According to a report in The Wall Street Journal, the drama around Wall Street firm Lebenthal will soon be concluded.
The firm’s founders’ granddaughter Alexandra Lebenthal is reportedly ready to close, as early as this month, on a deal to sell the former municipal bond firm. InvestmentNews reports, “Lebenthal Holdings currently consists of a capital-markets unit that underwrites corporate bonds and an asset management unit. It sold the municipal bond business in 2014. While Ms. Lebenthal and her brother James contend the firm's businesses are stable, they admit the firm is troubled financially.”
Lebenthal said, "I am in the process of taking care of unpaid bills."
In 1925, the firm was founded as Lebenthal & Co. In the 1960s and 1970s, after a memorable television commercial was used by James Lebenthal, the late son if the founders and the father of Alexandra and James, to advertise the firm’s municipal bond business, the company had become a household name to many New Yorkers. In 2001, Advest bought the business from the family. Merrill Lynch then took over Advest. Then in 2007 for a $1,000, Alexandra Lebenthal bought back from Merrill the rights to her family name.
The Lebenthal family and company are now facing allegations that they owe millions of dollars in debts. The report in the Journal didn’t know if this deal would be enough to pay back all the creditors in full. According to the Journal’s sources, the deal wants to keep 44 employees in addition to the firm’s name.
InvestmentNews reports, “In 2013, the firm launched Lebenthal Wealth Advisors and brought in Jeffrey Lane, former chief executive at Bear Stearns Asset Management and Neuberger Berman Inc.; Frank Campanale, former head of Smith Barney's consulting group; and Andrew Grillo, a former executive at Smith Barney. The firm closed that unit last summer.”
By Charles Bernstein