Reno Gazette-Journal from Reno, Nevada on January 29, 1987 · Page 24
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Reno Gazette-Journal from Reno, Nevada · Page 24

Reno, Nevada
Issue Date:
Thursday, January 29, 1987
Page 24
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Tonight's tip iisme The Reno Advertising Club's annual Sheep Dip Show opens its three-night run at the Reno Hilton Opera House Theater. Tickets for tonight's cocktail show are $1 5 each. Details, 785-7100. 10B Thursday, January 29, 1987 Reno Gazette-Journal Late rally pushes Dow to record high NEW YORK Stock prices surged in a late buying spree Wednesday and pushed the Dow Jones industrial average to its 15th record-high close of 1987, capping a see-saw session caused partly by computerized trading. Wall Street's most widely followed indicator swung in a narrow range through most of the day but snapped out of that pattern in the last half hour and rose 12.94 points to a record 2,163.39. The Dow Jones industrial average has risen 267.44 points since the year began, an increase of 14.1 percent. Broader market barometers also shattered records. The New York Stock Exchange composite index rose 0.87 to 156.72, breaking the previous record of 155.97 set Jan. 22. The American Stock Exchange's market value index hit a new record at 299.49, up 1.66 from the previous high set Tuesday. Rail lease pact unveiled CHICAGO The Santa Fe Southern Pacific Corp. said Wednesday it has entered into a binding lease agreement with The Denver and Rio Grande Western Railroad Co. in hopes of securing Interstate Commerce Commission approval to merge two of its rail units. The ICC last July denied a petition by the parent holding company, Santa Fe Southern Pacific Corp., to merge two of its units, Santa Fe Railway and Southern Pacific Transportation Co., into a third subsidiary, the Southern Pacific and Santa Fe Railway. The ICC cited a potentially adverse effect on rail competition in turning down the merger petition. Tentative OK for PSA sale WASHINGTON - The Department of Transportation Wednesday tentatively approved USAir's acquisition of Pacific Southwest Airlines. The merger "is not likely to substantially lessen competition or to be inconsistent with the public interest," the department said in a statement. A USAir spokesman, Dave Shipley, said USAir was paying $17 a share or approximately $400 million to acquire PSA. PSA serves six states California, Oregon, Washington, Nevada, New Mexico and Arizona while USAir flies to 31 states in the Northeast and Midwest. New partnership planned LAS VEGAS Sahara Resorts announced Wednesday it will form a master limited partnership for the purpose of acquiring the hotel and gaming operations of the Sahara and Hacienda Hotels and Casinos. The new master limited partnership, to be called Sahara Casino Partners L.P., will sell a portion of the interests in the partnership in an initial public offering, with the majority ownership retained by Sahara Resorts. The proceeds of the public offering will be used to construct a new 575-room tower at the Sahara Hotel and Casino and to repay existing indebtedness. Sahara Resorts owns and operates the Sahara Hotel and Casino and the Hacienda Resort Hotel and Casino, both located in Las Vegas. Firm sets earnings record LAS VEGAS Neil Rosenstein, president of Jackpot Enterprises Inc., announced record results for the firm's second quarter and six-month period ended Dec. 31, 1986. Revenues were $6,621,000, up 44 percent from the same period in 1985. Net income increased 34 percent to $949,000, compared with $709,000 for the year-ago quarter. Earnings per share for 1986 were 20 cents vs. 15 cents per share in 1985. Jackpot is a route operator of gaming machines throughout Nevada. Sealed documents sought SAN FRANCISCO BankAmerica Corp. says it is trying to obtain confidential documents that First Interstate Bancorp filed with the Federal Reserve Board, in order to help repel First Interstate's hostile takeover bid of BankAmerica. A Fed official in Washington said Tuesday the request was being reviewed by the board's staff and that the board's secretary would decide whether to supply some or all of the documents to BankAmerica. Ticket giveaway halted NEW YORK A judge shot down a Continental Airlines publicity stunt Wednesday, saying a planned $100 million ticket giveaway would pose "a significant and grave risk to the health and safety" of New Yorkers. Continental had planned to use the 4,600-seat Felt Forum in Madison Square Garden to give free round-trip tickets to U.S. and overseas destinations to anyone who showed up between 6 a.m. and 6 p.m. on Feb. 1. The firm said it expected a crowd of 250,000. j Vire service reports Critics: Japan's auto The decision by Japanese automakers to continue voluntary import quotas at present levels will fail to cut the U.S. trade deficit and will cost American jobs, industry and political leaders say. Japan's powerful Ministry of International Trade and Industry has announced it would limit auto exports to the United States to 2.3 million vehicles in the year beginning in April. But U.S. officials said the Japanese should do more to lower their trade surplus, which reached $51.5 billion last year and is expected to reach $60 billion to $70 billion this year. In other developments: The United States claimed Japanese firms were selling semiconductor chips at unfair prices in other countries. Deputy U.S. Trade Representative Michael Smith also asked Japan to open its market further for U.S. semiconductor makers. The sharp fall of the dollar has helped Japanese banks replace United mi! J lifer h r 2- jmsxkTSi j vV If jsS RENOVATING: A welder works on a Reopening planned for Sparks' Gold Club By Lisa OvensGazette-Journal A local attorney and psychiatrist are sinking more than $40,000 into the vacant Gold Club in Sparks, hoping to open the casino early this summer. Attorney Kevin Mirch and Dr. Stuart Wyckoff recently began renovating the small casino at 1201 B St. into a restaurant-lounge-casino they hope