Chapter 3

The L Word

Steve Schwarzman and James B. “Jimmy” Lee, Jr. were elated. It was the summer of 1989, and the two men had just finished a marathon negotiating session to buy CNW, a railroad company, for $950 million. The auction had been fierce. Schwarzman and Lee, a banker from Chemical Bank who was providing much of the debt financing for the deal, had worked on one floor of a Chicago law offices, bidding late into the night against a rival bidder tucked in a separate conference room one floor below.

When the deal was finally won, with Chemical providing $585 million in loans for the purchase, Lee wanted to mark the event with some sort of celebration. Blackstone had arranged a tiny chartered jet to ferry the pair back to New York, and ...

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