CHICAGO - It's 1990 all over again at Rodman & Renshaw Inc.
In January of that year, the Chicago-based firm's three-person public finance department left to join Hamilton Investments Inc. Now, nearly four years later, Rodman's entire Chicago staff of public finance professionals has scattered to four different firms. In fact, Rodman has only one public finance executive left in any of its offices.
On Monday, Lee McClurkin, an assistant vice president and the last public finance professional in Rodman's Chicago office, left to join Los Angeles-based Chilton & O'Connor Inc., according to Thomas Basehart, a senior vice president at Rodman.
Earlier this month, Jay Keller, an assistant vice president at Rodman, left to join Chicago Corp. Keller has assumed public finance responsibilities as a vice president at Chicago Corp., according to Walter Filkin, a senior vice president at Chicago Corp.
In March, Frank Paul, a senior vice president and head of Rodman's public finance department, resigned and then joined Clayton Brown & Associates Inc. in Chicago as a senior vice president. And Keith Weatherspoon, a first vice president of public finance at Rodman, left in July to become a vice president and manager of Reinoso & Co.'s Chicago office.
Rodman is also without a public finance presence in the Kansas City, Mo., office it opened in January 1992. Last month, John B. Wood resigned as vice president and joined Minneapolis-based Dain Bosworth Inc. as a vice president in the Kansas City office.
The only public finance professional left at Rodman is J. Bradford Crow, a senior vice president in Rodman's 10-month-old Los Angeles office, Basehart said yesterday.
Basehart said Rodman was able to rebuild the public finance department in 1990 when Paul joined the firm, and he expressed confidence the department can be rebuilt again.
The key to rebuilding this time, Basehart said, will be the involvement of a Mexican-based financial services company that on announced Nov. 1 its intention to acquire a majority stock interest in the publicly traded firm.
ABACO Casa de Bolsa, the broker subsidiary of ABACO Grupo Financiero of Monterrey, Mexico, is negotiating to acquire 51% of Rodman's outstanding common stock at $10.50 a share in cash. ABACO's due diligence review is scheduled to end Nov. 16, according to Norman Mains, president of Rodman.
"With this new association with ABACO, we should be able to go through the rebuilding process again," Basehart said. "There will certainly be more capital for us to work with."
According to a press release from ABACO and Rodman, ABACO has a net worth in excess of $650 million.
Mains said that public finance is a key business for Rodman, and that ABACO has a commitment to keeping Rodman in that business. To that end, Basehart said he is already interviewing candidates for the Chicago office.
Basehart said that whoever is hired to head the public finance department will be setting up the department from scratch by hiring two or three bankers.
Rodman is also looking to replace Wood in Kansas City, and may start a public finance office in New York City, Basehart said. The firm is trying to replace a number of municipal bond salesmen and saleswomen who recently left its Chicago and New York offices, he said.
John Towers, Lewis English, Carolyn Soumas, and Debbie Sperber joined LaSalle National Bank last month. Ron Tasso left Rodman in September to become a vice president at Wertheim Schroder & Co. in New York City.
The beleaguered firm has been in the news for months with reports of takeover rumors, infighting in the top ranks, and sexual harassment complaints. In August, Rodman was dropped as co-manager for an Illinois general obligation bond deal after state officials learned of the harassment complaints. A state official also cited the internal turmoil at Rodman as a reason for the expulsion.
Basehart said that being dropped from the Illinois deal hurt the firm and that it was trying to overcome the setback.
"We'll just go back and try to rebuild with some new people and show [issuers] we can distribute their bonds and provide a service to them," he said.
He described as "good news" the recent selection of the firm as a co-manager on a rotating basis for Illinois Housing Development Authority deals over the next two years.
"We're an Illinois-based firm that has employees that pay taxes and we should be included in these things," Basehart said.
So far, employee defections do not seem to have affected Rodman's public finance efforts. According to Securities Data Co., Rodman was the senior manager on 19 issues totaling $136 million so far this year, compared with nine issues totaling almost $39 million last year.
As a co-manager, Rodman has been involved in 91 issues totaling $2.2 billion this year, compared with 100 issues totaling $4 billion in 1992.
