Reno Gazette-Journal from Reno, Nevada • Page 18

Today's tip Patents, trademarks and copyrights will be discussed in a continuing education course from 8:30 a.m. to 4:15 p.m. in Room 101, University of Nevada-Reno business building. Fee is $165. 8B Saturday, February 28, 1987 Reno Gazette-Journal BUSINESS EDITOR: MIKE NORRIS.

788-6336 Judge upholds Bally's purchase of Jersey casino Stocks post small gain in quiet day NEW YORK The stock market struggled to a small gain in quiet trading Friday, capping off its second straight advancing month. The Dow Jones average of 30 industrials rose 7.31 to 2,223.99, reducing its loss for the week to 11.25 points. For February, the average recorded a 65.95-point gain on top of its 262.09-point upsurge in January. Friday's volume on the New York Stock Exchange slowed to 142.80 million shares from 165.80 million in the previous session. Analysts said investors were encouraged by the continued strength of smaller "secondary" stocks lately, even as many of the big-name blue chips have bogged down.

Golden Nugget would waste corporate assets and cause Bally severe financial distress. Gerry disagreed, saying in his ruling Thursday that the shareholders failed to prove both the sale and the stock agreement would cause irreparable harm to Bally. Greenfield said the shareholders would continue with their lawsuit seeking damages from the Bally board and Trump. Trump, who already owns two Atlantic City casinos, Trump's Castle and Trump Plaza, purchased 9.9 percent of Bally stock late last year, making him the largest single stockholder in the Chicago-based corporation. Bally announced Monday it had bought Attorney Richard Greenfield of Haver-ford, representing Bally shareholder Carol F.

Glassman of New York, asked Gerry to issue temporary restraining orders blocking the Golden Nugget sale and Bally's repurchase of its own stock held by Trump. Ms. Glassman owns less than 100 shares of Bally stock. Her suit has been joined by other shareholders throughout the country. Greenfield argued that the Bally board of directors breached its fiduciary responsibility to shareholders in reaching the agreement with Trump and allowing the New York developer to sell his stock at a price not available to other stockholders.

Greenfield also said the purchase of the back 2.6 million shares of its stock from Trump for more than $62 million in cash and other considerations in an agreement worth about $83.7 million. According to Greenfield, the repurchase plan amounted to greenmail, the practice of buying up shares of a company and selling them back for a profit at an inflated price. The Bally-Trump announcement came one day before attorneys for both gaming halls were scheduled to appear before Gerry in a hearing regarding Bally's pending purchase of the Golden Nugget from its Las Vegas-based owners. Trump filed suit against the sale, claiming it was devised to block a possible Trump takeover of Bally. CAMDEN, N.J.

(AP) A federal judge has refused to block the $440 million sale of the Golden Nugget Casino Hotel to Bally Manufacturing clearing the way for the deal to go through. U.S. District Judge John F. Gerry ruled against Bally stockholders in a suit seeking to stop the transaction. The judge also refused to order New York real estate developer Donald Trump to freeze the profits of a $83.7 million stock repurchase plan with Bally in a trust pending settlement of the suit.

The stock repurchase agreement, reached over the weekend, settled the latest round in the Boardwalk power struggle between Trump and Bally, who are rival Atlantic City casino owners. inflation soars, trade deficit swells Motel wins trademark suit LAS VEGAS The Mirage Motel has won a permanent injunction in its trademark infringement battle with the La Mirage Hotel and Casino. District Judge Michael Wendell issued the injunction this week, but granted a stay until the La Mirage can appeal the case to the state Supreme Court. Mirage Motel owner Allen Rosoff contends the La Mirage name is so similar that it is causing confusion among potential customers and costing him business. The La Mirage is the former Ambassador Inn east of the Strip.

