Barbarians at the Gate

Friends thought Cohen worked very hard to learn how to relax

Johnson, who carried that idea to every business he ever ran, boiled it down into a personal philosophy called “shit stirring”: a love for constant restructuring and reorganizing.

Of particular interest to Johnson were the many uses the bidders had found for the strain of junk bonds known as pay-in-kind securities, or PIK. The management group’s decision to “pile on the PIK” in place of cash still boggled his mind.

ten minutes past two, Hugel brought the board meeting back to order. “KKR just came in with its latest proposal,” Atkins announced: eighty dollars a share in cash, eighteen a share in preferred stock, and ten a share in debentures securities

“We must carefully consider our alternatives,” the firm announced Sunday evening, “in light of new information we will be receiving before reaching any judgment on what further steps, if any, we might take.”

Both included large amounts of PIK securities, and Atkins needed that “paper” valued for the presentation Sunday morning. It was a formality, but Atkins was determined to cover all the bases.

The firm of Forstmann Little & Co. has been built carefully, with the highest possible business standards and with total integrity. We have acted in all respects consistent with those standards throughout this transaction; we need no advice from you in this regard.

strongly urge you to very carefully consider your actions. Our business relationship, including our recent discussions, presumes a code of conduct which should not include either ethical lapses or breaches of contractual relations. Shearson and the executives of RJR Nabisco intend to honor the commitments they have made. We expect you will do so as well

Teaming up with a former investment banker named Brian Little, Forstmann Little & Co. opened its doors in 1978: three men, two salaries—Ted didn’t take one for years—and one secretary.

“I have a reputation, it’s all I have, and I don’t want to lose that reputation,” he said, and Forstmann embraced that principle as a creed.