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LARGE FIRMS • May. 10, 2004 Safe Deposit Alan Rothenberg has left his mark on the legal and sports scene. Now, investors say Rothenberg's big name will draw customers to his new , which caters to lawyers.

By Amy K. Spees Law firms that decide to carry their bundles of cash over to 1st Century Bank aren't just getting a financial institution that caters to attorneys. They're putting their money into legal luminary Alan I. Rothenberg, the face behind the newly opened bank. Rothenberg, chairman of 1st Century, is the co-founder of Manatt, Phelps & Phillips, one of Los Angeles' prestigious law firms, and a creator of modern-day . He's a former head of the State Bar and a past partner at megafirm Latham & Watkins. "There are very few people that could run a soccer league, run an Olympics, be a major player in a major law firm and then start a bank," says Thomas Girardi of Girardi & Keese. "Alan is an exceptional human being." Rothenberg is the force behind the new bank, which aims to fill a niche for lawyers and law firms that banking experts say is neglected. "He's got a huge base in the community of people who know and respect him," says Mike Hennigan of Hennigan, Bennett & Dorman, a bank investor. "If anyone will be able to build a bank out of this community, it's Alan Rothenberg." Rothenberg has been off to a good start. To get his bank off the ground, Rothenberg hit the pavement and personally solicited 450 investments, generally from friends, associates and colleagues. "Significant investments came from my friends and colleagues, so I have a huge sense of responsibility to do everything I can to make the bank a success," Rothenberg says. John Emerson, president of Capital Guardian Trust Co.'s personal investment management division, says Rothenberg's reputation enticed him to invest, and he hopes it will attract customers, as well. "He has a wealth of friendships and relationships to people who cut across the business world and the spectrum of L.A." says Emerson, touting Rothenberg's can-do attitude. "He's keenly aware of meeting clients' needs but obviously in a way that's responsible to the bank's shareholders." Hennigan says he's banking on Rothenberg's reputation for business success. As long as Rothenberg was going to be actively involved in the operations of 1st Century, Hennigan was willing to invest, he says. Rothenberg's $34 million fund-raising drive generated so much interest that the bank raised more money than federal regulators allowed - and had to give $7 million of it back. Among the legal notables on the bank's 108-member founders list are Randall C. Bassett and Paul Tosetti from Latham & Watkins, Kendall R. Bishop from O'Melveny & Myers, Alan Browne from Browne & Woods and Steven Burkow from Ziffren, Brittenham, Branca, Fischer, Gilbert-Lurie & Stiffelman. Additional founders include Scott M. Kalt of Jeffer, Mangels, Butler & Marmaro and Charles T. Mannatt from Mannatt, Phelps & Phillips. Rothenberg says he opened the community bank to promote personal service to midsize businesses generally neglected by large . 1st Century also will serve as a private bank for business professionals. "We're not targeting Fortune 500 companies. The megabanks take care of them," Rothenberg says. "But we're not looking for regular consumers either." Richard S. Cupp, 1st Century's president, declined to disclose names of specific clients, saying that divulging that information without the client's permission would be improper. Rothenberg's understated Century City office features photos of the attorney with George Bush Sr., Bill Clinton, Oprah Winfrey and even Pope John Paul II. The shelves behind his desk are filled with souvenirs from international travels and soccer memorabilia signed by sports legends like soccer star Pelé. Rothenberg grew up in , where he and his wife, Georgina Rothenberg, a sculptor and jewelry designer, met in junior high school. He says he's never lost his Midwestern sensibility. Personal relationships are a key to business success, according to Rothenberg. "When you ask people who their banker is, they stare at you and say, 'You know, I don't really know,'" Rothenberg says. Banking and investment specialist Jean Tardy-Vallernaud, managing director of JTV Financial Source, a private investment firm in Santa Monica, says 1st Century's goals set it apart from the pack. Lawyers as a specific industry can be hard to serve, Tardy-Vallernaud says, but profitable if a bank does it right. For five years, Tardy-Vallernaud was the managing director for the private banking division of in Los Angeles. At Citibank, which has marketed its services to the legal community for 30 years, Tardy-Vallernaud served the financial interests of 2,000 lawyers and 100 law firms. Tardy-Vallernaud says billable hours give the legal community more time constraints than other small businesses. Ideas like extended business hours, lunch meetings or bringing banking services to an attorney's office, so as not to interfere with billable time, are important when serving the legal community, he says. Rothenberg says 1st Century plans to offer all these