The Mirage is a motel on the south end of the Strip. II mmmm ii it Kl mmm a is mmm i 2 is mm mm 111 Hi! ts eg IH it mm si 111! liBaigi Ml Bbhii Mi! 111 ii.amts WW mum HI an tzs ET3 FX' wn 13 Gas rate increase sought LAS VEGAS Southwest Gas Corp. asked the Public Service Commission on Friday for permission to raise residential service rates by an average of 17 percent. The company, which is also the wholesale supplier to Sierra Pacific Power cited higher operation costs and the construction of a new operations center in southern Nevada in asking for the increase. Southwest's request, which will be aired at a future PSC hearing, is for an average 13.5 percent increase to all its customers.

Residential customers, however, will be in for a 17 percent increase if the request is granted in full. 1 1 I Gas prices, Reagan policy blamed for bleak January WASHINGTON The economy suffered a double dose of bad news, with the government reporting Friday that January recorded both the biggest monthly spurt of inflation in almost five years and a massive $14.8 billion trade deficit. Sharply rising gasoline prices were the main villain in driving up consumer costs by 0.7 percent last month, but experts said they still expect a moderate inflation rate for the full year. The trade prospects were more bleak, however. Despite a falling dollar that makes U.S.

goods more competitive in price on world markets, the monthly trade gap exceeded the revised estimate for December of $12.7 billion, the Department of Commerce said. In related developments: Japan's seasonally adjusted surplus on its current account hit a record in January, rising 11.6 percent from the previous month and defying predictions that the strong yen would lessen the nation's trade imbalances. The Commerce Department said Japanese negotiators had agreed to promote greater use of American-made automobile parts by Japanese carmakers. In reference to the trade deficit, Sen. Lloyd Bentsen, chairman of the Senate Finance Committee, chastised the Reagan administration, saying its "ineffectual 'Mr.

Peepers' style isn't doing the job." At January's rate, the deficit is growing at a pace that could surpass last year's record of $170 billion. "We cannot just stand by and let that happen," said Bentsen, who is pushing a legislative package that would require foreign countries to open their borders to American goods or else face new restrictions on selling products in this country. The January report showed U.S. imports from Japan, Canada and Taiwan still far exceeding exports. Overall, imports jumped 7 percent to $31.2 billion, while exports shrank to $16.4 billion, the lowest level since August 1983.

The big monthly deficit "represents a serious setback to hopes for an improved U.S. trade position in 1987," said Jerry Jasinowksi, chief economist for the National Association of Manufacturers. He blamed falling exports on a slowdown in economic growth abroad. U.S. officials are hoping that lower interest rates in Germany and Japan will spur economic growth, increasing the demand for American-made goods.

January's surge of inflation may have ended an interlude of extraordinarily stable prices. "We've seen the low point of inflation for the rest of the century," said Jerry L. Jordan, president of the National Association of Business Economists. However, with wholesale oil prices now falling, a continuation of January's 6.6 percent jump in gasoline prices is considered unlikely. Overall consumer prices are expected to rise between 3.5 percent and 4 percent this year, "and that's not a rate to be overly concerned about," said Lawrence Chimerine, president of Chase Econometrics, a forecasting firm in Bala Cynwyd, Pa.

Last year, primarily due to the dramatic energy slump, prices rose a miniscule 1.1 percent. The 0.7 percent cost of living increase in January far surpassed December's 0.2 percent rise and was the biggest monthly rise since a 1.1 percent leap in June 1982. Wire service reports Shareholders OK Holiday restructuring By Lisa OvensGazette-Joumal Holiday Corp. shareholders voted Friday to approve a major restructuring of the world's largest hotel organization. A majority of Holiday's estimated 19,000 eligible shareholders voted for a $2.8 billion recapitalization that will give investors a $65 dividend on each share owned.

In addition, 20 senior Holiday officers will split 2 million restricted shares, which pay no dividends, that will be awarded as incentives over the next eight years. Culinary Union members in Las Vegas oppose the plan, saying it will push Holiday to the edge of bankruptcy and could threaten the jobs of Nevada workers. Local 226 of the union delivered a letter Friday to the Nevada Gaming Control Board, requesting the board require Holiday Corp. to post an $80 million to $100 million bond to protect 6,000 Nevada employees from the risks the union says the recapitalization plan poses. As part of the corporate restructuring, Holiday will sell at least 110" hotels over the next three years.