will attract an upscale, local crowd. Although the new operators are practically gutting the first-floor interior of the 32-year-old building and putting in a small restaurant and piano loft, they still need a license from the Nevada Gaming Control Board. "The whole thing will be upgraded," Mirch said. "We're remodeling, hoping to get licensed . . . then we'll see what happens." Mirch said he was told by the control board his application would be considered as soon as possible. But Mirch doesn't think that will happen before May or June. The casino, just west of John Ascuaga's Nugget, is expected to Ex-employee of Boesky admits trading violations NEW YORK A former top trader of an Ivan Boesky-controlled company pleaded guilty Wednesday to a federal felony charge that he took part in a scheme to violate federal rules governing capital requirements of brokers. Michael Davidoff, at one time the head trader for Seemala Corp., a brokerage firm, admitted he had engaged in bogus security transactions with another broker, with the effect of showing that Seemala had sufficient capital to fulfill federal requirements. Davidoff s plea comes at a time when federal investigators, with Boesky's cooperation, are conducting a major investigation of illegal insider-trading on Wall Street. The securities industry has been awaiting further developments in the Boesky case, but federal prosecutors at the U.S. attorney's office in Manhattan would not comment late Wednesday when asked if Boesky gave information that implicated Davidoff. Matthew Power, Davidoff's attorney, said it was "important to note" Davidoff was not charged with insider trading. U.S. Attorney Rudolph Giuliani said Davidoff admitted that during a four-month period in 1986, he violated the law by trading for Seemala even though he knew the company's net capital fell far short of the minimum. In court papers, federal prosecutors said Seemala arranged the bogus securities sales with Seligmann, Harris & Co. Inc. Newsday I States banks as the most important national group in the sharply expanding international banking market, according to a survey by the Basel, Switzerland-based Bank of International Settlements. A survey of U.S. companies showed they agreed with the Reagan administration that the dollar's fall has had disappointingly little effect on the nation's huge trade deficit. The ministry said it was continuing the Voluntary Restraint Agreement on automobiles out of concern over rising sentiment for stiff laws to limit exports to the United States. Japan began limiting car exports to the United States in fiscal 1981 under strong pressure from Washington and the slumping American auto industry. The United States stopped asking for the restraints in 1985, but Japan decided to limit car shipments to the U.S. market to 2.3 million in fiscal 1985 and fiscal 1986. O 0 dji fir UJ' It '"--'Mi si'')" t ?l V second - floor sypport beam inside the Gold 'A 1 employ between 40 and 60 people when it opens. Historically a slot machine and keno haven, the new Gold Club plans to have two blackjack tables, a poker bar and more than 100 slot machines, Mirch said. Mirch and Wyckoff are leasing the property from owner Murray Dolan, with an option to buy. Mirch would not disclose the purchase price. The pair has leased the property since early September. Dolan, a prominent Sparks attorney, built the building in 1965 on property previously owned by his parents. His law office is on the second floor. He operated the casino until mid-1974 when it was leased by Richard "Pick" Hobson, owner of the Riverside hotel-casino in Reno, which recently closed its gaming operations. In 1978, Hobson subleased the casino to Eugene McCarlie, who ran the Gold Club until 1980. Dolan attempted to open it in 1982, but left it vacant. Asked why a 29-year-old attorney and Falling demand By Tim AndersonGazette-Journal Beef cattle industry experts said at a Reno seminar Wednesday that declining consumer demand for red meat will keep prices flat throughout 1987, frustrating operators who have been hoping for better days. The business outlook seminar was a highlight of the third day of the National Cattlemen's Association convention in Reno. The program is offered by Cattle-Fax, a suburban Denver-based national market service associated with the stockmen's organization. "This industry is going through some dramatic structural changes whether we like it or not," said Topper Thorpe, Cattle-Fax general manager. "Those who can adapt to these changes have a good future in the business. Those who don't face disaster." Thorpe and other staffers for Cattle-Fax emphasized that all major statistical factors that influence beef cattle operations supply, production, demand and prices will either be down this year or will parallel a sluggish 1986. "Normally, the supply situation we're facing this year would indicate better prices," Thorpe told the heavily attended session. "But it's not going to happen. Besides our problems with demand, there are so many other factors involved these days, including increased competition (from other meat and poultry producers), political i quota not enough Fiscal 1986 ends March 31. "The Japanese want business as usual, meaning they will take $60 billion or more out of this country, half of it in automobile trade, without any consideration for America's deficit problems," said Lee Iacocca, chairman of Chrysler Corp. "With this MITI announcement, we expect Japan's trade surplus to grow and more American jobs to be lost." Sen. Donald Riegle, D-Mich., said members of the Senate Finance Committee are working on a bill "to try to stop some of the abuses that are going on by Japan and other countries." "I think the Japanese are watching that closely, because they want to do just enough to reduce the pressure without really making much of a difference in terms of the size of the problem," he said. Sen. Carl Levin, D-Mich., said he introduced a bill that would require the presi- 1 ! J A ' Tom SpitzGazette-Journal Club casino in Sparks. a certified