services. The bank also will provide credit lines to firms and partners and fund capital to law firms. Rothenberg says serving the legal community is not necessarily difficult if a bank understands its clientele and is committed to their needs. He notes that the large banks that serve law firms target only larger "megafirms," the highest tier in the legal market. "Some large banks have active programs, but pretty much targeted primarily at the megafirms, not medium or small firms, local offices of out of town firms or sole practitioners. We will," Rothenberg says. "Our unique knowledge of the profession enables us to understand firm, individual partner and associate needs as well as clients." Larry Feldman, partner with the Century City office of Kaye Scholer, is not a 1st Century investor but says he thinks the bank is a great idea. "Other banks have tried it in the past and have had success," Feldman says. "Catering to law firms, lawyers and other business professionals is a real niche in the banking industry." According to its 2003 report to banking regulators, the bank's typical loan customer will be businesses with secured credit needs of less than $2 million - in other words, small businesses that don't need large loans. Rothenberg says he realized the idea to create a community bank struck a chord when the bank raised too much startup capital in just a month - over the holidays. "December 23 is not the best time to be asking people for money," Rothenberg says. But by late January, with $34 million, the bank was oversubscribed. 1st Century's goal was to raise between $19 million and $22 million, and the bank had to get special regulatory permission to increase its objective to $26.4 million. The Office of the Comptroller of the Currency, a regulatory body much like the Securities and Exchange Commission, allows for a 10 percent to 20 percent overallocation when a bank makes its initial public offering. Anything more than that amount would mean writing a new prospectus and refiling the application, so the bank returned $7.4 million in additional funds to investors. Tardy-Vallernaud says that, in the past, community banks with startup capital of $7 million to $12 million have been seen as a force to be reckoned with, so 1st Century is off to a good start. Rothenberg called on his old firm, Manatt, Phelps & Phillips, for legal work to help get the bank off the ground. Partners Mick Grasmick, Craig Miller, Jeff Mannistow, Marty Steere, and associate Renee Rayfield worked on the matter from Manatt. Paul Irving, managing partner for the Los Angeles office of Manatt Phelps, says that Rothenberg was integral to the development of the firm's litigation practice and that the firm is happy to have 1st Century as a client. "It's sort of a homecoming for Alan, and we were pleased to have the opportunity to do work for him," Irving says. Rothenberg isn't a newcomer to the world of finance. In 1973, he was an organizer and sat on the board of directors of First Los Angeles Bank, which was sold to an Italian bank, Istituto Bancario San Paolo di Torino, for $56.1 million in 1982. Rothenberg was also a board member for the Bank of Newport from 1974 to 1993. Rothenberg has created a diverse board of directors for 1st Century, something he's been known for in other business ventures. Richard S. Cupp is serving as the bank's chief executive officer. He has 40 years in commercial lending experience and has served as an executive at First Interstate Bancorp and Federal Bank. The bank's board includes Christian Bement, president and CEO of Earl Scheib Inc., which has 126 auto paint shops in 25 states; Dave Brooks, president and CEO of Mara Escrow Co. of Beverly Hills; and Joanne Corday Kozberg, regent of the University of California and partner-in-charge of the Los Angeles office of California Strategies, a public affairs consulting firm. "1st Century Bank as a startup is very significant," Tardy-Vallernaud, who is not an investor, says. "It will have a competitive advantage if only from the strength of the people that have backed it up so far in terms of capital. It is already very well connected." Rothenberg retired from Latham & Watkins four years ago, but, at 65, his career hasn't slowed. Sitting in his office one recent afternoon, he chuckled at the thought of retiring and patted a stack of books each as thick as a ream of paper. The books on his desk were regulatory materials for the 2010 World Cup, the international men's soccer championship. As if opening a bank weren't enough, Rothenberg's other major project has been helping Morocco secure its bid to host the event. Fédération Internationale de Football Association, the organizing bureau that governs the , has announced that the 2010 tournament will be held in Africa. But the location is yet to be determined, with the final decision expected May 15. Morocco will pay Rothenberg a bonus, reportedly several million dollars, if it gets to host the World Cup. News reports pit Morocco against South Africa as the top contenders for the game, which could mean millions of tourism dollars for the winning bidder. Egypt reportedly is trailing for third place with Libya and