Neither Holiday Inn hotels in Reno nor Holiday's gaming operations will be affected. The company will announce later when shareholders will receive the dividend, but it is likely to arrive sometime in March, Holiday spokesman John Onoda said. "Under the approved plan, Holiday Corp. will continue to operate as it has in the past and pursue (its) vision as the best hotel and hotel-casino company in the world," Holiday chairman Michael Rose said in a prepared statement released following Friday morning's vote. "The only change going forward is in the way we finance the growth of the company." Citibank N.A., Bankers Trust II urn -1 4 L-jA'?" -ato Gazette-Journal file NEW DEAL: A $2.8 billion recapitalization program was approved Friday by shareholders of Holiday owner of Harrah's Reno hotel-casino.

Hawaii hotel strike threat HONOLULU Nearly 8,000 workers at 13 major Hawaii hotels will strike Monday if there is no progress in contract talks, according to a union leader. The strike threat came from Tony Rutledge, leader of Local 5 of the Hotel Employes and Restaurant Employes Union. He spoke to about 2,500 of the hotel workers at a rally Thursday. The union has scheduled a meeting for Sunday morning to vote to strike, extend the existing contract or ratify a new contract. The current agreement is scheduled to expire today.

A walkout would effect one-third of the hotel rooms in Waikiki and at least one big hotel on each of the major Neighbor Islands. Company and the Bank of Nova Scotia have entered into an agreement with 13 other banks to finance $1,225 billion in secured floating rate debt, including a $125 million revolving working capital Most companies show on their books the historical cost of assets and depreciation JJJOfejot appreciated value, hfjaid jjj isn'lcphioife but the fajiajtfcetaluCtduld be much and capital expenditure facility Onoda said. wnue it may appear Holiday will be worth little after "le of "JS?" 100 make the difference hotels will up ing itself in nearly $3 billion in debt, Robert DeLett, a certified public accountant at Grant Thornton in Reno, said it's probably not an actual portrayal of the for stockholders. "That's what this whole deal is all about: how to get increased value into their (shareholders') hands," he said. Safety net for wobbly Bryan schedules second exploratory trip to Far East By Mike NorrisGazette-Journal American to keep low fares NEW YORK American Airlines, historically a leader in setting fares, has scrapped an attempt to reduce the industry's deepest discounts because Texas Air Corp.

and other competitors refused to go along. Airline executives and analysts said Friday that American's retraction reflected the enormous market strength of Texas Air, the biggest U.S. airline operator as the parent of Continental and Eastern. They were the first to implement the "MaxSaver" 80 percent discounts, good from Feb. 1 until May 20.

Gov. Richard Bryan plans to lead his second trade delegation to the Far East in the fall, Lt. Gov. Bob Miller said Friday. Miller, who also will join the state's second high-level mission, said the fall trip would follow up one to be made Meanwhile, a board spokesman confirmed Friday that the congressional General Accounting Office is looking at the soundness of the Federal Savings and Loan Insurance Corp.

amid reports it may be technically insolvent. But he said no decision has been made. Spokesman Pat McKelvey said the GAO met Wednesday with bank board officials, but issued no decision. The GAO reportedly is questioning whether contingent liabilities of faltering now being propped up by the insurance fund should force a bookkeeping writedown of several billion dollars in the fund assets. McKelvey said the GAO last year forced the FSLIC to write down its insurance fund assets from $6.1 billion to $4.6 billion because of similar problems.

But the fund now stands at only $1.4 billion, he said, and "obviously we can't take that this year." Legislation to pump new money into the FSLIC is pending in Congress. The bank board already has testified that the fund will run dry this year unless Congress acts. WASHINGTON (AP) Faltering savings and loan associations in economically troubled oil and farm states may be allowed to operate without meeting minimum capital requirements under a new policy approved by the Federal Home Loan Bank Board. The board, under heavy congressional pressure, said it will not automatically take action against also known as thrifts, that are in jeopardy because their asset base relies on loans to farmers and oil producers. Many of those loans are now questionable because of the troubled economies.

