BNE's |Saviors' Left with Dashed Dreams

Shortly after Bank of New England was sold, chief financial officer Kent Price traveled to Washington to meet with the government officials who oversaw the transaction.

The bank had survived for just six months after Mr. Price's arrival in May 1990. Talking to Harrison Young, the Federal Deposit Insurance Corp.'s top dealmaker, Mr. Price confessed: "I probably would want more upside potential next time."

Pounding the Pavement

That bit of understatement reflects the feelings of five other top executives recruited by BNE chairman Lawrence K. Fish and vetted by regulators.

Some left behind secure jobs, higher salaries, and longtime homes to serve under Mr. Fish, who took over troubled Bank of New England from Walter Connolly in March 1990.

But the bank collapsed just nine months later, and after its sale was announced in April, the six men found themselves pounding the pavement during a recession.

An informal poll shows that most thought the company had a 50% chance of survival when they took the job. Though they knew it was a gamble, their disappointment lingers. Almost all are still looking for work after beinc dismissed by the bank's new owner, Fleet/Norstar Financial Group Inc.

Soft Landing at BankAmerica

The exception is Mr. Price who begins work this week for BankAmerica Corp. as head of the international private bank.

Among the unemployed are two recruits brought in as president of the biggest bank subsidiaries: D. Bruce Wheeler, at the Bank of New England in Massachusetts, and William Moeller, at the Connecticut Bank and Trust Co.

John C. Martin, who left as senior technology post a Bank of Boston to head computer operations at the failing bank, and R.T. "Tim" McNamar, deputy secretary of the Treasury under President Reagan who became BNE vice chairman, are mailing out resumes.

Public relations man James Dorsey, who joined the bank after serving as press secretary to Rep. Barney Frank and Gov. Michael Dukakis of Massachusetts, is out of work and fielding calls for the group.

In between summer travels, the executives mull what possessed them to take on what Mr. McNamar calls "an intractably difficult assignment."

Dreams Faded

It certainly was not immediate financial gain. Last year, analysts suggested that Mr. Fish was luring top talent with big pay packages. But in fact, the officials' primary incentives were stock options.

Their dreams of becoming millionaires dissolved when the government seized the bank.

For severance, each will get a year's pay, a pact worked out by the FDIC and included in the bidding requirements for Fleet. Fleet's standard severance package is a maximum of 26 weeks, depending on length of service.

Puzzled by Motivation

Wilbur Ross, an investment banker from Rothschild & Co. in New York who sat opposite Mr. Price and Mr. McNamar during intense bondholder negotiations in the bank's final days, said he was puzzled by his adversaries' motivation.

"In order to get people into troubled companies, you have to throw a lot of money at them," Mr. Ross said. "I didn't see that at all here. There may have been some idealism involved. I call it an enigma."

One key to that enigma is Mr. Fish. He knew all the men except Mr. Moeller and managed to push the right buttons. A charismatic leader who has studied Zen Buddhism and meditated with a swami in India, Mr. Fish drew on more subtle persuasion than money. Like a president assembling a cabinet, he appealed to their sense of duty and adventure.

Kent Price

Kent Price gave up a highpaying job as chief financial officer at Barr Rosenberg Investment Management in Orinda, Calif., for the BNE rescue mission.

After the bank was seized in January, he took on the in-house duty of selling the bank, consulting with regulators and working with due-diligence teams from other institutions.

BankAmerica proved to be the most comprehensive, he said, immediately handing over a 50- to 60-page request for information. Some others, including several European banks and one Australian bank, were in and out of the bank quickly.

Mr. Price and his charges worked to avoid any sign of favoritism toward BankAmerica, whose chairman, Richard Rosenberg, is close to Mr. Fish. Yet much was at stake. Most of the top officers were certain BankAmerica would offer them a job if it took over the bank.

Diverse Talents

Those dreams faded when Fleet won the bidding. But BankAmerica clearly liked what it saw in Mr. Price, recently signing him up for a top job at its San Francisco headquarters.

Like many of Mr. Fish's recruits, Mr. Price is a man of striking intellect and diverse talents. Born and raised in Montana, he won a Rhodes Scholarship to study at Oxford University. He later learned management at Harvard Business School.

"The motto that Cecil Rhodes chose for his Rhodes Scholar program was |The best men for the world's fight.' I suppose that influenced me," Mr. Price said.

Mr. Fish, who declined to be interviewed for this article, leaned on that sense of duty, Mr. Price said. The two men met long ago on a squash court at a health club in Hong Kong, where Mr. Price was posted as a Citicorp executive and Mr. Fish was on assignment for the Bank of Boston. They maintained a friendship for 14 years, despite geographical distance.

Mr. Price, who is 47, said the year at BNE was filled with almost round-the-clock work and took the biggest toll on his family life. Every other weekend, he jetted to his home in San Francisco, where his wife was earning a doctorate in clinical psychology. The BankAmerica job has reunited them.

D. Bruce Wheeler

D. Bruce Wheeler packed it in as head of the banking division of First Nationwide Financial Corp., loaded up his family and belongings in San Francisco, and moved to a Boston suburb at Mr. Fish's behest.

Mr. Wheeler, who had worked for Mr. Fish at Bank of Boston Corp. in the 1980s, said he struggled with the offer. But after looking over BNE's books and engaging in frequent talks with his former boss, he relented.

The opportunity to be a bank president was a big draw.

"When I came on board, I thought there was a fifty-fifty chance" of the bank surviving, he recalled. "Those looked like good odds from San Francisco."

It was around Thanksgiving, when he got a credit report on the mounting problem loans, that he says he got a gut feeling "the bank wasn't going to make it."

