What’s The Biggest Check Ever Written?

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splits: 24

What’s the most important verify you’ve got ever written? The largest verify most individuals will ever write might be a couple of thousand {dollars} to cowl first/final months lease and a safety deposit for an condo. Any bigger quantity, like a down cost on a house, is normally wired electronically.

The similar goes for the enterprise world. A enterprise will lower checks for worker salaries and perhaps some smaller enterprise offers, however for larger transactions an digital wire is by far the popular technique.

However, there have certainly been some very massive checks written through the course of contemporary monetary historical past, from the tens of millions to the lots of of tens of millions of {dollars}. So what’s the single largest bodily verify ever written? To search out out, we have to journey again in time a bit…

October 2008

It is October 2008. The world is reeling from an out-of-control monetary disaster. The complete world financial system was in a free fall. Banks that weeks earlier had been thought-about among the many most dependable and steadfast establishments within the company world, had been perilously near insolvency. Lehman Brothers had simply failed and Bear Stearns was acquired for pennies on the greenback.

After which there was Morgan Stanley.

By all accounts, Morgan Stanley was the following in line to go below. Determined to stop their demise, executives from Morgan Stanley reached out to a number of massive overseas entities for a lifeline that might shore up the financial institution’s funds and present traders the financial institution would survive.

Morgan Stanley flirted with a state managed Chinese language financial institution for a time, however in the end discovered a possible match with Mitsubishi UFJ.

The drawback was urgency. Investor confidence had decimated Morgan Stanley’s inventory value from practically $60 a share to lower than $10, and there did not seem like an finish to the ache in sight.

“Too unhealthy you may’t simply write a verify!”

Groups from each corporations held an emergency assembly over Columbus Day weekend in October 2008. After 48 straight hours of negotiations, the 2 sides had a deal labored out and a remaining price ticket. Mitsubishi would make investments $9 billion into Morgan Stanley in trade for a 21% possession stake and a ten% annual dividend.

Below every other circumstances in current monetary historical past, a $9 billion transaction could be made entire through an digital wire from one financial institution to the opposite.

That is the place the negotiating groups hit a wall.

#1) First off, it was a vacation weekend and banks could be closed in each international locations till Tuesday.

#2) Secondly, wiring any amount of cash normally takes 2-3 days and Morgan Stanley could not have survived one other 24 hours.

#3) Third, Morgan Stanley was itching to make a proper announcement of the merger as quickly as potential as a way to cease their inventory value from plummeting any additional.

Determined for an answer to the $9 billion drawback, one of many Morgan Stanley deal makers joked “too unhealthy you may’t simply write a verify!

Each groups erupted in laughter. However then, a couple of minutes later, one of many prime Morgan Stanley executives made the astonishing realization {that a} verify truly may work.

If Mitsubishi had the funds to cowl a $9 billion verify, there was no motive why Morgan Stanley could not settle for and deposit it earlier than the markets opened Tuesday morning. From an accounting/regulation standpoint, a paper verify “checked” all of the bins that allowed Morgan Stanley to formally announce the merger and hopefully reverse their deteriorating inventory value.

The Japanese staff shortly left to name the house workplace and analysis their capabilities. As luck would have it, Mitsubishi UFJ did certainly maintain sufficient of a checking account stability to cowl and clear a $9 billion verify.

After a couple of hours of telephone calls and preparations, the Mitsubishi bankers returned to Morgan Stanley’s headquarters with a verify for $9 billion. That is the quantity 9 adopted by 9 zeros. Eleven zeroes should you rely the pennies. It was, and nonetheless is, the most important verify ever written.

Here is a photograph of the particular verify:

Morgan Stanley instantly introduced to the world that they’d a finished deal.

On Tuesday, their inventory surged 85% from $9.68 to $17.92. Right this moment Morgan Stanley’s share value is above $100. The firm’s market cap is $190 billion. In order that $9 billion funding for a 21% stake has was $40 billion not together with dividends!

All because of a paper verify.


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