Robert Denham, a lawyer who guided companies through crises, dies at 79
Robert E. Denham, a mergers-and-acquisitions lawyer who was known for parachuting into imperiled companies and splintered board rooms and steering the organizations out of trouble, died on Saturday at his home in Pasadena, Calif. He was 79.
His family said the cause was cancer.
Soft-spoken, erudite and strategic, Mr. Denham had a knack for being calm under pressure, listening before talking and not necessarily taking the lawyerly path to a resolution. Those traits led Warren E. Buffett to ask Mr. Denham to help him save the Wall Street firm Salomon Brothers in August 1991, when a bid-rigging scandal threatened to push it into insolvency.
Mr. Buffett, the bank’s biggest shareholder, had taken the unusual step of joining the bank as its interim chairperson for $1. He wanted to be honest with prosecutors and regulatory authorities, despite internal resistance, to save the bank whose traders had been accused of rigging auctions for Treasury securities. Mr. Buffett thought that if the government brought criminal charges against the bank, customers would withdraw their money and it would collapse. Buffett knew Mr. Denham, a lawyer at Munger, Tolles & Olson, a firm founded by Buffett’s longtime friend and business partner Charles T. Munger. Mr. Denham was living in Los Angeles at the time and had a full schedule of clients. He did not have much need to try to bail out a failing bank. “It was obvious to me that we needed an excellent lawyer from outside who would be available at a moment’s warning for what appeared to be an insurmountable issue,” Mr. Buffett stated in a telephone interview. “The last thing he needed was a call from someone in New York who was in trouble, but he didn’t hesitate.”
Mr. Denham moved to New York to help Mr. Buffett convince prosecutors to not pursue criminal charges against his bank. Instead, the two men were forthright with regulators and reached a $290 million settlement. Instead, the two men were forthright with regulators and reached a $290 million settlement.
“I’m not sure Salomon would have turned out the same way without Bob,” Mr. Buffett said.
After nine months, Mr. Buffett returned to Omaha, where his company, Berkshire Hathaway, is based, and Mr. Denham stayed on as chief executive and chairman of Salomon Inc. until 1998, after Travelers Group had bought the company for $9 billion in a sale he helped engineer.
Mr. Denham and Mr. Buffett’s approach to saving Salomon — apologizing to Congress, pushing out executives who had tried to hide the bid-rigging, slashing bonuses and introducing internal controls to prevent another occurrence — became a model of crisis intervention.
“When a good company hits a rock, the task of getting it off the rock is critical,” Mr. Denham told The Los Angeles Times in 1998. Success is linked to jobs, lives and shareholder wealth. It’s an energetic, high-pressure position where time is valuable. Denham returned to Los Angeles, where he had his law firm. He continued to represent Mr. Buffett. He became a highly sought-after member of boards. He was also a board director of the Natural Resources Defense Council and the Russell Sage Foundation. In 2006, he became the chairman of the John D. and Catherine T. MacArthur Foundation. The Times’s finances were further exacerbated by the crash of the Lehman Brothers banking company later that year. Rumors of a sale began to circulate. The crash of the Lehman Brothers banking company later that year only exacerbated The Times’s finances, and rumors of a sale swirled.
Arthur O. Sulzberger Jr., then the chairman of the Times Company and publisher of the newspaper, said Mr. Denham was chosen because he had understood the mission of The Times and had a variety of experiences in the business world that helped the board during that period.
“We went through some pretty tough times while he was on the board,” Mr. Sulzberger said in an interview, “and I’ve got to tell you, having him at the table — so committed, so focused, so friendly and engaging — it was unbelievable and critical, I think, to our success and making our way through some challenges.” He added: “He listened to people and he didn’t ever try to one-up people. This was one of his greatest strengths. When people were disagreeing with each other, he helped to acknowledge the differences yet bring people closer.”
Robert Edwin Denham was born on Aug. 27, 1945, in Dallas and raised in Abilene, Texas, about 200 miles to the west. He was the only child of Wilburn H. Denham, an insurance salesman, and Anna Maria (Hughes) Denham, a high school counselor.
He is survived by his wife, Carolyn Denham, who was president of Pacific Oaks College & Children’s School in Pasadena; two children, Jeff Denham and Laura Denham Evans; and four grandchildren.
Mr. Denham graduated with a magnacum laude in 1966 from the University of Texas, where he earned a bachelor’s in government. He earned a master’s in government at Harvard University in 1968, and then went to Harvard Law School where he served as editor of the Harvard Law Review. He graduated with a law degree in 1970, again receiving magnacum laude.
He then joined Munger, Tolles & Olson, Los Angeles, the same year. He worked on numerous acquisitions and advised clients on finance and corporate governance.
Mr. Denham represented Berkshire Hathaway on numerous deals including the $37.2 Billion purchase of Precision Castparts, its $28 Billion acquisition of H.J. Heinz Company, in partnership with 3G Capital Partners; and its $44 billion acquisition of Burlington Northern Santa Fe Corporation. Heinz Company; and its $44 billion acquisition of Burlington Northern Santa Fe Corporation.
He also advised the Power family when it sold J.D. Power and Associates, a data-analysis and consumer-insight company focused on the automotive industry, and Copley Press, when it sold its San Diego and Midwest newspaper operations.
His style, many colleagues said, was to be straightforward yet charming.
“He’s not a man of bombast; he’s a man of deliberation and determination,” Deryck Maughan, once the head of Salomon Brothers, told The Wall Street Journal in 1992. Deryck Maughan, former head of Salomon Brothers, told The Wall Street Journal in 1992 that Maughan was not a man of bombast but rather he was steadfast and deliberate.
