Wang files for bankruptcy protection Company founder's lasting legacy: life of philanthropy

August 19, 1992|By Boston Globe

BOSTON -- Wealth never meant much to the late An Wang, who owned two suits, both gray, even though he was worth billions. It's a lesson his heirs might find useful as they confront a sharp downturn in the family fortune.

And yet, the Wang legacy -- if not the financial future -- was made secure by the millions of dollars An Wang gave away during his company's years of plenty.

As Wang Laboratories Inc. enters bankruptcy protection, there are two ways to look at the fate of the Wang family: First, the value of their stock has fallen 97 percent from its peak, and second, they're still rich.

Wang family stock, once worth $1.6 billion, is now worth $50 million. If the company emerges from bankruptcy court, there is no telling how much -- or how little -- it will be worth. An Wang died in March 1990, leaving most of his estate to his wife and three children.

Even before his death, it was a long, hard fall. Three decades after earning $3,253 in his first full year in business, An Wang in 1982 was named the richest man in New England by Forbes magazine. At that time, he and his family had holdings estimated at $620 million.

But he didn't stop there. In a little over a year, Forbes estimated the family's stock in the company to be worth $1.6 billion; some observers said the family's wealth topped $2 billion. Either way, An Wang placed fifth on the Forbes list of wealthiest Americans and was no doubt one of the world's wealthiest men.

Briefly, at least. The fall came quickly and steadily over the next few years, as the company missed the boat on personal computers and An Wang held fast to the idea that his elder son, Frederick, should run the company, despite questions about his ability.

As the company's fortunes plummeted in the late 1980s and early 1990s, so did the family's wealth.

The family now has company stock worth roughly $50 million, according to documents filed with the Securities and Exchange Commission.

Some outsiders say family members would be far better off had they listened to advisers and diversified their holdings.

"Lorraine Wang [An Wang's widow] and family didn't understand the stock values of the business," said John Cunningham, former president of the company, who left in a dispute over Frederick Wang's promotion.

By contrast, Mr. Cunningham owned several hundred thousand shares of the stock, most of which he sold in May 1983, when the stock was at 41 7/8 . The same shares were selling for 75 cents earlier this week.

Although the Wang fortune is not what it once was, the Wang family and business associates say there is still plenty of other money salted away elsewhere, by some estimates several hundred million dollars.

"They won't be running any testimonial dinners for them," said a longtime business associate who spoke on the condition of anonymity.

Although the family's fortune was not as long-lasting as the Rockefellers', the monumental philanthropy of An Wang should be a more permanent legacy than his company.

As the company's fortunes soared in the early 1980s, so did the number of ways Mr. Wang found to give away money to educational, medical and artistic institutions. For several years, he gave more to charity than he earned.

In 1983, Mr. Wang donated $4 million to save the old Metropolitan Center in Boston's theater district, renamed the Wang Center for the Performing Arts. He gave $6 million to create the Wang Institute of Graduate Studies on the site of the old Marist Brothers seminary in Tyngsborough, Mass.

Paul Schervish, director of the Social Welfare Research Institute at Boston College, who conducted a three-year study of wealth and philanthropy, said Mr. Wang's approach to charity fit the mold of great philanthropists.

Rather than contributing to existing causes or institutions, they create their own -- and often name them after themselves -- as a way of leaving their mark.

Mr. Wang's money also went to places he couldn't claim as his own.

He gave $4 million to Harvard University, $1 million of which was earmarked for the John K. Fairbank Center for East Asian Studies. There was $4 million to Massachusetts General Hospital. Mr. Wang alsospent more than $15 million to situate in Boston's Chinatown a computer-assembly plant that never lived up to expectations of providing high-paying jobs to Asians.

His generosity was in keeping with his belief, expressed in his autobiography, "Lessons," that "corporate behavior should be judged by the same standard as personal behavior."

He condemned competitors who believed "that a corporation should be an amoral instrument, a money machine that maximizes its profits" to the exclusion of all else.

Wang Laboratories, in the end, was not a money machine. But no one ever questioned An Wang's personal behavior.

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