Rod MacArthur at my wedding 1979
oan & Grossman had grown modestly in the 1970s. I was made a partner sooner than many of my law school peers in large law firms, notwithstanding my three- year absence in the Army. I’d sometimes get antsy when business slowed down and I didn’t have enough work to do. When I was busy, I was always a happy camper.
My mother had died in early 1979, and Julia Bowe had left their apartment by then for a nursing home. Single again, I had moved from Belden to a nearby townhouse I purchased on Larrabee Street in the Lincoln Park neighborhood. It had two units, a duplex that I lived in upstairs, and a one-bedroom garden apartment below that I rented out. Thus began my long career in life as a part time landlord. In my social life, I had been dating Cathy Vanselow for a while and I was thinking seriously of asking her to marry me.
This was the lay of the when a litigator friend at Roan & Grossman sprung on me a job opportunity he thought I would fit me. He said one his former professors at Northwestern University Law School had asked him if he knew anyone who might be interested in becoming general counsel of a fast-growing direct mail company. He said he had immediately thought of me, and I should let him know if I was interested. I was initially curious about the opportunity, but not particularly excited when I learned the company mostly sold plates of some kind or another.
Then I learned that the business involved was owned by the son of John D. MacArthur, reportedly the third richest man in the country when he recently died. The son, Rod MacArthur (J. Roderick MacArthur), was also a director of the John D. and Catherine T. Mac Arthur foundation, the beneficiary of most of the senior MacArthur’s estate. Rod’s main business at the time was the direct marketing of collector plates. It had grown very rapidly in recent years and was now at a size where it would be more economical for it to have lawyers in-house rather than remain completely reliant on outside law firms. Of particular interest to me was the fact that Rod wanted a lawyer at hand to advise him on his burgeoning dispute with his fellow Foundation directors. The prospect of being involved in this indirect way at the birth of one of the country’s largest foundations was an attractive aspect of the work. All of these items made the situation interesting enough to look into further. In short order I met with 58- year-old Rod MacArthur and his 31-year- old Executive Vice President Kevin McEneely.
The heart of the business of The Bradford Exchange at this time was selling decorative collector plates that were to be displayed on a wall or put on a knickknack shelf. They were not to be eaten off of or, God forbid, put in a dishwasher.
The rampant inflation afoot at the time was having a wonderful effect on the collectibles business of Bradford. With a modest aftermarket in the sale of collectible plates, the plate you bought for $29 the year before was often worth considerably more the next year. This was not entirely a surprise. With the bill coming due for the extraordinary national expenditures during and after the Vietnam War, inflation in 1979 was running at over 11%. President Jimmy Carter would lose the election the next year in consequence.
Rod MacArthur was delighted the way the business was taking off, though with his father’s recent death, he was increasingly devoting his attention to his role as a director of the John D. and Catherine T. MacArthur Foundation. When his father had died at the age of 81 in 1978.
John D. MacArthur
Most of his wealth had been left to the Foundation and consisted of more than 3 million policyholders, $5.5 billion of insurance coverage in force, and in excess of 5,000 insurance agents and brokers. He made his longtime attorney, William Kirby, the first head of the Foundation. I knew a little bit about Kirby, having known his daughter when both of us were attending the University of Chicago Law School. According to Kirby, John MacArthur had said to him, “I’m going to do what I do best; I’m going to make (money). You guys will have to figure out after I am dead what to do with it.” Kirby explained the Foundation was created because in 1970, MacArthur thought his will “was a disaster from a tax and estate planning perspective. The federal government would take most of it in taxes.”
The senior MacArthur had two children with his first wife Louise, Rod and his sister Virginia. He divorced Louise when Rod was 14 and married his then secretary, Catherine T. Hyland in 1937. The second Mrs. MacArthur was closely involved in the growth of his insurance empire and real estate investments. For many years towards the end of his life, MacArthur conducted his widespread business affairs from a booth in the Colonnades Beach Hotel coffee shop, in Palm Beach Shores, Florida.
Colonnades Beach Hotel 1966
At his death he owned more than 100,000 acres of prime real estate in Florida, much of it in Palm Beach County.
John MacArthur had served in the U.S. Navy and Canadian Royal Air Force in World War I. He then had started working in an insurance company owned by his brother Alfred. A gifted salesman, during the depression he had bought a predecessor insurance company. This later grew into his estate’s main asset, Bankers Life and Casualty Co. Over the decades that followed, with multiple acquisitions and shrewd real estate investments, he had turned Bankers Life into a successful and enormous insurance giant.
In the course of my interviews with both Rod and Kevin, I was treated to their thrilling tale of how Rod had started the company while working for his father at Bankers Life. When the little collector plate company began to take off, Rod had to wrest control of the enterprise away from his father. The struggle had included hijacking plate inventory from a warehouse and, in the telling, ultimately freeing Rod in his middle years from decades of subordination and tight control by his father.
While the story supposedly had a happy ending, with father and son fully reconciled before his death, I had my doubts. It smacked of being a better tale for public consumption than the likely reality. Rod’s stories of his life working for his father were mostly focused on his having consistently achieved business breakthroughs that went unrecognized and unrewarded by his father. Rod MacArthur’s struggles with the Foundation’s initial board of directors loomed large following his father’s death and it certainly appeared a major dispute over the management of the Foundation would be unfolding.
I was also intrigued and attracted to the idea of leaving private practice and getting more closely involved in the running of a business. Also weighing in the balance was the fact that staying with the law firm was not without risk itself. Roan & Grossman in the 1970s had not grown at an exceptional pace, and, after being defeated in his run for mayor in 1975, Bill Singer had left to join the Kirkland & Ellis law firm. This had had taken away one of the firm’s better business getters for the future. Given that there was a real risk the firm might struggle in the future, I had to take that into serious consideration also in deciding whether to accept the offer to become The Bradford Exchange’s General Counsel.
Finally, much like my decision after leaving the Army to join Roan & Grossman instead of returning to Ross, Hardies, I decided to again leave the certainty of a prior, known experience for the unknown world of what lay ahead. Keeping a toe in my last pond, I acceded to Roan & Grossman’s unforeseen request that I remain Of Counsel to the firm following my departure. While fully committed to my career change, I figured that if life in my new position somehow went awry, keeping some form of tie to my old firm couldn’t hurt. On this basis, I began my new job as General Counsel of The Bradford Exchange.