L.F. Rothschild

L.F. Rothschild was a New York-based merchant and investment banking firm established in 1899 by Louis F. Rothschild, who was not related to the European Rothschild banking family. The firm began operations after Rothschild and partner Leonard Hockstader took over the offices and business of Albert Loeb & Co. at 32 Broadway in Manhattan. Its early and enduring specialization was the sale and trading of fixed-income securities, supplemented by arbitrage, retail brokerage, and wealth-management activities. The business expanded through a 1977 combination with C.E. Unterberg, Towbin. After the merger it traded under the name L.F. Rothschild, Unterberg, Towbin and was primarily led by Thomas I. Unterberg and A. Robert Towbin. The combined firm moved to 55 Water Street in New York, where it leased the 45th and 46th floors. Its merchant-banking activities and willingness to finance emerging technology companies gave it a distinctive position among mid-sized Wall Street firms. During the early 1980s, L.F. Rothschild, Unterberg, Towbin became especially prominent in initial public offerings. It reportedly surpassed several larger and more established investment banks in the number and visibility of its IPO underwriting engagements. Companies associated with its underwriting activities included Intel, Cray Research, and biotechnology company Cetus Corporation. The firm's business therefore connected conventional securities trading with venture-oriented merchant banking and public-market financing for high-growth companies. The firm encountered strategic and management difficulties in the middle of the decade. In 1986, approximately a decade after the merger, Thomas I. Unterberg and A. Robert Towbin left to join Shearson Lehman. Accounts of the departure link it to disagreements over a proposed expansion of the firm's bond sales and trading operations, as well as negotiations concerning outside capital and management control. Their exit removed two of the executives most closely associated with the post-1977 organization. L.F. Rothschild retained substantial exposure to stock trading when markets crashed in October 1987. The resulting losses severely weakened the firm. In February 1988, it was acquired by Kansas-based Franklin Savings Association, but the transaction and additional capital were insufficient to restore the business. L. F. Rothschild Holdings Inc., the firm's holding company, filed for Chapter 11 bankruptcy protection in July 1989. By the end of that year, employment had fallen from a peak of approximately 2,200 people to about 45. The firm is consequently remembered as a failed Wall Street institution whose rise reflected the expansion of technology IPOs and whose collapse demonstrated the risks of leveraged securities-market exposure.

L.F. Rothschild was founded in 1899 in New York City by Louis F. Rothschild, together with Leonard Hockstader. Despite its name, the firm had no family connection to the better-known European Rothschild banking dynasty. The founders took over the offices and business of Albert Loeb & Co. at 32 Broadway, establishing a securities business whose core activity was fixed-income sales and trading. Arbitrage, retail brokerage, and wealth management later complemented that foundation. The firm entered a new phase in 1977 when it merged with C.E. Unterberg, Towbin. The resulting organization became known as L.F. Rothschild, Unterberg, Towbin and was led principally by Thomas I. Unterberg and A. Robert Towbin. On March 26, 1977, it moved to 55 Water Street, occupying leased space on the building's 45th and 46th floors. The expanded firm pursued merchant banking investments and became particularly associated with high-technology businesses. Its most visible growth came during the early 1980s, when the firm developed a strong position in initial public offerings. It became one of the leading IPO underwriters of the period and, according to the historical account, overtook several established investment banks in this area. Its underwriting relationships included Intel, Cray Research, and Cetus Corporation. This activity positioned L.F. Rothschild between traditional Wall Street securities distribution and the newer financing requirements of technology and biotechnology companies. The firm's strategy became contentious later in the decade. Unterberg and Towbin departed in 1986 to join Shearson Lehman. Their departure was associated with disagreements about expanding bond sales and trading operations. Negotiations involving potential outside firms, capital investment, and the future management structure reportedly intensified tensions among senior managers. The loss of the two executives weakened the continuity of the post-merger leadership model. L.F. Rothschild was then exposed to the market turmoil of 1987. Heavy losses connected to stock-market trading led to the firm's collapse. Franklin Savings Association acquired it in February 1988, but the infusion of new capital could not restore the holding company to viability. L. F. Rothschild Holdings Inc. filed for Chapter 11 bankruptcy protection in July 1989. By the end of that year, the organization had reduced its workforce from a peak of about 2,200 employees to approximately 45. The firm's story ended as a major Wall Street failure, while several former associates went on to establish or lead other financial businesses.

