Bennett S. LeBow

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Bennett S. LeBow
Born 1937 (age 78–79)
Residence Philadelphia, Pennsylvania
Nationality United States
Education B.S. Drexel University
Occupation Businessman
Known for Chairman of the Board of Vector Group
Spouse(s) Jacqueline Finkelstein LeBow
Children two daughters
Parent(s) Suara and Martin LeBow

Bennett S. LeBow is an American businessman and philanthropist. He is the current Chairman of the Board of Vector Group (NYSEVGR)[1]

Education and career[edit]

LeBow was born to a Jewish family,[2] the son of Suara and Martin LeBow.[3] His father was a life insurance salesman and his mother a teacher.[4][5] He graduated from West Philadelphia High School[5] and in 1960, earned a degree in electrical engineering from Drexel University.[5] LeBow then went on to graduate school at Princeton University. Before completing his degree, LeBow left Princeton and joined the army where he installed early data systems at the Pentagon.[5] LeBow's first foray into business occurred in the 1960s when he started a computer company to continue his Pentagon project. LeBow eventually sold the business in 1971 for a profit and became a full-time investor.[5] In 1980 he founded the investment holding company Brooke Group Ltd.[6] LeBow went on to purchase many companies including: Western Union, Information Displays, MAI Basic Four, Liggett Group, Brigham's Ice Cream,[5][7] and the trading card company, SkyBox International (which he sold to Marvel).[8][9] In 2000, Brooke Group Ltd. was renamed Vector Group Ltd.[6]

Cigarettes and litigation[edit]

In 1986, he purchased the 5th largest cigarette manufacturer in the United States,[6] the Liggett Group for $140 million.[2] In 1993, Lebow stated under sworn testimony that since cigarettes are a legal product and people choose to use them, whether or not that they cause cancer is irrelevant.[10] In 1996, while under his leadership, Liggett Group broke ranks with the rest of the US tobacco industry, including Philip Morris, Brown and Williamson, RJR Nabisco, Loews and Lorillard, when he announced that Liggett would settle the Medicaid tobacco suits brought by forty state attorneys general.[11] Liggett had previously been accused of being illegally influenced by Philip Morris which allegedly paid some of Liggett's legal bills in order to buy its cooperation in anti-tobacco lawsuits.[12] LeBow stated that the reason for the settlement was to obtain immunity for Liggett from future liabilities[4] and to prevent a future bankruptcy.[13] The settlement entailed that Liggett agree to pay $1 million in damages;[2] publicly announce that smoking is addictive and causes cancer; turn over long-secret tobacco industry documents; disclose ingredients in its cigarettes; and testify against the industry. Liggett was the first cigarette company to voluntarily put the label "Nicotine is Addictive" on their product.[13]

LeBow's actions were pivotal to the government in their signing of the Master Settlement Agreement. In addition to this, LeBow was honored with a proclamation by Florida Governor Lawton Chiles for his "invaluable assistance" in helping Florida achieve its historic $11.3 billion settlement with the tobacco industry.[14] Following this presentation, Lebow and Mr. Chiles addressed a group of students, who "saved their toughest questions for Liggett Group chief Bennett Lebow of Miami". One student asked, "If you want to be a watchdog of the industry, why not get out altogether and stop making cigarettes?" to which he responded that if he did, others would continue.[15] LeBow also developed, through Vector Tobacco Inc., the nicotine-free cigarette Quest (cigarette) which is a cigarette designed to help people quit smoking.[16] Also that year LeBow teamed up with corporate raider Carl Icahn to make a bid for RJR Nabisco. In response to this proposed spin-off of Nabisco from RJR Reynolds, tobacco industry analyst Ellen Barabas stated that "I think there are people who would support a spin-off of Nabisco, but not by Lebow. One of the prime factors was Lebows dubious reputation as a manager. In 1994 his shareholders sued him, claiming he had taken millions of dollars in improper loans; Lebow settled out of court." [17] According to court documents, Liggett, while under LeBow's leadership, "engage(d) in marketing tactics that appeal to youths, such as couponing, sampling, and “buy one get one free” offers for its cigarettes, and advertise(d) in magazines with substantial youth readership."[18]