Tunisia bringing up the rear. Fédération Internationale de Football Association execs of France and Angel Maria Villar Llona of Spain have expressed support publicly for Morocco, but 22 members are left. Their votes will remain private until the committee meets in Zurich for its decision. Until then, Rothenberg will trek from Grenada, Spain, to Kuala Lumpur, Malaysia, giving presentations in favor of Morocco to soccer "congresses," governing bodies for soccer from global regions. Then, it's on to Zurich for the selection. "The purpose, of course, is to lobby for votes," Rothenberg says. "We make formal presentations to the Congresses and discuss the merits of our bid with the members of the FIFA Executive Committee." Morocco's bid stresses the country's infrastructure: its stadiums, hotels, air, rail and highway transportation systems, and its telecommunications and broadcasting capacities. Rothenberg says Morocco's selling points include its political stability, its leadership in Arab democracy and its tourist-friendly environment. The country has the highest life expectancy in Africa and isn't ravaged by AIDS, malaria and tuberculosis like most of the continent, he says. According to Rothenberg, the country also has a very low crime rate and is taking a leadership role in the war on terrorism. The Moroccan terrorists involved in March's Madrid train bombings had been expelled from the country and were operating in Europe, he says. "In addition, Morocco has a rich tradition in soccer," Rothenberg says. The country was the first from Africa to compete in the World Cup. It was the first African nation to advance to the second round of World Cup tournaments and the first African country to have one of its own, Said Belquola, referee the final match. But Morroco is up against stiff competition. South Africa's civil rights champion and former President Nelson Mandela and Archbishop Desmond Tutu are helping that country with its bid. It's what Rothenberg deems "the Mandela factor." "Unquestionably, Nelson Mandela is one of the truly heroic figures of the 20th century. He is admired by all, including me, and I'm sure the members of the FIFA Exco," Rothenberg says. "However, he is not a footballer, and the Exco will make its decision based on which country can best organize a successful World Cup." FIFA published an inspection report May 4 rating the five African nations that concluded South Africa had the capacity to organize an "excellent" World Cup, while Egypt's and Morocco's standings were labeled "very good." The organization said it was concerned that construction of three stadiums, which Morocco said four years ago were under construction, has not begun. In published interviews, Saad Kettani, president of Morocco's bid committee, says FIFA's report is full of discrepancies. Morroco has three completed stadiums, three under construction and another three slated to be built if the country wins its bid to host, Kettani said. Rothenberg is a proven World Cup success. In 1994, he served as chairman and CEO of the U.S. World Cup, which was played in nine stadiums from to California. With a $70 million surplus, it is the most successful tournament in FIFA's history. The event set records for total ticket sales, sponsorship, licensing revenue and worldwide television viewership. He repeated the feat in 1999 when the Women's World Cup was held in the for the first time. Rothenberg was also the CEO for soccer in the 1984 Olympics, held in Los Angeles. Peter Ueberroth, president of the Olympics that year, says he chose Rothenberg because the attorney knew soccer and how to work on a budget. "Leading up to the games, it became obvious that each sport needed a CEO, somebody to have total authority to run the sport," Ueberroth says. "[Rothenberg] had the soccer background, plus I knew that he had the executive talent and total integrity to take on a very complex sport." Soccer matches for the 1984 Olympics took place in three states with multiple games, Ueberroth says. "[Rothenberg] sold out the , with small countries playing each other. For soccer, it's never been seen before or since," Ueberroth says. With his extensive soccer experience, one would think Rothenberg has childhood stories about playing on a local team, tales of coaching his kids' soccer tournaments, or a near miss at Olympic tryouts. He doesn't. Rothenberg was introduced to the sport as a lawyer and only since has become its biggest fan. He got his first exposure to soccer just after he left an associate position at O'Melveny & Myers to help found Manatt, Phelps, Rothenberg & Phillips. , who was seeking in-house counsel for his cable television franchises, contacted Rothenberg after a partner at O'Melveny recommended the attorney. The company, Jack Kent Cooke Inc., merged into TelePrompTer and is now part of Westinghouse. Cooke, who died in 1997, also was the owner of the Los Angeles Forum, the basketball team, the Los Angeles Kings hockey team, the Washington Redskins football team and the Los Angeles Wolves soccer team. Rothenberg left Manatt Phelps, the firm he had just helped to start, to go work with Cooke in 1967. His new boss handed him