soon became problematic. First, the one associated with NYU gone for more than an hour without an faculties of the medical schools of both organizations opposed answer. When he’s asked to do something, it’s done immediately.” the merger, and the plan was abandoned. Eventually the merger Over the decades, that commitment amounted to incalculable went through, but then the entities had to be de-merged, in 2001, and invaluable non-billable hours. But asked about his legacy, one when financing that had been promised by Mount Sinai fell apart. of the most famous corporate lawyers in America looks away and Lipton faced the possibility of an embarrassing failure. shrugs, a little embarrassed. “There’s nothing else more imporFor another NYU chair, the situation might have been over- tant in life,” he says, “than what one achieves by contributing to whelming. For Lipton, drawing on four decades of M&A experi- the welfare and the benefit of those who come after us.” ence, it was nothing new. When the hospital merger caved, he approached his friend Kenneth Langone about taking on the Dan Slater, a former litigator, is a freelance journalist and chairmanship of the Medical Center and working to resolve author of Love in the Time of Algorithms: What Technology its problems. “We were facing considerable difficulty,” Lipton Does to Meeting and Mating.
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Published on Sep 6, 2013