Robert E. Denham, a distinguished mergers-and-acquisitions lawyer known for his ability to navigate and resolve complex corporate crises, passed away at the age of 79 due to cancer, leaving behind a legacy marked by his strategic acumen and calm demeanor in high-pressure situations. Denham’s career was characterized by a series of high-stakes interventions in troubled companies, but perhaps most notably, he played a pivotal role in rescuing Salomon Brothers during a scandal that threatened the investment bank’s very existence.
In August 1991, the Wall Street firm found itself embroiled in a bid-rigging scandal that jeopardized its reputation and financial stability. At the helm of this crisis was Warren Buffett, the firm’s largest shareholder, who took the unprecedented step of stepping into the role of interim chairman for a symbolic $1 salary. Buffett’s commitment to transparency was unwavering; he believed that the best course of action was to be forthright with regulators and prosecutors, even if it meant facing severe penalties. He recognized that if criminal charges were filed, it could trigger a mass exodus of customers, leading to the bank’s collapse.
Buffett, well aware of Denham’s expertise and reputation, reached out to him for assistance. Denham was then with Munger, Tolles & Olson, a law firm established by Buffett’s longtime partner, Charles T. Munger. Despite having a busy practice in Los Angeles, Denham’s willingness to take on the challenge was immediate and resolute. “It was clear to me we needed an outstanding lawyer from the outside that would be available on a moment’s notice for what looked like an insurmountable problem,” Buffett remarked. This ability to respond swiftly and effectively to crises would be a hallmark of Denham’s career.
Upon moving to New York, Denham joined forces with Buffett to address the multifaceted legal issues facing Salomon Brothers. His approach was marked by a soft-spoken yet strategic demeanor, allowing him to navigate the treacherous waters of corporate law without alienating stakeholders. Together, they worked diligently to persuade federal prosecutors not to pursue criminal charges against the bank. Their efforts culminated in a $290 million settlement, a significant sum that underscored the severity of the allegations but ultimately allowed the firm to continue operating.
Denham’s legacy is not merely one of legal expertise but of a unique approach to problem-solving that emphasized listening over speaking and collaboration over confrontation. This method stands in stark contrast to the more adversarial tendencies often seen in corporate law. His ability to remain calm under pressure and to listen intently before responding enabled him to forge strong relationships with clients and colleagues alike.
The impact of Denham’s work extends beyond the confines of a single case. His interventions often served as a blueprint for how to handle corporate crises with integrity and transparency, principles that are increasingly relevant in today’s business environment where corporate scandals are more common and public trust is harder to earn. As organizations navigate the complexities of ethical governance and regulatory compliance, the lessons drawn from Denham’s career will continue to resonate.
Denham leaves behind a professional legacy that blends legal prowess with ethical fortitude. In an era where the line between corporate accountability and profit can often blur, his commitment to doing what was right not only salvaged a major financial institution but also set a standard for future generations of legal professionals.