public accountant would want to take over the Gold Club, when many small casinos have faltered in recent years, Mirch said he's been involved in similar activities with clients and thought it was time to try it himself. "It'll be fun to see if this works as good for me as it has for my clients," he said. Mirch said he and his partner decided on the Gold Club because "it's easier to redevelop in downtown Sparks than in Reno." "The problem with a lot of places is they haven't kept up with their properties," he said, adding that the Gold Club will be "quite a nice place when it's opened." Despite the Gold Club's history of changing ownership and closures, Mirch said he sees no reason why the casino can't thrive. "You always have to be a little worried. But there are properties on the street that are doing well," he said, citing the Nugget and the Mint. expected to keep f r New cattlemen's association chief lists futures trading as key issue By Lisa OvensGazette-Journal The future of cattle futures and the 1985 federal farm bill are the top issues facing the 230,000-member National Cattlemen's Association, the group's new president said Wednesday. Jack Dahl, addressing many of the 5,000 participants at the association's Reno convention, also called for continuation of aggressive marketing to boost the industry's economic health. After the meeting, Dahl said it still remains for association members to rank their priorities in a mailed survey and that process won't be completed for at least two months. But the debate over whether cattle futures should be excluded from market trading has been among the top issues discussed at the 1987 convention. maneuvering and uncertain world events." While consumer expenditures on beef are expected to drop slightly again this year putting poultry consumption over beef for the first time Thorpe dent to take action against trading partners if they fail to "play fair." "Against the backdrop of our overall trade relations with Japan, this announcement doesn't amount to a hill of beans," Levin said. He said restraints on auto exports don't remove barriers against exporting U.S. products to Japan. Analysts and automakers agree that the U.S. market will shrink by as many as 1 million cars in 1987, so Japan's failure to lower the VRA limit means Japanese automakers will vie for a larger-than-ever market share. Maryann Keller, an industry analyst with Furman Selz Mager Dietz & Birney in New York, called the announcement a "non-event" that would do nothing to reduce the U.S. trade deficit with Japan because it no longer addresses the true problem, including the U.S. assembly of cars with imported parts. Wire service reports More immunity from lawsuits asked for state's corporate chiefs John RoIIap CARSON CITY The Senate Judiciary Committee was urged Wednesday to give corporate officers and directors greater immunity from lawsuits filed by stockholders and others. The testimony by a parade of lawyers came on two proposed measures to limit the ability of stockholders to sue corporate officers and directors for business mistakes. SB52 was drafted by former Secretary of State William Swackhamer and mirrors a Delaware law. SB6, introduced by Sen. Bill Raggio, is a compilation of other attempts to deal with the corporate liability issue. Judiciary Chairwoman Sue Wagner, R-Reno, said the panel will discuss both bills during a meeting Friday. She added that if there is a consensus on the committee a bill could be sent to the full Senate for action then. According to Wednesday's testimony, the growing number of lawsuits filed against corporate officers and directors has made it increasingly difficult for some corporations to recruit talented business people to sit on boards of directors. Russell Mix, an attorney representing Horn & Hardart Co., said without changes in state law, "composition of the boards of directors will be limited to hired management and majority shareholders, with no moderating influence from outside directors." Bob Marshall, attorney for Penzoil, also argued that because other states, notably Delaware, have already given corporate directors greater immunity, Nevada will fall behind in the race to attract new companies. "If Nevada truly wants to be a corporate haven, then we have to send a message to corporate America that this is the place to be," added Marshall. Pete Kelley, director of the Nevada Retail Association, told the committee the bills also may reduce insurance costs, adding, "This legislation also may be especially beneficial to small corporations which sometimes may not be able to afford heavy insurance coverage." While there was no outright opposition to either bill, Secretary of State Frankie Sue Del Papa said she is concerned about the bill's impact on minority stockholders. However, those testifying agreed minority stockholders would still be protected by existing law from obvious misconduct, and Mix argued that such stockholders would be better protected if directors are given immunity. beef prices flat The industry's concern centers on the cattle futures' worth and whether the market is "equally useful to all segments," he said. The General Accounting Office, Congress' investigative arm, already is investigating cattle futures trading. A preliminary report by the GAO was released earlier in the week at the convention by Rep. Kika De La Garza, D-Texas, chairman of the House Agricultural Committee, but it made no specific findings. He called the preliminary report "not much." De La Garza told a press conference he hoped the final report could be issued by July. Areas to be examined include price relationships between futures and cash markets, changes in cattle marketing and regulation of those markets, and the changing structure of the industry. said there are still some reasons for cautious optimism. He and others reiterated that the $1 per head "checkoff fee on the sale of cattle that will be used step up the promotion of beef products See BEEF, page 7B

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