Frank Cahouet, who is credited with turning around Mellon Financial during a difficult period three decades ago, died on Tuesday at age 85.
Cahouet joined Mellon in 1987 as chairman and CEO, succeeding David Barnes. At the time, the Pittsburgh company was struggling with an excessive amount of emerging-market and real estate debt. Cahouet stripped out Mellon Bank’s bad assets and placed them in Grant Street National Bank, a shell corporation.
“Frank joined Mellon just after the bank had taken its first loss in 118 years,” said Gerald Hassell, the current chairman and CEO of its successor company, Bank of New York Mellon.
“A series of bad loans threatened its future,” Hassell said in a news release Thursday. “Frank immediately set about stabilizing, recapitalizing and revitalizing Mellon, which involved taking some difficult actions to get the company back on sound financial footing. His decisive actions saved Mellon.”
Cahouet also led Mellon’s acquisition of the mutual fund company Dreyfus in 1994. Cahouet remained CEO until 1998. The Bank of New York acquired Mellon in 2007, although it had first attempted to buy Mellon in 1998 while Cahouet was CEO.
It would not have made sense for Mellon to have merged with Bank of New York because of "a different concept of management style and a different concept of where we're going,” Cahouet said at the time.
Cahouet died after a long struggle with Parkinson’s disease. He is survived by his wife, Ann, four children and six grandchildren. Cahouet was a trustee emeritus of the University of Pittsburgh and Carnegie Mellon University.