the Wolves, a struggling soccer team, to manage. "He just sort of said, 'Look after this for me,'" Rothenberg says. "I had never played soccer. I'd never even seen it played, and now I was general manager of a soccer team." The Wolves was an English team imported to become a member of the United Soccer Association, one of two American leagues trying to get off the ground at the time. The other league was the National Professional Soccer League. Without a major fan base, neither league made it very far, and the leagues merged to form the North American Soccer League at the end of the 1967 season. Rothenberg says the Wolves lasted two years, winning the 1967 championship against the Washington Whips, before Cooke decided to pull out of the league. The North American Soccer League hung on but couldn't score a goal with the average American fan until 1973, when there was a push to draft American players. Seeing an 18 percent average increase in attendance from 1972 to 1973, Rothenberg, who had helped found the league, decided to give soccer management another try. He took on a chairmanship role for the Los Angeles Aztecs, an expansion team that joined the league in 1974. Rothenberg signed on just in time for the league to take off. In 1975, celebrity player Pelé signed a $4.5 million contract with the New York Cosmos, which drew international attention to U.S. soccer. The league expanded to 24 teams in 1978, but spiraling costs began to take their toll. "We just couldn't quite practice enough law to cover our losses," Rothenberg says. Attendance continued to rise. But by 1981, most teams admitted to financial problems. The league went under in 1984. The United States wouldn't see another viable soccer league until 1996. The United States Soccer Federation, founded in 1913, elected Rothenberg president in 1990. To win the U.S. bid for the 1994 World Cup competition, the federation promised the Fédération Internationale de Football Association it would create a Division 1 soccer league in the United States. "Undoubtedly, the success of the 1994 World Cup created a level of enthusiasm that enabled us to raise the investment capital needed, secure a television contract and a healthy body of blue-chip sponsors, all of which were essential to a successful launch of Major League Soccer," Rothenberg says. In forming the league, Rothenberg brought together $100 million in investments from notables such as Phil Anschutz, Lamar Hunt, Robert Krat, John Kluge, George Soros and Stuart Subotnick. He negotiated television contracts with ABC and ESPN and secured sponsors like Nike, Adidas, Reebok, MasterCard, Honda, Anheuser- Busch, Fuji and AT&T. Major League Soccer has 10 teams. Some countries where soccer is more popular have twice as many: England's Premier League, France's Le Championat and Spain's Primera Liga all have 20 teams, and Italy's Series A and Germany's Bundesliga both have 18 teams. Though attendance is climbing slowly, league investors renewed their commitments to the organization for another five years in 2002. Despite Rothenberg's intense involvement, soccer hasn't been a full-time job for him: For much of the past several decades, he maintained a thriving law practice. After graduating from the Law School, Rothenberg began his legal career in 1963 at O'Melveny & Myers. He moved to what is now Manatt, Phelps & Phillips in 1966, becoming managing partner after he returned to the firm in 1968 from his stint with Jack Cooke. In 1990, he joined Latham & Watkins, retiring from there in 2000 and signing up with ADR Services. Rothenberg's legal career focused on business and commercial litigation, specifically banking, sports and entertainment law. While at Latham & Watkins, Rothenberg was integral to bringing the Los Angeles Staples Center to fruition. He was responsible for negotiating behind-the-scenes contracts for the sports-business side of the project, including negotiating the Clippers' and Lakers' leases. Rothenberg also served as president of the from 1982 until 1989. He was executive producer for the Broadway rock opera "Tommy," as well as executive producer of the film "With Honors." Rothenberg was also an ESPN "Sportslook" commentator from 1981 to 1990 and served on the National Basketball Association's board of governors. Rothenberg is also the chairman of Premier Partnerships, a sports and entertainment marketing firm in the same Century City building as 1st Century Bank. With clients like the National Basketball Association, the Los Angeles Clippers and Major League Soccer, the consulting firm has offices in New York and Los Angeles, with a Midwestern location slated for development. Rothenberg says he hopes to steer both companies into success. He and the bank's board of directors have discussed expanding the bank, possibly opening branches in Mid-Wilshire and Newport Beach. Rothenberg hopes the bank will be a billion-dollar-plus venture one day. But Rothenberg says his wife, three sons and four grandchildren will play the most important roles in his future. "I hope to spend lots of time with my wife, children and grandchildren," he says.

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