Welcome to Dry Powder, I’m Bill Cohan.

There was a time when Ronald Perelman, once a feared Wall Street titan, was the richest man in the United States. But over the past several years, his personal fortune—which stood at nearly $20 billion as recently as 2018—has become so diminished that Perelman no longer qualifies for the Bloomberg Billionaires Index. (I know, I know, cry me a river…) But Perelman’s Great Unwinding has been a point of considerable fixation for many on Wall Street. In today’s issue, I take a close look at what, exactly, catalyzed Ron’s reversal of fortune.

But first…

• Fidelity’s Twitter truth serum: It’s déjà vu all over again for those poor saps who agreed to pony up $7 billion of the $31 billion of equity capital that Elon Musk used to buy Twitter two years ago. Elon, of course, put up the other $24 billion, while a group of Wall Street banks financed the remainder of the ridiculous $44 billion purchase price. Among the other fools who put up equity for Elon were Larry Ellison, who invested $1 billion; Marc Andreessen, who ponied up $400 million through a16z; and Saudi Arabia’s Prince Alwaleed bin Talal, who agreed to roll over his $1.9 billion position into Elon’s Twitter instead of cashing out his stake at $54.20 when the getting was good. Fidelity, the asset management behemoth, also invested a cool $316,139,386—a number that seems made up but isn’t.

  And now Fidelity, seemingly alone, is willing to admit that les jeux sont faits. At the end of September, one of the Fidelity funds that holds the equity stake in Twitter/X marked it down again, to 21.3 cents on the dollar, for a mark-to-market loss of 78.7 percent. That would make Fidelity’s $316.1 million investment worth around $67.3 million these days. That’s probably generous—it should be marked at zero—but nobody wants to admit that right now. We’ll get there, I’m sure, over the next year or so.

  Notably, the banks that underwrote the $13 billion in loans to X, led by Morgan Stanley and Bank of America, still own them. (Elon continues to keep current, to the tune of around $1.5 billion in interest payments a year.) The fact that the banks haven’t sold the loans—or can’t sell them for anything close to par—is all you need to know about the value of the $31 billion of equity invested in the Twitter buyout.

And now, on to the main event…

Ronald would greet us at a small table in a small conference room, holding a big, often unlit, cigar. He was surprisingly small, too—no match for his outsize wealth, appetites, and reputation—but stocky. (The buttons on his fitted shirts were begging for relief.) Joining us were members of the Perelman crew, among them his longtime consigliere Howard Gittis, who died in 2007, and Donald Drapkin, a former M&A lawyer at Skadden who worked for Ronald for 20 years and then won a $16 million settlement after suing him for “unpaid compensation.” (Drapkin left MacAndrews & Forbes in 2007 for a brief stint at Lazard. He died in a skiing accident, age 67, in 2016.) In any event, Jack and I never did any deals with Ronald, though the entertainment value of our visits was not inconsiderable.

Nearly 30 years on, Perelman hardly resembles that feared Wall Street titan. Since the pandemic, he’s been unloading many of his assets. Gone are his 280-foot megayacht and his Gulfstream G650, his massive art collection, much of his high-end real estate, and most of his companies—including his biggest trophy, Revlon, which filed for bankruptcy in 2022. But it wasn’t just Revlon. Many of his other investments seemed bizarre, including a check-printing company, even though most people stopped writing checks long ago. Perelman also had the misfortune of selling various equity stakes, often at inopportune times, to repay bank loans to his holding company. All that might have been fine had Perelman not borrowed so much money, loading MacAndrews & Forbes up with debt and using all variety of his assets as collateral.

Since the pandemic, his personal fortune—which stood at nearly $20 billion as recently as 2018—is so diminished that Perelman no longer qualifies for the Bloomberg Billionaires Index, where the real-estate developer Richard LeFrak holds the 500th spot, with a fortune of $6.3 billion. Forbes, meanwhile, pegs Perelman’s net worth at $1.9 billion. Not nothing, of course, but it’s been a long and precipitous fall, almost Icahn-like.

