How Purcell Lost His Way

By Emily Thornton

UNEASY TRUCE. Unable to agree on a possible deal, the management committee resolved simply to try to improve the firm's operations by better integrating the Morgan Stanley and DeanWitter businesses. Purcell went along with the committee's decision. He told the July board meeting in London that he planned simply to manage Morgan Stanley's existing businesses better, according to several people briefed on the meeting. But the group failed to resolve how that would be achieved or what the firm's ultimate goal should be.

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The truce lasted little more than four months. On Dec. 9, Scott Sipprelle, a former managing director who is now a hedge-fund manager, sent Purcell and the board a letter that called for breaking up the firm. Within four days, Purcell recruited his old boss at Sears Roebuck & Co., Edward Brennan, to rejoin the board, which was already packed with loyali