On Wall Street, the wheel of fortune can spin around and around, from enormous cash bonuses and luxurious perks one year to the unemployment line the next.
Then there is Fred Eckert, a onetime Goldman Sachs partner who soared as a star in "vulture" investing in ailing companies. But in the turmoil of the financial crisis, his business and wealth came crashing down. By 2011, he was bankrupt, divorced and, for two months, in a coma.
Today, he is in better shape, earning $1 million a year from a consulting job, although that expires next year. But most of his income is dedicated to paying leftover debts — he says he is running at "break-even at best" after expenses.
It is a far cry from the luxury he enjoyed just a few years ago: an 11-bedroom mansion over 28 acres in the horse country of Bernardsville, N.J., 18 vintage automobiles and a 1,500-bottle wine collection.
Now Mr. Eckert, 65, is planning to return to the arena. He says he has shed 25 pounds from his peak of 220 and has given up drinking. His cashmere overcoat may be rumpled, but his confidence is high.
Mr. Eckert is trying to start a new money management business by raising up to $100 million. The new company's name — Phoenix Star Capital.
While even longtime friends say a comeback will be difficult, Mr. Eckert perseveres. He went to the SALT (for SkyBridge Alternatives) hedge fund conference in Las Vegas last week to try to drum up interest in his new venture.
"I'm going to make it back," he said in a recent interview. And this time, he vows, he will avoid "the excesses, both in business and personally."
His excesses were once the talk of Wall Street. For a lunch in 1993, he ordered a $6 Reuben sandwich — made with corned beef, Swiss cheese, sauerkraut and dressing — with a $120 bottle of Corton-Charlemagne Burgundy.
"The waitress said it was the greatest disparity she had ever seen between the price of the entree and the price of the beverage," a former business partner, Thomas Inglesby, recalled in a legal deposition.
Mr. Eckert and his wife at the time were driven in Maybachs and Bentleys and vacationed on the French Riviera. From 2002 to 2008, the couple spent an average of $10.8 million a year, according to divorce papers filed by the wife in 2011.
Decked out in Brioni suits, Mr. Eckert was a raconteur with a quick wit and "a personality that filled up the room," one colleague recalled. He dominated most conversations, and his fearlessness made associates believe they "could slay any dragon."
His rise came with a private equity fund he founded in 1994 at Sanford Weill's Travelers Group. The fund, Greenwich Street Capital, was spun off in 1999 and became the GSC Group. Through its distressed-debt investing, GSC participated in a 2002 takeover of the theater chain Regal Cinemas and a 2004 merger involving the printing giant R. R. Donnelley, with Mr. Eckert serving on the Regal and Donnelly boards.
At the top in 2007, GSC managed $28 billion and Mr. Eckert's 25 percent stake was worth as much as $250 million on paper. That year, he left his second wife and three sons to move into a $65,000-a-month suite in the Towers at the Waldorf-Astoria in Manhattan with a flight attendant from GSC's Gulfstream IV corporate jet.
But GSC had borrowed $250 million by February 2007, primarily to finance growth but also to make cash payouts to its top executives. Its timing could not have been worse, as the subprime crisis was beginning to freeze the credit markets.
GSC might have avoided bankruptcy by trimming its sails and working harmoniously with creditors, some former fund officials say. But Mr. Eckert, a veteran of many tough debt renegotiations, clashed with the firm's lenders when they rejected his proposed debt restructuring and would not approve 2008 bonus payments. He refused the banks' demand that he resign.
The firm filed for bankruptcy in 2010, as did Mr. Eckert in 2011. The Eckerts sold their home for just $7.9 million in 2010 to pay off debts but still owed $3.25 million to JPMorgan Chase and $2 million in federal and state taxes.
Early in 2011, he tripped in a parking lot after lunch at a Morristown, N.J., steakhouse, hitting his head. He was in a coma for two months. Mr. Eckert says he believes that the fall may have been caused by the interaction of a new prescription medication mix and alcohol.