Ronald wouldn’t talk to me for a piece I wrote in Vanity Fair, in August 2020, that explored why he’d started selling everything. It was obvious to me that he was doing so because the banks, led by Citigroup, to which he owed likely more than $1 billion at his holding company level, were putting the squeeze on him to be repaid. He also owed money related to his now-departed art collection to JPMorgan Chase & Co., Bank of America Corp., and UBS Group AG.

In a rare statement he issued to me at the time, he denied that the banks were pressuring him to sell his fabulous art collection, his fabulous Hamptons and Manhattan real estate, and his fabulous jets and yachts. “I have spent my entire career making deals and have been through tough cycles before, and while this is certainly a challenging time, it is just that,” he emailed me more than four years ago, during the pandemic. “This period has given me the space to think carefully about myself and my business, and to reset my priorities. It gave me a point of view I’ve never had before. I realized a less complicated and less leveraged business life would allow me to focus on what I love most about MacAndrews & Forbes Inc., seek new investment opportunities, as well as allow me to have better and more present time with my family.”

The note continued: “With that in mind, we are evolving M&F. We’ve streamlined operations and are now exploring selling some assets. The changes we’re making strengthen M&F and make it more flexible for years to come. Over the past six months I’ve been mostly at home like most New Yorkers. A simpler life, with less running around and more time with my family, including homeschooling our youngest children, has energized me and taught me new things. For the future, I will spend my time more with my family and all my children, seeking new investment opportunities, and running our [p]ortfolio companies.” (Perelman declined to comment for this piece.)

The payment was deemed to have been made in error, or a mistake, or something that shouldn’t have happened, but did. According to the 8-K, M&F returned the money to Revlon, and Savas resigned immediately from his position at M&F and from the Revlon board. Alas, we may never know why the $5.1 million changed hands. (Savas did not reply to a request for comment.) But soon after the payment was revealed, I was told, the banks started putting the screws to MacAndrews & Forbes to repay its debts or risk having its loans transferred into the institutions’ “workout” divisions, forcing Perelman into an even more draconian situation of having assets sold willy-nilly outside of the “relationship” side of the banks. “A lot of the big banks were freaking out for their own reasons” during Covid, one of my sources in Perelman’s circle told me. “And so, there’s kind of a new rigor that was put on some of this stuff because they were afraid that we were going to be in this mess for years to come. And I think that’s real. I think that is what precipitated the need [for Ron] to say, ‘Okay, we don’t have much negotiating room with these people. We better start liquidating assets to settle up.’”

The decision was made to work with the relationship bankers at the MacAndrews & Forbes creditors to pay down the debt at the holding company, rather than fight the decision to liquidate assets and have to deal with the workout bankers. “Once you start pulling on these threads,” one source told me, “there are consequences that are hard to anticipate.”

One of the unanticipated consequences was managing the large pledges Ronald had made to, among others, Columbia Business School’s new Harlem campus and Princeton University, where his daughter Debra, Revlon’s C.E.O. in the years leading up to its bankruptcy, graduated in 1996. (During his flush years, Ronald was always philanthropic, donating hundreds of millions of dollars to causes as varied as New York Presbyterian Hospital and the University of Pennsylvania, his alma mater.) But it’s clear the banks put the kibosh on some of Ronald’s pledges, figuring that money should go to them, not to wealthy schools and institutions.

