Thursday, January 29, 2009

Brandeis’s liquidator-in-chief

The chairman of Brandeis’s board of trustees since 2007 is Malcolm L. Sherman of Wellesley. He also happens to be chairman of Gordon Brothers Group LLC of Boston, which the school describes as “an advisory, restructuring and investment firm” and The New York Times calls “a leading retail liquidator.”

So why are we surprised that when Brandeis hits a financial rough patch, his Brandeis board of trustees decided Monday to shutter the school’s Rose Art Museum and liquidate its irreplaceable art collection?

Sherman has served on the boards of several local cultural organizations, but his career is marked by repeatedly being at the wrong place at the wrong time – when companies he ran sputtered, filed for bankruptcy, were gobbled up by competitors.

Sherman is a former overseer of the Boston Symphony Orchestra, and a former chairman of the Museum of Science, where he remains a trustee, according to the Massachusetts Cultural Council. He currently serves on the boards of the Massachusetts Cultural Council, Museum of Science, Two Ten International Foundation, New England Medical Center, the Mass Eye and Ear Infirmary, The Fourth of July Foundation, and the Molecular Cardiology Research Institute.

Biographical accounts of Sherman always note his time at the reins of Zayre. He began work with the discount retailer chain in 1968. He attained the rank of president of the Zayre Stores division of the Zayre Corporation before he left in 1987, which was shortly before the discount store chain announced it would shutter its automotive service business and expected a $10 million to $15 million net operating loss for the second fiscal quarter. In the company's fourth quarter of that year, the division posted an operating loss of $16.7 million. (That's $31.2 million in today's dollars, which makes Brandeis's $10 million shortfall this year look small.)

Zayre was sold to its competitor Ames in 1988. The Zayre name was abandoned by Ames a couple years later. (Ames itself went bust in 2002. New York Times: “Ames encountered its first significant financial difficulties after it acquired the struggling Zayre chain of discount stores in 1988.”)

Sherman became chairman of the ailing vacuum cleaner company Regina Corporation in 1988. He left the following year, after it filed for bankruptcy and was acquired by the Electrolux Corporation.

Sherman was hired as chief executive of Morse Shoe in Canton in June 1992. He was brought in to rescue the struggling company. But by January 1993, The Patiot Ledger reported, Morse was being sold, the new owner planned to cut staff, and Sherman was leaving with a severance package of a year’s salary of $400,000 and 18 months of benefits, including the lease of a luxury car.

He wound up at Ekco in 1993, and was named chairman of the board and CEO in 1996. He was running the company when it was acquired by Corning Consumer Products in 1999.

And so on.

It makes one wonder: Was Sherman named chairman of Brandeis’s board of trustees in May 2007 because the board thought him the perfect guy to lead the destructive actions it’s taking now? I’d ask him myself but he’s not responded to my attempts to reach him via the university and his home.

Dear readers, please contact me here if you've got info to share about the Rose or Brandeis.

Our previous reports:
The first painting Brandeis should pawn.
Question: Brandeis financial management?
Brandeis president’s e-mail on Rose.
AG on Brandeis's plans.
Brandeis’s money.
Update: Brandeis to close Rose, sell art.
Brandeis to close Rose.


Blogger todd.prussman said...

Hey Greg

Your stuff on Brandeis/Rose is awesome, I'm pushing your blog around on my facebook and sending out a few links in e-mails, too. It's all about following the money.

I gasped, when I clicked on, was it Monday night, and saw the initial post. Yours right there at the same time. It struck me instantly as a radical decision that could be justified (in this severely down market) only if the university were truly on the brink. It simply makes no sense. When you posted on recent operating surpluses, the situation became more perplexing. Where/what are the hidden losses that justify such an amputation?

With memories of what happened at Bradford College, I am aware of how persistently highly educated and paid trustees and administrators can hide institutional incompetetance straight up to the brink of failure. And then, how swiftly and finally that collapse can come when the day of reckoning arrives.

Funny that I am not closely associated with either institution, but feel the loss of Bradford and fear the loss of the Rose, as a potential diminishment of my environment.

I am planning on going to the show on Monday at Beehive, so I'll see you there.

January 30, 2009 at 9:26 AM  

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