From Fast Bucks to Fast Food

FROM FAST BUCKS TO FAST FOOD
“I control this goddamn place.”

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Gulp down an RC Cola or chomp through an Arby’s roast beef sandwich and you’ve added pennies to the latest (and perhaps final) kingdom of Victor Posner.

Having walked away from the wreckage of Sharon Steel and dodged the prison bullet for tax evasion, Posner has swaggered into the consumer world, becoming a fast-food and soft-drink tycoon, with a sideline in leisure wear.

Three companies now form the heart of the Posner empire: Royal Crown Cola, makers of RC, Nehi, Diet Rite, and Upper 10 soft-drink concentrates; Arby’s, Inc., the nation’s largest roast-beef franchise; and Graniteville, a maker of leisure and sports wear.

RC Cola and Arby’s were purchased courtesy of $250 million in subordinated debentures, or “junk bonds,” sold through Drexel Burnham Lambert and its former junk-bond chief (and now jailbird) Michael Milken. In the case of Graniteville, the following scenario unfolded: The prior owners ended the company pension plan, purchased annuities for its employees, and used the $36 million pension surplus to help Posner pay for the acquisition.

Controversy has dogged Posner in his latest venture. In 1990, he became embroiled in a battle with Arby’s franchisees after Leonard H. Roberts, head of the unit, resigned in a public spat with Posner. Roberts accused Posner of siphoning money from the chain via unjustified management fees and cutbacks in capital improvements. A Posner aide denounced Roberts as a disloyal employee.

Roberts, now chairman of Shoney’s, told a Cleveland judge in a lawsuit filed by another party, “There is a Dr. Jekyll and Mr. Hyde situation here.” For example, when a director suggested that a statement dictated by the financier conflicted with the facts, Posner erupted into “a vicious personal attack on that individual,” Roberts testified, using “language like ‘you goddam motherf—ing son of a bitch, you never question me… You are a piece of s— now, you were a piece of s— before I put you here, and you are still a piece of s—. I control this goddam place.’”

Roberts also quoted to the court some of Posner’s philosophy of life, as expressed over Scotch at Tiberio’s, a favorite hangout where he holds court with 20 or 30 relatives and subordinates. “That lecture [was that] these are all small people, and small people don’t survive, or get squashed by people with power and wealth, and he has all the power and wealth in the world.”