ABSTRACT
In the early 1960s, the established business community was aware of, but relatively unaffected by hostile takeovers. The goal of the leveraged buyout activities of the 1980s was not to build a better industrial base or strengthen the economy. At Drexel, members of the junk bond department felt a sense of allegiance that transcended Drexel's plea of guilty to six counts of fraud, Drexel's bankruptcy, and the indictment of Michael Milken and his colleagues from the bond floor. In the name of Maxxam, corporate raider Charles Hurwitz acquired Pacific Lumber through a leveraged buyout. Louis Lowen-Stein reported in Barron's that when Columbia Savings and Loan purchased junk bonds, Drexel would sometimes combine the debt offering with an equity kicker. Barlett and Steele found that during the 1980s, nearly two thousand businesses used their pension funds for purposes other than the benefit of employees and their spouses.
