Luby--a Success Story Plagued With Problems

A black stone plaque inscribed Maison Coq Hardy (House of the Bold Rooster) greets visitors at Roger Luby’s $3-million Newport Beach mansion.

The phrase--the name of a favorite restaurant in Bougival, France--is also characteristic of the 52-year-old entrepreneur, whose life is a classic self-made success story.

Luby was thrust into the news Monday when he and his girlfriend, Aissa Wayne, daughter of the late actor John Wayne, were beaten and slashed by two men who followed them through the gate of Luby’s home.

Known in Newport Beach society for lavish parties complete with strolling violinists, Luby owned a second home in Palm Springs and traveled in glittering social circles as a governor at the exclusive Balboa Bay Club.

Rising from modest beginnings as the eldest of four children in a Fontana family, Luby parlayed a small mortgage banking business into millions. But he suffered a devastating setback last year, when the collapse of a $56-million redevelopment project forced him into bankruptcy. About the same time, he was separated from his third wife, who later filed for divorce.

Reached at home Thursday, where he is recovering from the attack, Luby said he is “very angered” but declined to talk about the assault.

“I’d like to say more (about what happened), but I can’t now on advice of my attorney,” said Luby, an avid tennis player whose right Achilles tendon was cut by the two men. “I’m on crutches and I’m in a cast.”

Pilar Wayne, who said her daughter, Aissa, was improving after plastic surgery to stitch up a deep gash over her right eye, said Thursday that she remains “baffled.”

“I really wish with my heart that I had some lead,” she said during a telephone interview.

The apparently professional assault has been the subject of speculation in Newport Beach and far beyond, grabbing local headlines and, according to Luby, drawing reporters from the National Enquirer, who have staked out his estate. In addition to Luby’s marital problems, Wayne is in the midst of a child custody battle with her second husband, orthopedic surgeon Thomas Gionis.

Newport Beach Police Detective Sgt. Mike Jackson said Thursday that investigators were still sorting out clues. Elements of the attack lead authorities to believe that it was not random--that Luby was targeted by gunmen who first asked him if he was Roger Luby and chose to injure him in a way that would cripple his tennis game.

“We’re going in about five different directions right now,” Jackson said. “We haven’t ruled out a thing.”

Although Luby declined to discuss his background, interviews with more than 20 friends, family members and business associates detail the career of a man who rose from middle-class obscurity to Newport Beach society.

“Roger has done it all on his own,” said Horace Coil, a friend and Newport Beach attorney who has represented Luby. “He’s a real Horatio Alger success story.”

The son of a steel company manager, Luby was born in 1936 and grew up in Fontana. His career took off after he graduated from Cal Poly Pomona with a degree in business administration in 1962, and went to work with his friend, Frank O’Bryan, at a small mortgage company founded by O’Bryan’s grandfather in San Bernardino.

The company, Western Pacific Financial Corp., rode the tide of development in Orange County and Luby rose to president. Western Pacific was sold for $16 million in 1979 and, through a series of mergers, became known as Shearson/American Express Mortgage Co.

Luby made millions in the process, and stayed on as a vice president until 1984. After more than 20 years of financing development deals for others, Luby left to try it on his own.

His initial development ventures--all with partners--were extremely successful and included the $1-million remodeling of an aging strip shopping center at Coast Highway and Superior Avenue in Newport Beach. Those early successes apparently gave Luby the confidence in May, 1984, to launch a solo project--the rehabilitation of the historic Broadway department store at Broadway and 4th Street in Los Angeles.

The ambitious project seemed a sure thing, according to business associates and investors. But the deal to remodel the empty store into an office complex called “Broadway Centre” crumbled when a consortium of 32 Oklahoma savings and loans, known as SISCORP, reneged on an agreement to provide $56 million in financing, according to a suit that Luby filed earlier this year against the banks. With the building largely gutted and reconstruction under way, Luby was faced with a $16-million shortfall that shut down the project.

Luby tried to raise money through personal loans while he attempted to persuade investors not to pull out. Dick Lane, president of Chris Weil & Co., a Glendale-based investment broker, recalled a December, 1985, meeting with brokers at which Luby insisted the project might still succeed.

“Luby made a decent presentation. He argued that investors should not opt for recision (a refund),” Lane said. “He said that if a certain percentage elected not to back out, the project would go through. Apparently not enough stayed in.”

Because Luby had staked his personal finances in the project, he was forced to declare bankruptcy last year, according to Nancy C. Hseih, his attorney in the bankruptcy proceedings. Lawsuits totaling more than $5 million filed by the former owners of the Broadway property and the contract architect are on hold pending resolution of Luby’s suit against SISCORP and his bankruptcy case.

The SISCORP suit is expected to go trial in Oklahoma in December.

“Roger could have accepted Broadway Centre better if he had made a bad business decision and lost money because of that,” said Thomas Sutherland, a close friend and owner of Thomas J. Sutherland Investment Management Co. “But he never got the chance to see whether it was a good decision or not.”

Despite his career successes, Luby suffered several personal problems, according to friends and family members. Luby and his first wife, Theresa, had two sons, Shane and Mark, before their divorce in the 1970s. His second marriage, to Kathleen Luby, ended in divorce in 1980.

He was married to Sandra (Sassy) in November, 1981. She filed for divorce in July, 1987--the culmination of an estrangement that friends said was brought on, in part, by the couple’s financial problems.

“Roger doesn’t really talk about the divorce,” said Beverly Thompson, a Newport socialite who said her close friendship with Luby extends back more than a dozen years.

Sutherland and Thompson are among the wealthy and influential friends who have rallied around Luby through his recent problems and, especially, after the attack at his home. Luby’s son, Mark, a student at Northern Arizona University, returned home this week, and other callers have included Luby’s wife, Sassy.

“Roger is always up,” Thompson said. “When most people would be in the depths of despair, he says it will be better tomorrow. Of course, his life style has changed dramatically because of the bankruptcy--no more parties or travel. But he’s taken it in stride. Tennis was a great outlet through it all.”

Luby’s sister, Karen Krim of Thousand Oaks, said he had always been the leader among four brothers and sisters. Luby provided strong support for his siblings four years ago when a sister who had been hospitalized for treatment of schizophrenia committed suicide after being kicked out of an Orange County board-and-care home for violating smoking rules, Krim said.

Luby filed suit against the home and “avenged my sister,” Krim said, adding that the case was settled out of court last year for an undisclosed sum.

“He’s a wonderful, wonderful guy. . . . He never really made a bad business decision. This (attack) is a horrible, unfortunate thing.”