After the bank was seized, Mr. Wheeler worked to keep the franchise from deteriorating, drumming up incentives to retain clients. The bank offered a small increase in interest on deposits to corporate clients who were a bit edgy - with FDIC approval, of course.

The day after the bank was sold, Fleet chairman J. Terrence Murray set up shop on the 36th floor of the State Street tower of Bank of New England. He called Mr. Wheeler in and told him he would be replaced.

Since then, the 45-year-old banker has been cooling down, taking a hiking trip in Scotland with his wife and son. On vacation, he thought long and hard about whether to leave banking. He has decided to stay.

Mr. Wheeler said he would prefer to remain in the area and has been interviewing with local financial institutions.

Jack Martin

"In a very large sense, we were unable to deliver," said Jack Martin, the technology officer. "But in a smaller, more personal sense, we were able to at least deliver a solid company, a leaner, stronger organization to Fleet. It could have been much worse."

Mr. Martin, who is 53, left the Bank of Boston to work for Mr. Fish, knowing he would probably never return because of the intense rivalry between the two institutions.

Like Mr. Wheeler, Mr. Martin saw an opportunity to advance at BNE. Michael Simmons, a BankAmerica technology expert, had recently taken the lead job at Bank of Boston, blocking Mr. Martin's path to the top.

Cut Expenses

At Bank of New England, Mr. Martin hit the ground running in April 1990, with a mandate to cut costs dramatically. He reduced annual operations expenses to $143 million from $193 million, in part by cutting staff to 2,600 from 4,200 in the operations unit. The grueling task, he said, may be the reason Fleet has announced plans to eliminate only 1,000 jobs in operations.

The company also save $8 million annually by selling off its mainframe computers to IBM Credit Corp. and leasing them back.

Mr. Martin said he recently launched an intensive job search. "Unlike some of the other former managers," he said, "Fleet actually kept me going full time until now."

Jim Dorsey

A columnist at a Boston newspaper described corporate communications expert James Dorsey as a "rat who swims from one sinking ship to another" when Mr. Fish hired him.

On his final day at Bank of New England, an assistant presented Mr. Dorsey with a cartoon she had drawn. It shows a rat paddling on a raft.

"I keep it with me always," he quipped.

A lanky man of 46, Mr. Dorsey spent eight years as press secretary for Gov. Dukakis, including the period of his presidential run. The hurly-burly of politics toughened his hide, making him well suited for the BNE job. During the bank's crisis days, he was a frequent figure on Boston television, trying to calm a nervous public.

Two Contracts

The communications man is markedly different from Mr. Fish's other lieutenants in one key way: He got a much more lucrative contract when joining Bank of New England. Mr. Dorsey, who declines to provide details of his pay package, said he met Mr. Fish on a trade mission to Japan. Mr. Fish, whose wife is Japanese, visits the Far East frequently.

Though he hasn't found work yet, Mr. Dorsey has landed two consulting contracts on crisis public relations. He said he plans to stay in the private sector and away from politics.

R.T. |Tim' McNamar

Tim McNamar is not shy. Asked recently if he would have accepted a job from Fleet's management, he replied, "Terry's is the only job I'd want," in reference to Fleet's chairman.

Mr. McNamar, 52, has made a career of short-term, high-profile assignments. He helped arrange the bailout of Continental Illinois Corp. and served a four-year stint in the Reagan administration as deputy secretary of the Treasury.

When Mr. Fish met him, he was a partner at his own merchant banking firm, Conover & McNamar, in Los Angeles. A mutual acquaintance introduced the two but warned the diehard Republican that Mr. Fish is a liberal Democrat.

Despite their political differences, Mr. Fish became his confidant. "He came to me and asked what I thought of his taking the [BNE] job," Mr. McNamar said. When Mr. Fish accepted the post, he named Mr. McNamar vice chairman. Mr. McNamar's primary duty, besides a term as investor relations officer, was to work with regulators.

The first thing he did was insist on a weekly breakfast with regulators. Federal Reserve Governor Joh LaWare hosted the coffee bashes in Washington. From these meetings, Mr. McNamar helped build bridges.

One of the job's attractions was Mr. Fish's participatory management style.

"It was a team effort, not a business environment where you had to watch your backside all the time," he recalled. "Neither Kent [Price] nor I wanted Larry's job."

Mr. McNamar said he has been taking the summer easy, talking to headhunters only twice. One prospect is a fellowship from an East Coast university, which he might use to write a book about his BNE experiences.

During his 10 months at Bank of New England, he gave up running to make Mr. Fish's morning meetings. It has "been hell getting it back," said Mr. McNamar, who's now doing roadwork in preparation for a September marathon in Victoria, British Columbia.

William Moeller

In retrospect, William Moeller went from the frying pan into the fire when he left troubled Southeast Banking Corp. of Miami to run BNE's Connecticut Bank and Trust.

In a recent interview, he said he did not foresee that Southeast would become mired in such serious troubles when he made the switch in July 1990. At the Miami company, he served as executive vice president. His responsibilities included commercial real estate, where problems began long before his reign and would prove to be disastrous after he fled.

Mr. Moeller, who is 48 and started his career as a commercial lender at Citicorp, is maintaining an office in Hartford, Conn. He has not yet found a job but plans to stay in the banking industry.

There's an echo of the past in his short reign at the Connecticut bank.

His grandfather, Frank Carl Moeller, stepped in as president of First National Bank of Fort Dodge, Iowa, when President Franklin Delano Roosevelt declared a bank holiday on March 6, 1933. The elder Moeller stayed at the bank for 50 years.

The grandson, who had only a one-year run in his mission, carries his grandfather's gold watch.

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