In December 2018, Perelman’s family foundation pledged $65 million to Princeton for a new residential college at the university. But in 2021, Princeton announced that the residential college—Princeton’s seventh—would no longer be named for Perelman because the Perelman Family Foundation failed to make the gifts, as promised. Perelman had also pledged $100 million, in May 2013, to help build the new Columbia Business School campus in West Harlem. But he never fulfilled the pledge and, in April 2021, it was restructured to become the Perelman Scholarship Fund, “a permanently endowed source of financial aid,” according to the school. He did make a $25 million gift to Brown University, where two of his children matriculated, for what is now the Ronald Perelman Arts District, and he also made a $4.5 million gift to the St. Ann’s School, in Brooklyn Heights, which one of his daughters attended. But, in fact, the Perelman Family Foundation has steadily declined in its giving over the years: The foundation donated $11.75 million in 2015, and nearly $10 million in the two subsequent years, but only around $3 million in 2019.

The largest donations from the foundation in 2019 were $1.5 million to Multiple Myeloma Research in Norwalk, Connecticut, and $500,000 to Machine Israel, which appears to be a Jewish cemetery in Philadelphia. But in 2023, according to the latest 990, the fair market value of the foundation’s assets was just over $1 million, and MacAndrews & Forbes donated some $33,000 to the foundation in 2023. Ronald is still chairman of the foundation’s board of directors, but it did not seem to make any gifts in 2023.

As for Ronald’s $75 million pledge to the Perelman Performing Arts Center downtown, his name is still on the building, and he’s still making the payments, I’m told. He’s also gotten a reprieve, of sorts, from Michael Bloomberg, who has become the center’s largest donor as its construction costs have increased. The deal Ronald cut with the board allowed him to pay his $75 million pledge over 10 years, and only kicked in after 85 percent of the building’s costs were raised. That bought him time, as the costs ballooned, with Bloomberg footing most of those additional bills.

Ronald also still owns 100 percent of what’s left of Vericast—an old-fashioned check-printing business and a “financial solutions business,” whatever that means. For a while, Vericast was in a fight with its largest creditor, Chatham Asset Management, which in 2022 offered to buy Vericast in exchange for $2.85 billion, the amount of the company’s debt, which would presumably have left nothing for Ronald.

But he seems to have won a reprieve when, earlier this year, Vericast sold its Valassis digital marketing business to R.R. Donnelley in exchange for the extinguishment of $1.2 billion of its debt, leaving it with $1.7 billion in debt and a ratings upgrade from S&P, to B- from CCC. S&P estimated that Vericast’s debt-to-EBITDA ratio would be 5x by the end of 2024, down from 7x a year ago. So maybe things are looking a bit better for Ronald at Vericast.

As for his once-robust set of luxury assets, I’m told Ronald is down to just a few. As my partner Eriq Gardner reported earlier this year, between 2020 and 2022, Perelman sold 71 works of art for some $963 million and then repaid his creditors $910 million of that sum. The works he sold comprised some of the best pieces by artists including Brice Marden, Cy Twombly, Constantin Brâncuși, Joan Miró, Ed Ruscha, Egon Schiele, Gerhard Richter, Roy Lichtenstein, and Mark Rothko. He still owns the Creeks, once described as “the most important house in East Hampton,” although he’s tried to sell the 57-acre estate, at least in the past, for as much as $180 million. (He sold his other beachfront home in East Hampton for $84.5 million in 2022.)

He has also, for years, been trying to sell his 10-bedroom townhouse at 36 East 63rd Street, but a sale continues to prove elusive at the listed price of $60 million. I’m told he hasn’t lived there for five years, anyway. Instead, he lives nearby in a duplex penthouse apartment at 27 East 62nd Street, above the Fleming by Le Bilboquet restaurant, of which he is a co-owner.

Ronald is now 81 years old. (His birthday, which he used to celebrate with a big party on his yacht in St. Barts, is New Year’s Day.) His health seems to fluctuate, I’m told, but he seems to be doing better these days. He does have longevity on his side; his father, Raymond, a buyout mogul in his own right, died in 2019, age 101. And at the moment, the wolves seem to be at bay. “I don’t think anybody’s banging on his door,” one longtime Perelman watcher told me. “I don’t think that kind of financial pressure exists on him right now, but I also don’t think that he has any bandwidth.”