Pittsburgh icon, former Heinz exec O'Reilly verges on bankruptcy

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The specter of Anthony J.F. O’Reilly headed into bankruptcy is a stunning turnabout for the former Irish rugby star who became a celebrity of commerce, too, a renowned social and cultural figure during his high-profile tenure here running the H.J. Heinz Co., topping the Business Week list of highest paid chief executives and at times bearing the title of Ireland’s richest man.

This is the story of the fall of a Pittsburgh icon.

A judge on Friday sided with Allied Irish Banks Plc in its battle to recoup 22.6 million euros ($30.7 million) as part of a total 195 million euros Mr. O’Reilly owes to several banks.

The Irish newspapers, including the Irish Independent where his shares are part of the assets, are predicting a bankruptcy filing in the Bahamas, where the businessman has a home.

“It sounds like he had one great house of cards that, when the assets began to be distressed, they couldn’t finance the empire,” said Edward Buthusiem, director of corporate compliance and risk management advisory services at Berkeley Research Group in Philadelphia.

From numerous reports, the fateful day in court followed decisions made years ago to invest in things the 78-year-old Mr. O’Reilly had been involved in for decades.

The major financial hits came from pouring millions into publisher Independent News & Media and into crystal manufacturer Waterford Wedgwood.

Neither newspapers nor luxury crystal are exactly boom businesses these days.

But Mr. O’Reilly didn’t give up on them; he kept putting money in rather than make the tough business decision to cut his losses. “When guys like that get so rich, they don’t like to lose,” said Mr. Buthusiem.

Tony O’Reilly, as he is generally referred to by those in Pittsburgh who remember him from his days living in Fox Chapel, was a different sort of chief executive even when he was traveling the globe as the first non-U.S. born leader of the food company launched in Sharpsburg.

He’d begun investing in newspapers early in his career, buying up more properties while he pushed ketchup and beans into new markets. In a Heinz company biography issued a few years after he came to Pittsburgh in 1971, he was identified as also being chairman of Fitzwilton and chairman and controlling stockholder of Independent Newspapers Ltd.

A chief executive with extensive interests isn’t exactly unheard of — consider Richard Branson whose Virgin Group includes numerous businesses ranging from travel to financial services to music, said Christopher H. Wiles, with Rockhaven Capital Management Team in Mt. Lebanon.

Creating a conglomerate that pulls disparate businesses into one entity is one thing; a one-man business and charitable powerhouse is another. “It’s a very rare person who has a lot of business interests outside of his job,” said Mr. Wiles, who noted that the chief executive job is exhausting in large and small operations.

Mr. Wiles met Mr. O’Reilly once, years ago at a charity event.

“He was very gregarious,” exuding the kind of personality that “wanted to be the center of attention, loves to be the center of attention, has an ego that matches,” Mr. Wiles recalled.

That can be an asset, and Mr. O’Reilly’s career proved that as his wealth grew, his charitable accomplishments won praise, and he even added a “Sir” to his name after Queen Elizabeth knighted him.

His style drew the eye and dazzled.

A 1997 Business Week story described a typically extravagant three-day gathering outside Dublin that included Heinz executives and directors, Wall Street analysts, politicians and others. Mr. O’Reilly and his wife, a wealthy woman in her own right, arrived in a blue Bentley.

“When he walks into the marquee, the whole place comes alive,” the magazine quoted a guest. “Short of a U.S. president’s arrival, I’ve never seen anything like it.”

In 1999, the Pittsburgh Post-Gazette covered an extravaganza closer to home when the new O’Reilly Theater in the city’‍s Cultural District was opened at a gala with 600 guests. The theater was named after the then-Heinz chairman, who told the crowd that he had a similar upbringing in the 1940s and 1950s to master of ceremonies and author Frank McCourt.

“I can still smell the pungent odor of poverty that lingers in my nose and in his,” Mr. O’Reilly was quoted as saying.

According to the Post-Gazette report at the time, the $20.5 million theater was built with the city and county each pitching in $2.5 million, the state providing $7 million and the rest from private sources, including past and current senior Heinz executives and Chryss O’Reilly, wife of the then-Heinz chairman. Mrs. O’Reilly and the executives also contributed an undisclosed amount to put his name on the theater, the report said.

The news that the courts are now forcing Mr. O’Reilly to sell off assets such as Castlemartin, his 750-acre estate that served as a home for his large family and a place to woo executives and politicians alike, has set off headlines such as the one this week in the Irish Times: “The golden age and sad end of O’Reilly’s beloved Castlemartin.”

The fact that he used the estate as a personal guarantee against the loans might have been a sign of the times, as much as his unfounded confidence that his various holdings would back up his debt. The financial downturns that Ireland has suffered through might have meant tougher terms from the banks, said Mr. Buthusiem.

“This is amazing. I’m shocked,” said Jay W. Sukits, an assistant professor of business administration at the University of Pittsburgh who easily recalled some of the details of Mr. O’Reilly’s ascent into the top ranks of Heinz and his tenure running that business.

“I think it’s very unusual for CEOs to do this,” said Mr. Sukits. “This is more what athletes do.”

Business leaders generally shield their personal property and watch for signs that an industry is not growing, while professional athletes suddenly flush with cash can find themselves in financial trouble quickly once the paychecks stop, he noted.

If Mr. O’Reilly does file for bankruptcy in the Bahamas, it might be a choice based on that country’s laws and what sort of assets they may allow those filing to shield, said Mr. Buthusiem. Even though he has lost the battle to save some of his key assets, Mr. O’Reilly might not end up looking for an apartment to rent on the North Side where he once ran a factory.

“At the end of the day, I don’t know how much really it’s going to impact him, other than his ego and his reputation,” said Mr. Buthusiem.

Teresa F. Lindeman: tlindeman@post-gazette.com or at 412-263-2018.

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