FELIX ROHATYN | Rescued NYC from Bankruptcy in 1975

L to R: Felix Rohatyn (1928-2019) and
NYS Governor Hugh Carey (1919-2011)

December 24, 2019 – Felix George Rohatyn died ten days ago in New York City. He is credited with the financial innovation that engineered the rescue in 1975 of the City of New York from bankruptcy. Creditors had refused to roll over NYC’s expiring bonds. As it was, many bondholders who couldn’t afford to wait through the process sold their bonds at a significant loss. 

Rohatyn was chairman of the Municipal Assistance Corporation from 1975 to 1993, appointed by Governor Hugh Carey. Known as "Big MAC", it had authority over the City budget and served as chief negotiator between the city, its labor unions and its creditors. Its authority was exercised in part through the Financial Control Board, which lost its budget powers in 1986. MAC itself sold $10 billion in bonds before it was voted out of existence when the debt was repaid in full in 2008. However, the Control Board still exists as of 2019 and continues to monitor NYC’s finances.

Rohatyn was concerned about the risks created by derivatives, and in the 1990s described them as "financial hydrogen bombs, built on personal computers by 26-year-olds with M.B.A.s".

Born May 29, 1928 in Vienna, Rohatyn’s family left in 1935 for safety in France, moving again in 1940 when the Nazis occupied France, traveling first on a Brazilian visa from Marseilles to Casablanca and ending up in the United States. He said later that all they could take out of France was a few hidden gold coins and he added: “Ever since, I’ve had the feeling that the only permanent wealth is what you carry around in your head.”

He attended Middlebury College and landed at Lazard, where he prospered in the mergers and acquisitions business, arranging many transactions in the four decades from the 1960s through the 1990s. Rohatyn later became co-chair of the Commission on Public Infrastructure to raise funds for public works, including the effort to create a national infrastructure bank. After Hurricane Sandy he was appointed co-chair of the New York State 2100 Commission to rebuild New York City in the context of climate change. From 1997 to 2000, President Bill Clinton (after having considered Rohatyn as a possible Treasury Secretary) appointed him U.S. Ambassador to France.