• 1989

  Chapter 11 bankruptcy filing

  [1]L.F. Rothschilden.wikipedia.org

  L. F. Rothschild Holdings Inc. filed for Chapter 11 protection in July.

• 1988

  Acquisition by Franklin Savings Association

  [1]L.F. Rothschilden.wikipedia.org

  Franklin Savings Association acquired the firm in February, but the transaction did not prevent the eventual bankruptcy of the holding company.

• 1987

  Collapse after the stock-market crash

  [1]L.F. Rothschilden.wikipedia.org

  Heavy losses associated with the 1987 market crash placed the firm in severe financial distress.

• 1986

  Departure of Unterberg and Towbin

  [1]L.F. Rothschilden.wikipedia.org

  Thomas I. Unterberg and A. Robert Towbin left for Shearson Lehman after disagreements surrounding strategy, capital, and management.

• 1980

  Rise as a leading IPO underwriter

  [1]L.F. Rothschilden.wikipedia.org

  The firm became a prominent underwriter of technology and biotechnology initial public offerings, including offerings associated with Intel, Cray Research, and Cetus Corporation.

• 1977

  Merger with C.E. Unterberg, Towbin

  [1]L.F. Rothschilden.wikipedia.org

  The merger created L.F. Rothschild, Unterberg, Towbin and brought Thomas I. Unterberg and A. Robert Towbin into principal leadership roles.

• 1977

  Move to 55 Water Street

  [1]L.F. Rothschilden.wikipedia.org

  The firm moved into leased space on the 45th and 46th floors of 55 Water Street in New York.

• 1899

  Firm founded in New York

  [1]L.F. Rothschilden.wikipedia.org

  Louis F. Rothschild and Leonard Hockstader established the firm after taking over the offices and business of Albert Loeb & Co. at 32 Broadway.

A New York merchant and investment bank combining traditional fixed-income markets and brokerage with merchant banking and public-market financing for emerging technology and biotechnology companies.

• Sales and trading · 1899

  Fixed-income securities

  Fixed-income sales and trading formed the firm's original core business. L.F. Rothschild distributed and traded debt securities for institutional and other market participants, later considering a significant expansion of this activity as part of its broader strategy.

• Investment banking

  Initial public offerings

  During the early 1980s, L.F. Rothschild became a prominent IPO underwriter, particularly for high-growth technology and biotechnology companies. Companies associated with its underwriting activities included Intel, Cray Research, and Cetus Corporation.

• Merchant banking

  Merchant banking investments

  The firm invested in and financed businesses, with a notable emphasis on high-technology companies. Merchant banking gave it a direct investment dimension beyond securities distribution and brokerage.

• Brokerage and advisory services

  Brokerage and wealth management

  Retail brokerage and wealth management complemented the firm's institutional securities activities, providing services to individual and private clients in addition to its corporate and market businesses.

• 1988

  Acquisition by Franklin Savings AssociationM&A

  Background

  Heavy losses during the 1987 stock-market crash left L.F. Rothschild in need of new capital and institutional support.

  Action taken

  Franklin Savings Association acquired the firm in February 1988.

  Aftermath

  The acquisition and added capital did not prevent the holding company from filing for Chapter 11 bankruptcy protection in 1989.

  Source

• 1986

  Debate over expanding bond operationsStrategy

  Background

  Senior leaders disagreed over plans to expand the firm's bond sales and trading business and over related discussions involving outside capital and management control.

  Action taken

  Thomas I. Unterberg and A. Robert Towbin left the firm and joined Shearson Lehman.

  Aftermath

  The departure removed the principal leaders associated with the 1977 merger and preceded the firm's eventual collapse after the 1987 market crash.

  Source

1. 1L.F. Rothschilden.wikipedia.org