`The System Was Perfect'

One day in May, 1989, Michael H. Borlinghaus, president of a small Wall Street trading firm, picked up an intriguing tip: Jerrico Inc., which owns a seafood restaurant chain, would soon be taken over by a New York investment group. He told his partner Heinz F. Grein and suggested their firm, Frost & Sullivan Holding Corp., acquire a position in Jerrico. Three months later, Jerrico agreed to the takeover at 24 1/4 a share, up from 16 when Frost & Sullivan started buying in.

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