Notable acquisitions[edit]

n 1987, Liggett bought a majority stake in Western Union which had a negative net worth of $200 million. The company, then renamed New Valley LLC, eventually filed for bankruptcy but was able to pay its bondholders in full via asset sales. Liggett later sold its remaining interest in Western Union Financial Services Inc for $1.2 billion earning it a $300 million profit.[19]

In May 2010, after a $25 million investment, he became a member of the Board of Directors at Borders Group Inc. and was immediately elected Chairman of the Board, replacing Mick McGuire, who resigned.[20] In June 2010, LeBow became CEO of Borders Group Inc.[21] In February 2011, Borders declared bankruptcy.[22][23]

LeBow is also Chairman of the Board of Vector Group, the holding company for Liggett Group, Vector Tobacco, New Valley LLC, and Douglas Elliman.

Philanthropy and political activity[edit]

LeBow is a large supporter of his alma mater, Drexel University. In 1998, Drexel's College of Business and Administration was named the Bennett S. LeBow College of Business in his honor after a contribution of $10 million to the university.[24] Further, he endowed the Bennett S. LeBow Engineering Center, a state-of-the-art facility that houses Drexel's College of Engineering. In November 2010, the 72-year-old West Philadelphia native contributed $45 million for the construction of a new facility for the LeBow College of Business — the 12th largest gift to any US business school, and the biggest ever to Drexel University.[25][26] In 2011, LeBow was named the nation's 23rd largest charitable donor by The Chronicle of Philanthropy for donating more than $49 million to charitable causes.[27]

In 2009, LeBow made a $10,000 campaign contribution to Manhattan District Attorney candidate Leslie Crocker Snyder, whose law firm - Kasowitz, Benson, Torres & Friedman - had represented the Liggett Group in smoking and health litigation since 1996.[28]

Criticism[edit]

LeBow has also been scrutinized a number of times for a variety of decisions and business dealings:

  • In 2005, LeBow resigned from the Dana-Farber Cancer Institute Board of Trustees shortly after his appointment over discussions about the propriety of associating with the owner of a company which sells products that are known to cause cancer.[29]
  • In 1993, Brooke Group Shareholder Frank Gyetvan sued LeBow on behalf of other company shareholders, claiming Brooke had improperly lent Lebow money for luxury personal items, such as a $21 million yacht. The suit was settled the following year, with LeBow repaying $16 million to Brooke's other shareholders and giving up his right to receive 6.25 million in preferred dividends .[30]
  • In 1989, LeBow was criticized for using $3 million to fly a planeload of friends to a London party for the launch of his 177-foot yacht. The trip came during the time LeBow controlled MAI Systems, an Irvine, Calif.-based computer network company, and Western Union. Both companies filed for Chapter 11 bankruptcy reorganization in 1993."[31]
  • In 1984, LeBow completed the sale of Information Displays which subsequently went bankrupt. The buyer sued LeBow and his partners for fraud and misrepresentation.[32]
  • In the past, LeBow's business associations have come into question. In the book "Red Mafiya: How the Russian Mob Has Invaded America", the author states: "Ukrainian mob boss Vadim Rabinovich attended a Clinton-Gore fund raiser at the Sheraton Bel Harbor Hotel in Miami. Rabinovich came as a guest of Bennet S. LeBow, the Chairman of Brooke Group Ltd, Parent of Liggett, a cigarette manufacturing company (LeBow refused to comment)."[33] According to a spokesman for LeBow, LeBow's Brooke Group and Rabinovich developed a business center and luxury hotel in Kiev.[34]

Personal life[edit]

LeBow was married to Geraldine Cosher[35] whom he met while they were students, he was at Drexel and she attended Temple.[citation needed] They had two daughters.[5][7] Geraldine died in 2011.[35] They were married for 52 years.[citation needed]

References[edit]

