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NYC 9/11 Public Portal Document

actions. We don' view this as having to do with Bernie's medical condition or Iris. We feel that Lutnick has breached his fiduciary responsibility to the family." engaging in such acts as barring the Cantors from access to records, and changing the nature of the partnership they control.

The other side

Lutnick, for his part, views his actions as being responsible in light of Bernie's declining medical condition. He contends that the partnership places him in incontestable control of the brokerage firm, and that Iris is using her sick husband to obtain an undeserved voice in management by virtue of her discretion over Bemie's financial affairs.

Lutnick supporters contend that his supremacy remains incontestable by virtue of amendments to Cantors partnership agreement signed by Iris Cantor and Bernie back in 1993 and 1994.

Some observers believe that Lutnick's pronouncements have a hollow ring, however. Lately Lutnick has taken to pressing top managers for oaths of loyalty in the form of irrevocable proxies.

Lutnick sought Delaware court sanctions for his interpretation of the incapacity arrangement to protect the stability of the firm, his supporters say. But court suits, particularly regarding partnership interests. have a way of taking unpredictable turns.

Most of the senior officers of Cantor wish the ownership issue could be resolved without the ugliness and the infighting. This is just ridiculous," said one broker, who refused to be named. "It's draining too much of the time and attention of the senior managers of this firm. They want it to end—go away."

But some observers believe it's a fitting end to the firm's management style, in place for years. The firm was ruled as Bennie Cantors personal empire—right up to his illness—and a succession plan was bound to be contentious. Even though Lutnick was "running" the firm under a succession plan, Bernie never ceded control to anyone. Hence the lines of authority never developed enough to ensure a smooth succession.

Stoical attitudes

At the firm's offices in New York and Los Angeles, top executives maintain a stoic outward appearance, while batteries of lawyers and hangers-on buttonhole key executives in the hallways to obtain support for their serious positions. Partners are distributing an irrevocable proxy to Lutnick to resolve the issue. The company contends it represents a groundswell of support for him.

"The only place where there is instability in this situation is with Mrs. Cantor," said the Cantor spokesperson.

Some senior executives have become so disheartened at the situation that they refuse to discuss it over the telephone in the office. A gallows humor pervades at the firm. Brokers describe the letters circulating as "Weekend at Bernie" memos, naming them after a sophomoric movie depicting a weekend spent with a dead man. There are even reports of scuffles with armed guards in the Los Angeles office.

Tuesday, September 15, 2001 America Online: RG10 Page: 3

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