If they are written off or downgraded, however, the thrift assets would plunge and many would fall below minimum federal requirements. Bank Board Chairman Edwin J. Gray said board disciplinary action removing management, forcing a sale or merger of the thrift or closing the institution ignores the fact that the problems may be only temporary. He said decisions in those cases "would emphasize greater discretion and judgment." Miller Pension ruling hits EEOC WASHINGTON The Equal Employment Opportunity Commission, cited by a judge for slothful delay, was ordered to require employer pension contributions for workers who stay on the job until age 70. U.S.

District Judge Harold Greene said the agency's seven-year delay was costing older American workers $450 million a year in lost pension benefits. He ordered publication of a new rule on pension credits and contributions in 80 days. Consumers prefer wine over beer, revised index says WASHINGTON Food is a bigger bargain than ever before, but housing has become a much heavier burden on Americans' budgets, the government said Friday in a massive new survey of consumer spending habits. Consumers spend less of their incomes for roasts and steaks, beer and hard liquor, but more for chicken, cheese and wine than they did in 1972. Suits and dresses consume less of the family income; sportswear takes more.

Those findings come from the Department of Labor's newly revised Consumer Price Index, which measures changes in the cost of a so-called "market basket" of goods and services bought by urban residents. "Buying patterns can change over time as a result of changes in prices, demographic characteristics of the Eopulation, income or tastes and abits," according to a report by Charles Mason and Clifford Butler of the Labor Department's Bureau of Labor Statistics. Friday's Consumer Price Index report is based on a new market basket reflecting the way consumers spent their money between 1982 and 1984. It was the first revision since 1972-73. What resulted were some key changes in the index.

Food, for example, consumed 19.9 percent of the budget in 1972. Although people are eating more meals in restaurants and buying more frozen foods, the share of spending devoted to meals drops to 17.8 percent in the new survey. Los Angeles Times Vegas-based Royal West Airlines closes by a lower-level delegation in May. The purpose of the trips is to bolster contacts made during three trips to Japan and Korea in 1986, including one led by Bryan in April to Tokyo, Osaka and Seoul, and to extend overall state efforts to encourage Pacific Rim investments in Nevada. Officials of the Commission on Economic Development, which Miller chairs, said the Bryan's trip is planned for October, assuming funding is approved by the Legislature.

Bryan has asked lawmakers to approve $150,000 to open an office to represent Nevada's interests in Japan and to provide additional funding for travel and marketing expenses. Miller said he believes "we will see some results" from the Tokyo office, currently a one-year contract operation run by a private company. A total of 136,000 Japanese visited Nevada in 1986, making the state their fourth most popular tourist destination after Hawaii, New York and California. He said 37 percent of Japanese visitors to California also go to Nevada. "This places Nevada in an enviable position," Miller said.

LAS VEGAS (AP) Royal West Airlines, a Las Vegas-based airline that recently announced non-stop service between Las Vegas and New York City, ceased operations Friday. The airline closed its gate operation Friday and did not have incoming or outgoing flights all day, said a spokeswoman for McCarran International Airport. The airline made no announcement of its closure and calls to its offices went unanswered. Royal West, which began operations last June, recently advertised it would begin the only non-stop service between New York City and Las Vegas. Its only operating flights, however, were 13 round trips daily between Las Vegas and Los Angeles.

"It's no secret they have been having financial problems," said airport spokeswoman Vicki Donaldson. "We were hoping they would maintain operations and keep flying." Royal West, which employed about 100 people, borrowed $3 million to expand its operations in 1986 and planned a public offering in the spring of 1987 to raise $8 million to $10 million. Grant Murray, the airline's president, said last year that the airline's load factors of 40 percent to 45 percent were disappointing, but he anticipated traffic would pick up in 1987. Worker drug tests upheld DETROIT An arbitrator here has upheld Mobil Oil employee drug tests, forming what a company lawyer called an important precedent for similar screening programs elsewhere. The ruling, released Thursday by Richard L.

Kanner of the American Arbitration Association, followed a Teamsters Union grievance over drug tests at Mobil's terminal operations in the Detroit suburbs of Dearborn and Woodhaven. Wire service reports.