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Lazard Unveiled: Behind the Corporate Veil

How Bruce Wasserstein and Lazard can fix Atria Senior Living

Bruce Wasserstein and Lazard's managing directors could do a lot to fix Atria Senior Living. Atria is controlled by Lazard Alternative Investments. Bruce Wasserstein and his family own a significant share of LAI and Wasserstein has veto power over many of LAI's major corporate decisions. Just like other Wall Street firms, Wasserstein and Lazard are using complicated corporate structures to avoid taking responsibility for problems at companies where they could make all the difference.

Instead of trying to duck responsibility, Wasserstein should take responsibility for improving things at Atria just as he would with any of his other "investments."

Here's How the Relationship and the Responsibility Unfold

Lazard uses the common Wall Street practice of creating complicated corporate structures that shield firms from responsibility for their actions but retain some control.

This is all described in Lazard Ltd's filings with the SEC.

The control works like this. Prior to Lazard's 2005 IPO, every individual Lazard entity used to be part of one big private firm called Lazard Freres. After the 2005 IPO, some of the business lines were taken public under the Lazard Ltd name¹⁷, while others remained private with no meaningful changes in ownership or control.¹⁸

More specifically, Wasserstein and a group of Lazard managing directors formed a holding company that owns a controlling stake in Lazard, Ltd., the public company.¹⁹

Then, Wasserstein and that same group of insiders also have a significant interest in Lazard Alternative Investments²⁰, which ultimately owns Atria.²¹

Lazard Ltd's SEC filings also provide evidence of day-to-day operational links between Lazard, Ltd and Lazard Alternative Investments. For example:

• The president of Lazard, Ltd. serves as the chairman of LFCM, which owns Lazard Alternative Investments.²²
• All or part of Lazard Alternative Investments revenues go to Lazard Ltd.²³
• Lazard Ltd. provides administrative services for Lazard Alternative Investments²⁴
• A number of Lazard Ltd managing directors also work for Lazard Alternative Investments²⁵
• Lazard Ltd. has a "business alliance agreement" with LFCM-and Lazard still has a standing option to purchase the North American and European fund management businesses of Lazard Alternative Investments (and the price Lazard Group would have to pay for this is only $10 million).²⁶