Ted Weschler’s first job after college was at chemical maker W.R. Grace & Co. (GRA) In 2007, six years after the company filed for bankruptcy, his hedge fund held 15 percent of the shares. That’s when he called Joe Rice.
Rice, a South Carolina lawyer, represented workers who claimed asbestos products manufactured by Grace had caused cancer and other illnesses. The 158-year-old company, which once owned (GRA) shipping lines and restaurants, declared bankruptcy in 2001 under the weight of those lawsuits (GRA). Rice was at an impasse with the firm when Weschler suggested they meet.
Over a three-hour dinner at Charleston’s Oak Steakhouse, the men started a conversation about resolving the case in a manner that would be fair to workers and shareholders (GRA). Weschler picked up the check. His initiative paved the way for a settlement a year later that helped Grace’s stock climb 40-fold since the bankruptcy and an investing record that earned him a job at Warren Buffett’s Berkshire Hathaway Inc. (B)
“He understood the issues for my clients weren’t all dollars and cents,” Rice said. “He was a catalyst.”
That ability to find value in distressed companies and cut deals helped Weschler, 51, carve out a role at Omaha, Nebraska- based Berkshire that goes beyond the stock-picking job he was hired for. Since joining Buffett’s firm in January, he has made a bid for a bankrupt mortgage business, negotiated a transaction that pushed Berkshire deeper into newspaper publishing and consulted with the heads of the company’s operating units.
“Warren keeps describing him as an investment manager, but the reality is his skills are more comparable to those of Warren himself,” said Schroeder, who’s also a Bloomberg View columnist. “He has a background in broad capital management, including private equity, mergers and acquisitions, owning businesses and being directly involved in their management.”
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Rice, a South Carolina lawyer, represented workers who claimed asbestos products manufactured by Grace had caused cancer and other illnesses. The 158-year-old company, which once owned (GRA) shipping lines and restaurants, declared bankruptcy in 2001 under the weight of those lawsuits (GRA). Rice was at an impasse with the firm when Weschler suggested they meet.
Over a three-hour dinner at Charleston’s Oak Steakhouse, the men started a conversation about resolving the case in a manner that would be fair to workers and shareholders (GRA). Weschler picked up the check. His initiative paved the way for a settlement a year later that helped Grace’s stock climb 40-fold since the bankruptcy and an investing record that earned him a job at Warren Buffett’s Berkshire Hathaway Inc. (B)
“He understood the issues for my clients weren’t all dollars and cents,” Rice said. “He was a catalyst.”
That ability to find value in distressed companies and cut deals helped Weschler, 51, carve out a role at Omaha, Nebraska- based Berkshire that goes beyond the stock-picking job he was hired for. Since joining Buffett’s firm in January, he has made a bid for a bankrupt mortgage business, negotiated a transaction that pushed Berkshire deeper into newspaper publishing and consulted with the heads of the company’s operating units.
Expanding Role
Buffett said in July that Weschler and Todd Combs, Berkshire’s other investment manager, each probably would oversee a $4 billion portfolio (5CA), up from about $2.75 billion at the beginning of the year. While it’s too early to evaluate Weschler’s performance, his expanding role and experience show why he could one day be a candidate to run the company that Buffett, 82, built over four decades through stock picks and acquisitions, said Alice Schroeder, author of “The Snowball: Warren Buffett and the Business of Life.”“Warren keeps describing him as an investment manager, but the reality is his skills are more comparable to those of Warren himself,” said Schroeder, who’s also a Bloomberg View columnist. “He has a background in broad capital management, including private equity, mergers and acquisitions, owning businesses and being directly involved in their management.”
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