Quadrangle was founded by in 2000 by Steve Rattner, formerly a general partner specializing in media at Lazard Freres. It eventually came to control funds and assets worth $6 billion at its height in 2005. Since then, this figure has dwindled to about $2.5 billion, according to the New York Post, which first reported the story.
Rattner left in February 2009 to serve as a special advisor to the U.S. Treasury during the auto industry crisis. As the firm unwinds, co-founder Joshua Steiner will scale down his involvement, and managing principal Andrew Frey will leave by the end of this year.
By some estimates, Quadrangle peaked and began to decline after the acquisition of Alpha Media, publisher of lad mags Maxim, Stuff and Blender, from Dennis Publishing for $245 million. This highly leveraged transaction, coming not long before the global credit crunch, resulting from the subprime mortgage meltdown, soon went sour.
Stuff and Blender were closed amid steep declines in ad pages, Kent Brownridge resigned his post as publisher in August 2008, and in November 2008, creditors including Cerberus Capital Management and Credit Suisse revealed that Alpha had violated debt covenants. In July 2009, Alpha and its sole remaining title, Maxim, were handed off to Cerberus after Quadrangle couldn't make scheduled payments servicing a $100 million loan from Cerberus.
Since then, Quadrangle has come under fire for alleged corrupt kickback dealings involving the New York State Common Retirement Fund, leading to separate probes by New York State Attorney General Andrew Cuomo and the Securities and Exchange Commission.
Rattner settled with the SEC, but was slapped with two lawsuits by Cuomo last week, seeking $26 million in fines and a permanent ban on Rattner from the securities industry.