Pondering a Berkshire Without Buffett

At the Berkshire Hathaway annual meeting, Warren E. Buffett rejected the notion that the company would go the way of Teledyne, a conglomerate that was broken up after its leader, Henry E. Singleton, stepped down as chief executive. Mr. Singleton, who might be called the Buffett of his time, decided Teledyne had become too big and unwieldy for a single manager to effectively oversee and expand, Andrew Ross Sorkin writes in the DealBook column. A breakup of Berkshire, “I’m convinced would create a poorer result,” Mr. Buffett said.

But Charles Munger, Berkshire’s vice chairman, acknowledged a truism: “You look at companies that got really big in the world, the record is not very good. We think we’ll do a little better than the giants in the past. Maybe we have a better system.” The question, Mr. Sorkin writes, is how much is “a little better”? As Mr. Buffett put it, “There’s no question that we cannot do as well as in the past, and size does matter.”

Following Mr. Buffett will not be easy. “Mr. Buffett’s successor will have to be not just a great investor and operator, which is difficult enough, but a legendary one that people will rally around,” Mr. Sorkin writes. “As time passes, and Berkshire looks more like the conglomerate that it is without the special ingredient that is Mr. Buffett, it is likely to become more challenging for his successor.”

BANK OF AMERICA AND MBIA SETTLE MORTGAGE DISPUTE  |  Bank of America has reached a $1.7 billion agreement to settle a long-running legal dispute with the bond insurer MBIA over mortgage-backed securities that grew troubled. Under the deal, announced on Monday, Bank of America will pay $1.6 billion in cash to MBIA and lend the firm another $500 million. The bank also acquired warrants that could give it a 4.9 percent stake in the insurer, which was in danger of being unable to meet its obligations in a few weeks’ time. The agreement cancels out the multibillion-dollar claims the institutions had against each other, dating to the financial crisis.

Shares of MBIA rose 45 percent on word of the settlement. Bank of America shares surged 5 percent.

In a separate matter, Bank of America faces a fresh legal headache. New York’s attorney general, Eric T. Schneiderman, plans to sue Bank of America and Wells Fargo over claims they breached the terms of a $26 billion settlement intended to stop foreclosure abuses. Mr. Schneiderman on Monday said the banks did not follow guidelines for fielding and processing requests from homeowners trying to modify their mortgages.

A BITCOIN BUTTONWOOD  |  A crowd of young men gathered on Monday in Union Square in Manhattan to buy and sell bitcoins, the digital crypto-currency. “The men – and there were only men – were brought together by an online posting from Josh Rossi, 31, a bitcoin aficionado who works in technology at the World Trade Financial Group,” Nathaniel Popper writes in DealBook.

Reasoning that the online venues for buying and selling bitcoins had become too expensive and time consuming, Mr. Rossi proposed what he called Project Buttonwood, a reference to where the New York Stock Exchange had its beginning in 1792. “If I want to buy a hamburger, I want to be able to sell my bitcoins and get my money immediately so I can buy that hamburger,” said Mr. Rossi.

ON THE AGENDA  |  Walt Disney and Whole Foods report earnings on Tuesday evening. The European Commission has a conference on economic and monetary reform. Bill Gates is on Bloomberg TV at 8:30 a.m. The SALT conference kicks off in Las Vegas.

‘MAD MEN’ AND CORPORATE FINANCE  |  The most recent episode of “Mad Men” provided a lesson in advertising agency deal-making, circa 1968, DealBook’s Michael J. de la Merced writes. (Warning to readers: spoiler alert.) The episode involves Sterling Cooper Draper Pryce’s weighing a potential initial public offering, and “banker proposes selling 400,000 shares to the public at $9 a share. Given Sterling Cooper’s existing 1.5 million outstanding shares, that would have valued the agency at $17.1 million — or about $114.4 million in today’s dollars,” Mr. de la Merced writes.

“By May 1968, when the episode is set, seven ad agencies had held initial stock offerings, according to Ad Age. Among them were Wells Rich Greene and Papert, Koenig, Lois,” Mr. de la Merced continues. “Behind the flood of offerings was the booming ’60s stock market, which prompted bankers to seek ever more companies to pitch to investors. Services companies like ad agencies became hot commodities, playing off the allure of Madison Avenue and its mad admen.”

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Antero Resources, Backed by Warburg, Said to Plan I.P.O.  |  Antero Resources, which is controlled by the private equity firm Warburg Pincus, could be valued at as much as $10 billion in an initial public offering, Reuters reports. REUTERS

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Friend of Former KPMG Partner to Plead Guilty in Insider Trading Case  |  Prosecutors unveiled charges in Federal District Court in Los Angeles on Monday against Bryan Shaw, a jeweler who has agreed to plead guilty to conspiracy to commit securities fraud after receiving inside information from a KPMG partner. DealBook »

Senate Passes Bill to Expand Tax Collection Online  |  The New York Times reports: “A bipartisan coalition in the Senate easily passed legislation on Monday to force Internet retailers to collect sales taxes for state and local governments, sending the issue to the House, where antitax forces have vowed to kill it. But the 69-to-27 vote in the Senate will give the measure significant momentum.” NEW YORK TIMES

S.E.C. Claims Harrisburg, Pa., Misled Bond Investors  |  The Associated Press reports: “The Securities and Exchange Commission on Monday accused Harrisburg, Pennsylvania’s debt-laden capital, of violating federal antifraud rules for securities issuers by repeatedly giving misleading information that created risks for bond investors as the city’s finances were rapidly deteriorating.” ASSOCIATED PRESS

On Wall Street, Recovering Money From Rogue Employees  |  SAC Capital is one of several firms seeking to insert provisions in employment contracts allowing them to recover compensation from employees who violate the law, Peter J. Henning writes in the White Collar Watch column. DealBook »

China’s Changing Internet Landscape  |  China was on vacation much of last week for the May 1 Worker’s Day holiday, but executives at two of China’s most important online companies were busy completing a deal that might reshape the country’s Internet, Bill Bishop writes in the China Insider column. DealBook »

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