(FORTUNE Magazine) – On a cloudy afternoon last New Year's Day, Robert L. Edgell, 68, sat on the railing of the balcony of his Longboat Key, Florida, condominium and paused. The pavement was seven stories below. Then he jumped to his death. Although he had been in good health, Edgell Communications, the Cleveland trade publishing outfit he had formed in a leveraged buyout, was decidedly not. It was staggering under a mountain of debt. Convivial and hard-drinking, Robert Edgell had built a successful publishing career, rising to vice chairman of Harcourt Brace Jovanovich in 1985. An adept amateur magician and showman, he often kept colleagues and clients entertained until the small hours yarning and practicing sleight of hand. But growth is slow in trade publishing -- controlled circulation magazines for specialized audiences. So Edgell built up his division, HBJ Publications, by starting new magazines and newsletters, buying others, and diversifying. By 1986 he was generating close to $200 million a year in revenues and about $12 million in profits. Not bad for a guy who often worked out deals on the backs of cocktail napkins. The party moved into high gear in 1987, when Edgell caught buyout fever and decided to lead an LBO of HBJ Publications. The deal was the definition of hubris. The $334 million buyout was completed on December 31, 1987, and piled $285 million in debt and $45 million in preferred stock on a sliver of common equity. Most of the equity came from Kidder Peabody, the investment bank that put the deal together and ended up owning 70% of the company. According to Richard Swank, now Edgell's chief executive, Robert Edgell and his group paid $100 million too much. In its entire existence, HBJ Publications had never thrown off more than $30 million of cash in a single year. Interest expense in the first year of the deal alone was over $40 million. How could Robert Edgell have been so carried away? It was easy. Having built the company by canny acquisitions, he and everyone else in the buyout assumed the binge would go on. The dealmakers pushed most of the repayment expenses two and three years into the future by deferring interest and allowing preferred dividends to be paid with more preferred shares. Within months, Edgell Communications was in danger of breaching its credit agreement with GE Capital, its major lender, and had to rework its credit agreement. Then the advertising market softened, and Edgell's ad pages fell 3.9%. As the company crumbled, its Mandrake conjured one last rabbit out of his hat. In September 1989, he worked out a deal whereby United Newspapers, a British publisher, would buy the company. Though they would get no profit, all the investors in the Edgell LBO would have gotten out with their money intact. The board of directors thought the company was worth more and said no deal. Seven months later, as payments of principal began, escalating debt service by $10 million a year, Kidder helped ease Edgell out as CEO and intensified cost cutting. Dozens of employees out of a work force of 1,674 were let go, many of them Edgell's friends. In July the company defaulted on a $7 million interest payment on its bonds.

Edgell's behavior became increasingly bizarre. He started speculating wildly in stock options, telephoning a stock quote service literally hundreds of times a month, and losing money badly. Then, over several early mornings late last December while his wife slept late, he sat on the balcony of his Florida condo and recorded five audio tapes to his family and friends. The family has kept most of the contents private, but on one tape Edgell said it all: ''My way was wrong.''