  1. ^ Vector Group Limited: "BOARD OF DIRECTORS" retrieved October 25, 2015
  2. ^ a b c Business Week Magazine: "Lebow Turns Over a New Leaf" May 06, 2001 | "LeBow, who is Jewish, even brought in a rabbi to say a prayer for the dead deal"
  3. ^ Summit Towers Condo Association Bulletin March 1992
  4. ^ a b New York Times: "An Entrepreneur's High-Stakes Move" By GLENN COLLINS March 21, 1997
  5. ^ a b c d e f g Philadelphia Inquirer: "Bennett S. LeBow, a longtime businessman, with a great love for Drexel, his alma mater" By Melissa Dribben November 16, 2010
  6. ^ a b c Britannica Online: "Bennett S. LeBow" retrieved October 25, 2015
  7. ^ a b New York Times: "TURNAROUND ARTIST: Bennett S. LeBow; Collecting Wall Street's Wallflowers" By BARNABY J. FEDER September 25, 1988
  8. ^ Los Angeles Times: "Other News" March 10, 1995
  9. ^ New York Times: "Liggett to Change Its Focus With Shift From Cigarettes" by ANTHONY RAMIREZ June 22, 1990
  10. ^ New York Times: "On Cigarettes, Health, and Lawyers" By MICHAEL JANOFSKY December 6, 1993 | citing the following deposition: Q. If I asked you, does smoking cause lung cancer... A. I don't know. Q. O.K., and you really don't care because you're selling a legal product? A. Correct.
  11. ^ Bloomberg: "Bennett Lebow: Cigarette (Industry) Break" May 10, 1998
  12. ^ "Tobacco Company Paid Competitors Legal Bills", New York Times, July 22, 1997.
  13. ^ a b Inside the Tobacco Deal: Bennet LeBow Profile PBS Frontline
  14. ^ Business Wire: "Liggett's Bennett LeBow Honored by Florida Governor Lawton Chiles and Attorney General Robert Butterworth" October 21, 1997
  15. ^ Sun-Sentinel: "A Captive Young Audience; Students Screen Anti-Smoking Ads Aimed At Youths" October 22, 1997.
  16. ^ Davis, Joshua. "Come to LeBow Country" Wired, February 2003
  17. ^ "Populist Hero or Bottom Feeder?", Time Magazine, March 31, 1997.
  18. ^ Deposition of Steven Shipe, United States v. Philip Morris, May 21, 2002, 86:22-87:13.
  19. ^ Baltimore Sun: 'Bennett LeBow, flashy financier, 'likes to be in control' RTC Setting the agenda for tobacco industry" March 24, 1996
  20. ^ Ann Arbor News: "Tobacco executive, investor becomes chairman of Borders Group Inc. after $25 million deal" By Nathan Bomey May 21, 2010
  21. ^ Ann Arbor News: "Tobacco executive Bennett LeBow takes control of Borders Group" By Nathan Bomey June 3, 2010
  22. ^ Wall Street Journal: "Bookseller Borders Begins a New Chapter...11" By JOSEPH CHECKLER And JEFFREY A. TRACHTENBERG February 17, 2011
  23. ^ Wall Street Journal: "Borders Bankruptcy: Blow to Bill Ackman, Bennett LeBow" by SHIRA OVIDE February 16, 2011
  24. ^ "Drexel Receives $10 Million Gift from Alumnus Bennett S. LeBow". Drexel University. 1999. Retrieved 2007-10-29. 
  25. ^ "Drexel to receive $45 million gift for new center for business school". The Philadelphia Inquirer. 2010. Retrieved 2010-11-26. 
  26. ^ Drexel University Alumni Magazine: "A new gift from Bennett S. LeBow ’60, Hon. ’98 - Drexel’s leading alumni benefactor adds to his legacy" Fall 2004
  27. ^ "No. 23: Bennett S. LeBow". The Chronicle of Philanthropy. 2011. Retrieved 2011-02-27. 
  28. ^ Leslie Crocker Snyder Accepts Tobacco Executive's Money, Daily News, August 25, 2009.
  29. ^ "Er, Never Mind", New York Times, March 13, 2005.
  30. ^ Border's New Chairman: Bad For Business? Sarah Weinman, Daily Finance, September 23, 2010.
  31. ^ Florida's LeBow Has Tobacco In A Huff", Palm Beach Post, April 14, 1996.
  32. ^ "Turnaround Artist: Bennett S. LeBow; Collecting Wall Street's Wallflowers", New York Times, September 25, 1988
  33. ^ "Red Mafiya: How the Russian Mob Has Invaded America", Robert Friedman, May 2000, pages 268 - 269.
  34. ^ New York Times: "A Cosmetics Heir's Joint Venture Is Tainted by Ukrainian's Past" by Douglas Frantz and Raymond Bonner April 5, 1997
  35. ^ a b Drexel University news: "College Mourns Death of Gerri LeBow" August 3, 2011

External links[edit]