The Rise And Fall of The Smith Reich, Part Four

By the late sixties Gunther and my father, these two Masters of the Universe, had amassed quite an empire. They were partnered in fourteen fashion companies with Anne Klein (Donna Karan was Anne Klein’s assistant) being by far the most profitable. Anne Klein had started the concept of sports wear, and they had just started to license products of these designers. This was a very new concept. One that was begun by Pierre Cardin, another designer who was part of the empire. Now they were taking his ideas to new heights.

So this is where the story begins to get really interesting, where the rubber met the road, where one lays back one’s ego, and insecurity and greed triumphs over benevolence and love.

My father was twelve years younger than his partner Gunther and he must have felt and then decided that he would survive Gunther and wanted to make sure that he would be fine in case of Gunther’s death.

So as was my families fashion, (and this dear reader is the turning point of this game) my father initiated and Gunther agreed to have their lawyers draw up plans that proclaimed in clear and undeniable terms that all the assets of the companies at the time of death of either partner were to be passed on to the other partner, and that all the life insurance would go to the surviving partner to help offset any taxes that were due. The only asset that passed on to the family, was the amount of inventory (clothes) that were in the warehouse at the date of death. In this case it was about $200,000.

My father was sure, and my mother was sure at a later date that they could win it all. But in fact, when it came to money, with all their acumen, forethought, talent, and cunning they lost it all. Here’s how the final chapter played out.

On that fitful day in the summer of 1972, as my father was approaching his 58th birthday, he collapsed and died in his favorite lunch restaurant, smack in the middle of the garment district, surrounded by many friends.

The only executor of my father’s estate was Gunther, who was so traumatized by the event, and probably of the thought of dealing with my mother after having heard the repercussions of the will, he declined his position, and my innocuous uncle, who was always jealous of my father, became the ineffectual executor. He was of no help to the family.

As I was only twenty-three years old and still in Graduate school, my advice was not only not heeded, but roundly ignored. I was an academic and a day dreamer. What did I know of the realities of business? My mother would have nothing to do with me. Well let me tell you now, I knew a lot more than any of the lawyers and my uncle did at the time, and I was the only one who had any relationship with Gunther. But this is a whole other story.

With the death of my father Gunther became an extraordinarily wealthy man, far more wealth than he needed. This man who received it all now offered nothing to my mother or to the family. He said, and rightly so I guess, that my father had initiated these new wills, as he thought Gunther would die first, and as my father lost the bet he felt no obligation to provide anything to the family.

Gunther, within a few weeks of my father’s death had completely removed himself from the family. I never heard from nor saw him again. Quite honestly, I didn’t expect to and I am not sure I disagreed with him. I just realized that my mother and the family were in need and he was not there to help, but he did honor any commitments that were legally binding.

So there we were, basically broke. My mother sold her house, cars, etc., and moved to New York where she completely fell apart, started drinking (she had never drank a drop before) but somehow managed within a year to remarry a new, mean-spirited, wealthy man. He did though, help stabilize my mother.

Gunther survived my father, but only for a few years, and too collapsed and died from a heart attack. He had lost his wife and disowned his son, so upon Gunther’s death, Christine, the woman who had joined the party the latest, the person who loved him the least, if at all, inherited enormous amounts of money. In 1974, she promptly moved back to Austria, and has never been heard from since. I guess this is the way of all flesh, and with this so ends the story of the rise and fall of the Smith fortune, not with a bang, but with a whimper.