Looking back, Mr. Eckert said he had been "too optimistic" about GSC's growth prospects and should not have taken on so much debt.
"I wanted to be as big as we could be. I wanted to be a major financial engineering company," he said. "It just killed me to see the looks on the faces of the people I had hired when we closed the place. I was the pied piper."
He attributed the firm's demise to "the perfect storm" that swept over markets and swamped many companies, not to big spending and his lavish lifestyle.
Mr. Eckert was the oldest of four children of a chemist who worked at the battery maker Globe-Union. Born Alfred Carl Eckert III, he grew up in a modest home in Wawatosa, Wis.
Starting as a Goldman banker at $16,000 a year in 1973, Mr. Eckert specialized in corporate finance. He founded the firm's leveraged buyout business, which structured deals like the buyout of the department store chain R. H. Macy in 1986. He became a partner in 1984.
Some of his deals forged lifelong bonds with clients. John Bryan, one of five executives who led a 1984 buyout of the Georgia Gulf chemicals company, recalled that Goldman won the deal partly by offering management a 25 percent stake. But he said Mr. Eckert was able to combine financial analysis with "the people part of things."
Mr. Bryan attributed the banker's conspicuous consumption at least partly to "a marketing strategy. He was establishing his 'street cred' in the heavy hitting deal making community."
The Goldman executive lived large. He bought a Ferrari sports car for himself and a Rolls-Royce for his first wife.
He became an expert on the junk bonds used to finance buyouts. When that market tumbled in 1989, he started a fund at Goldman to invest in such bonds at a discount and seek control of the issuers. But vulture investments offended the firm's clients, and Goldman closed the fund.
Mr. Eckert left Goldman in 1991 to start his own fund with a colleague. He also split with his first wife and married a Goldman colleague, spending $15 million to buy and improve a 1904 Greek Revival mansion built for a member of the Ballantine brewing family
Mr. Eckert left that firm to form Greenwich Street Capital in 1994.
In his peak earning years, Mr. Eckert made $19 million in 2004 and $13 million in 2006, according to a court filing by his second wife. He often flew via private jet to Green Bay Packers games. "When I land," he told colleagues, "the only plane bigger than mine belongs to the owner of the visiting team."
Aided by strong returns in some corporate debt funds, such as a loan fund run by Mr. Inglesby, his former business partner, GSC expanded into subprime mortgage debt. Mr. Eckert began taking steps for the firm to go public. Bankers said GSC could be worth $1 billion.
But in 2007, the subprime debt market began to collapse. When GSC was not able to comply with the terms of its bank debt in 2008, GSC's partners and outside investors like Jefferies & Company at first put up money to keep the firm afloat. It was not enough; GSC filed for bankruptcy in mid-2010.
Another alternative money manager, Black Diamond Capital Management, gained control of the firm by buying up its bank debt. During the bankruptcy, Mr. Eckert negotiated a three-year consulting pact with Black Diamond worth $3 million — prompting other creditors to obtain his ouster as the trustee overseeing the sale.
Despite GSC's failure, Mr. Eckert was accused in divorce and bankruptcy court filings in fall 2011 of "profligate spending" on hotels and private jets and "paying escorts for sexual favors" while falling short on $44,000 a month required for family support. "The vast majority of our assets have been wiped out," the former Ms. Eckert said.
Mr. Eckert disputes some of the accusations, noting they were part of an acrimonious divorce. He says the unpaid support was repaid.
His personal bankruptcy settled claims of about $25 million for $3.6 million; his second ex-wife and his children will receive $2.4 million over three years.
Recently, Mr. Eckert sent a letter to former GSC colleagues: "I put my heart and soul into GSC, I tried my best and when the time came, I 'went down with the ship.' The demise of GSC was very much a cause of my personal bankruptcy filing and physical illness, and it coincided with a collapse in my personal life from which I am still recovering."