Book dossier

Too big to fail

by Walter Stewart

In 1991, in a list entitled "The Billionaires," Fortune magazine ranked the Reichmann brothers of Toronto as Number 4 on the planet, with a wealth estimated at $12.8 billion U.S. The family name was synonymous with "rich," and they and their flagship company, Olympia & York, could do no wrong. They were not only the pride of Toronto, where their fine buildings could be seen everywhere, they were the largest private landlords in Manhattan, owning the World Financial Center and numerous other prestige buildings. They were also substantial developers in Springfield, Hartford, Boston, Chicago, Dallas, Portland, Orlando, Los Angeles, and London, and were about to embark on projects - in Tokyo, San Francisco, and Moscow. Their interest in various major industries was widespread. And yet, within a year, this entire picture had changed. Their assets were frozen and their shares of outside firms were sold or for sale. The whole edifice had crumbled, and was on the brink of bankruptcy. What went so drastically wrong, and how did it come apart so fast? And how, just over another year later, can the Reichmanns be alive and well and launching new projects around the world through their new company, Reichmann International? What, in fact, does it mean to be "too big to fail," and how does this affect the taxpayers? To answer these questions, and to consider other issues that have a wider bearing on the world than the fate of one family or one company, Walter Stewart has travelled to both London and New York, has done extensive research, and has interviewed a number of players in the O & Y debacle. Here he deals with many of the questions that have been asked frequently since the trouble began. How did the Reichmanns get so entangled with Robert Campeau, the man who attempted to build a giant retail empire that included such household names as Bloomingdale's, Brooks Brothers, and Bonwit Teller? How did they get more and more money from the banks, even after their position became precarious? Just how much public money went to O & Y's giant Canary Wharf project in London, and what was O & Y's relationship with the Thatcher government? The result is a fascinating and readable blow-by-blow account of the unravelling of a great corporation and of the rise and fall (and rise?) of a remarkable family.