Meet Michael Lynch, personal banker.

The former Goldman Sachs ( GS) investment banker scored quite a coup when the Reader's Digest ( RDA) board decided to put itself up for sale last year.

Reader's Digest didn't just retain Lynch's former employer to find a buyer for the publishing company. In a highly unusual move, it also hired Lynch to hold its hand in the sale process.

Now Lynch stands to pocket a $2.75 million advisory fee, assuming Reader's Digest shareholders approve a proposed $1.6 billion buyout by private equity investors led by Ripplewood Holdings and Merrill Lynch ( MER). That fee comes on top of the $11 million fee being raked in by Goldman Sachs.

But Lynch clearly is getting the better end of the deal. While his former Goldman Sachs colleagues will have to wait until the end of 2007 to divvy up their bonus pool, Lynch is due to get his big fee at closing, which is expected as early as next month.

Better yet, he doesn't have to share his winnings with his current employers at GSC Group, say people familiar with the buyout. The $12 billion New Jersey-based investment firm, which employs Lynch as a managing director, hasn't asked for a split of Lynch's fee.

Reader's Digest, in a recent regulatory filing, says it retained Lynch because the banker had been the company's "relationship partner" at Goldman Sachs for many years. A person familiar with the situation says the Reader's Digest board felt Lynch knew the company better than any of the Goldman Sachs partners working with it in the buyout negotiations. Lynch retired from Goldman Sachs in 2005 before joining GSC as an executive this past June.

Lynch and Goldman Sachs are collecting their fees even though the Reader's Digest buyout is something of a bungled deal. Ripplewood is paying $17 a share for the Pleasantville, N.Y., company. But the private equity firm twice offered to pay $18.50 a share for the company before the board charged Goldman Sachs and Lynch with soliciting bids from other potential buyers. The lengthy negotiations with Ripplewood may have cost shareholders up to $150 million in a buyout premium.

Lynch did not a return a phone call to discuss his work for Reader's Digest. A spokesman for the publishing company, most famous for its pocket-sized magazine of useful household tips, declined to comment.

Reader's Digest shareholders might rightly wonder whether the fumbled auction process was the result of too many cooks working in the kitchen. Still, it's not unusual these days for companies to hire multiple advisers in a buyout or merger. The complexity of some acquisitions and the desire of some boards to have transactions vetted by an outside party are reasons why the negotiating table is getting awfully crowded.

But it is rare for an individual banker without any investment firm to back him up to serve as a deal adviser. Dealogic, a company that specializes in tracking corporate mergers, doesn't even keep tabs on the fees collected by individual bankers. That's largely because it's so uncommon. And when it does happen, the individuals involved are loath to disclose their fees, unless the company does it for them.

Maybe the best-known case of an individual banker advising a company on a deal occurred in 2005 when Wall Street wheeler-dealer Joseph Perella assisted UBS ( UBS) in selling credit card giant MBNA to Bank of America ( BAC) for $36 billion. MBNA's board tapped Perella a few months after he'd left Morgan Stanley ( MWD) to go out on his own. Perella and MBNA never disclosed his fee.

The plum assignment no doubt helped Perella open his Perella Weinberg Partners investment-banking advisory boutique last June.

There's no indication that Lynch is going to use his unusual payday as a similar launching pad. GSC Group, where Lynch is a senior managing director, doesn't do any merger advisory work. The firm was started by former Goldman Sachs trader Alfred Eckert, and it specializes in investing in distressed bonds and lending to midsized businesses.

Eckert and Lynch are among five Goldman Sachs alums heading up GSC Group, which used to be called Greenwich Street Capital. The investment firm, which runs a number of distressed-debt hedge funds, initially was part of Primerica, the money-management firm that famed financier Sandy Weill used to cobble together Citigroup ( C) in the mid-1990s.

For Lynch, the Reader's Digest payday will likely prove to be one-time event. But with merger and LBO market still going at full speed and Wall Street bankers always looking for greener pastures, it's likely Lynch will not be the last banker to fly solo on a deal.

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