It was supposed to have been the Lebenthal family’s grand second chapter.

In 2007, Alexandra Lebenthal and her father, legendary municipal bond salesman James Lebenthal, paid a token $1,000 to get the rights to their name back from Merrill Lynch. The two had visions of reviving the Lebenthal business as a full-service, wealth-management shop for longtime clients.

One year later, with the financial crisis looming, their firm had run through its capital. Alexandra was paying employees’ salaries from her own checking account. That year she approached Jimmy Cayne, a longtime family friend and then-chairman of Bear Stearns Cos., and told him she was struggling. Cayne loaned her $1 million of his own money -- less than two weeks before his company collapsed.

The two eventually worked out a payment plan, and Lebenthal began sending him checks. But things changed about a year ago, according to a lawsuit Cayne filed in New York state court last month alleging that Lebenthal hasn’t made a payment on the loan since the end of 2015 and still owes him at least $438,000. Late last year, the suit claims, Lebenthal’s lawyer told Cayne the company was pursuing a sale and offered to resolve the loan for slightly more than $18,000.

Lebenthal declined to comment beyond saying in an emailed statement that she was looking forward to resolving the dispute. Her company operates successful asset-management and capital-markets businesses, she said, and is “working to finalize a transaction, which we hope to announce in the near future.” Cayne and his lawyers didn’t respond to messages.

Bond Brand

How did a prominent New York socialite and heir to a storied bond brand wind up in a legal battle with an old friend over what, for him at least, is a relatively small amount of money? The answer has everything to do with Alexandra Lebenthal’s struggle to keep her business afloat, especially after her father died in 2014. Since getting the Lebenthal name back, she has opened and shuttered a municipal bond business. In August, she closed a three-year-old wealth-advisory unit that never gained traction.

“The broker model they were running with, which had been very successful for Lebenthal over many years, just fell behind the new, emerging models” for asset management, said Jim Colby, a senior strategist who manages about $4.6 billion of VanEck municipal exchange-traded funds in New York.

The Lebenthal story began almost a century ago, in 1925, when Alexandra’s grandparents, Louis and Sayra, founded Lebenthal & Co. as an odd-lot clearinghouse. Its goal was to make municipal bonds, primarily owned by institutional and wealthy investors at the time, available to individual holders.

James Lebenthal joined the family business in 1967 after a stint on the West Coast as a filmmaker, journalist and copywriter. Through dozens of whimsical ads featuring him popping out of sewers or tossing garbage into incinerators, and with taglines like “bonds are my babies,” he  popularized municipal bonds, at least among New Yorkers.

First « 1 2 3 4 » Next