Preditorettes

In the mid-1980s, the heyday of the explosion in the issuance of "junk bonds," junk bond king Michael Milken and his Drexel Burnham colleagues held an annual conference for their customers in Beverly Hills, California. Since the purpose of much of that junk bond issuance was for hostile takeovers, the conference had come to be known as "the predators' ball": "On the second night of the Predators' Ball, while the lower ranking troops (money managers and executives of medium sized companies) were sent in buses to a show at a movie lot, some one hundred of the real players -- takeover entrepreneurs, major inves­tors, arbitrageurs, deal lawyers -- attended a cocktail party at a bun­galow at the Beverly Hills Hotel. From there they were chauffeured to dinner in a private room at the swank Chasen's in Beverly Hills.

"In addition to Drexel's female employees, there were a number of extremely attractive young women at this dinner -- so good-looking, in fact, that one takeover lawyer, George Katz of New York's Wachtell, Upton, Rosen and Katz, renowned for his naiveté, re­marked to a companion, 'I've got to hand it to these guys -- I've never seen so many beautiful wives!' "In fact few if any wives attended this dinner. An assessment closer to the mark was made by arbitrageur Martin Weinstein, who, noting that Irwin Jacobs had been deep in conversation for hours with one of these women at the far end of the room, commented to a friend, 'Tell Irwin he doesn't have to work so hard. She's already paid for.'                                         "According to Julian Schroeder, a former corporate finance part­ner at Drexel, the 'girls' have been a staple of the conference since the early years. They were seen as necessary bait for clients in the days when Drexel was 'laughed at' by those whom he and his colleagues called for business. These women were recruited chiefly by Donald Engel, a close associate of Milken and a longtime man­aging director of Drexel. In 1981 Engel resigned and became a 'con­sultant' to the firm, but he continued to carry out his traditional function vis-à-vis the 'girls.' "Fred Sullivan, chairman of Kidde, Inc., who has attended the conferences for years, confirmed that the women were paid by Drexel -- 'varying amounts, depending on how pretty they are, and what they'll do,' said Sullivan, with a chuckle. 'Don [Engel] always says to me, "How could I get all these guys to come, if I didn't have the girls?" '