February 11, 2009
The Death of the Deal Toy?
Posted by Christine Hurt

Earlier this week my colleagues on the dean search committee were joking that we should have a "deal toy" created to commemorate the "closing" of our successful dean search.  Little did we know that deal toys may have gone the way of the bank account toaster or retirement gold watch.

TDealtoy he WSJ today has the story of Cynthia Swabson, the former mastermind of Lehman Brothers deal toys for the last 20-plus years.  For those of you not fortunate enough to have toiled in the transactional mines with any of the various parties to a deal, a deal toy is usually some sort of Lucite knick-knack that serves as memorabilia of a deal that closed successfully.  This picture is a deal toy from a deal that I worked on back in the day.  I notice that it did come from Lehman Brothers, so it may be a "Cynthia Swabson"  If you can see on the right, there is a slender cavity (like on an old-style thermostat) with fluid in it -- that's oil from the refinery that was financed.

Obviously, Lehman has no deals these days or needs for deal toys, and few other firms do, either.  In these tough economic times, deal toys are an unnecessary extravagance, even with so few deals taking place.  Deal toys don't come cheap, and in boom times were given to many people that worked on the deal as the issuer, the investment bank, the law firm, and maybe others.  The article mentions that deal toys were a $100k or so line item in Bear Stearns' budget. 

Deal toys may not be gone forever.  I remember when I began practicing in (gulp) 1993, junior associates often bemoaned the fact that the deal toys didn't trickle down as far in the ranks as they had in the go-go 1980s when even paralegals may have gotten deal toys.  In leaner times, only partners received them.  As the 1990s transitioned into its own deal-crazy era, the closing dinners got bigger again and the deal toy craze bounced back.  So, I'm going to predict that Lucite may not be gone forever

By the way, once I went to Skadden and worked on deals that lasted years, not decades, my closings (and deal toys) were fewer and farther between.  But the best deal toy I ever saw was at Baker Botts.  It was the Texas Commerce Bank deposit slip for $3,000,000,000.00 from the Pennzoil/Texaco case, encased in Lucite.

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Comments (6)

1. Posted by Jake on February 11, 2009 @ 19:36 | Permalink

That is a way cool Lucite, Christine.

2. Posted by David Friedman on February 13, 2009 @ 15:00 | Permalink

That is the best deal toy I have ever heard about, Christine. The best one I have is a lucite-encased 4-by-4 replica of a pig farm. It was from a refinancing of a huge agribusiness entity.

3. Posted by 2L on February 20, 2009 @ 10:22 | Permalink

A few months later, at a retirement party for J.P. Morgan CFO Dina Dublon, 52--whom Dimon was replacing with an ally from Bank One -- Dimon stepped to the podium and praised her service to the company. Then he unleashed a biting one-liner: "But if you paid one dollar for Texas Commerce bank" -- which J.P. Morgan acquired in 1987 for $1.2 billion -- "you paid a dollar too much!" The room, studded with Texas Commerce alumni and executives who had championed the deal, went dead silent.

4. Posted by Jake on February 20, 2009 @ 20:19 | Permalink

It is untrue that JP Morgan acquired Texas Commerce Bank in 1987. It was a marriage of TCB and Chemical. Thence followed the marriage of Chemical and Chase. Finally JP Morgan took over. Even assuming Dimon actually made the statement attributed to him above, it is hard to understand how Dimon could have the slightest clue about the economics of the TCB-Chemical deal in 1987 (save through hindsight, which is common but requires little real expertise).

5. Posted by Broc Romanek on March 3, 2009 @ 6:35 | Permalink

This blog entry inspired me to post a "deal cube" poll on the DealLawyers.com blog. And also solicit favorite deal cube stories.

Today, I posted the first of a series of "Deal Cube Chronicles" on the blog, repeating those stories. Pretty funny stuff. Thanks for the inspiration!

6. Posted by Fiona on July 20, 2009 @ 14:07 | Permalink

Thats a really interesting deal toy you have there.

I think there will always be room in the marketplace for lucite deal toys, maybe things are a bit crappy in the industry right now but all the more reason to keep up high flyers spirits I say

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