Reno Gazette-Journal from Reno, Nevada • Page 26

Today's tip 10B Thursday, August 18, 1988 Reno Gazette-Journal BUSINESS EDITOR: JIM GOLD, 788-6322 Trouble with vour brokers? For the American Arbitration Association's free booklet, "Securities Arbitration Rules," write to the AAA at 140 W. 51st New York, N.Y. 10020. Stead company seeks Chapter 1 1 bankruptcy The Hoyt plant has a "skeleton crew," still making heaters, she said. The firm's executives hope to keep the business running by selling some assets to generate revenue, she said.

Hoyt management contends its financial problems occurred after State Industries another heater manufacturer, violated California antitrust laws, said Richard Horton, another attorney representing the Nevada company. Hoyt contends State allegedly sold heaters at prices lower than production costs, deeply cutting into its sales market, he said. One year ago Hoyt filed suit in Federal District Court in San Francisco against State, the largest California distributor of hot water heaters, Horton said. State, which has headquarters in Ashland City, at the same time filed suit against Hoyt in Reno federal court. State's suit contends Hoyt is using a pro Seesawing stocks up 4.45 on slow day NEW YORK Stocks seesawed Wednesday and finished mixed in a slow session that reflected investor apathy and more uncertainty about where the market is headed.

"Basically there really isn't any excuse for a rally," said Jonathan Groveman, head of equity trading at the New York investment firm Ladenburg, Thalmann Co. "There's just not a heck of a lot going on." The Dow Jones average of 30 industrial stocks, which partly recovered Tuesday from a three-month low, swung in a narrow range and closed up 4.45 points to 2,025.96. Volume on the New York Stock Exchange floor totaled 169.50 million shares, vs. 162.79 million Tuesday. Losing issues outnumbered advances by less than a 7-to-6 margin in composite trading of NYSE-listed stocks, with 742 down, 660 up and 533 unchanged.

Judge blocks Detroit JOA WASHINGTON A federal judge Wednesday temporarily blocked a partial merger of Detroit's two newspapers, the Free Press and the News. U.S. District Judge Joyce Hens Green issued an emergency order, effective until Sept. 17, that will prevent the joint operating agreement from taking effect. It was to begin today.

Former Attorney General Edwin Meese III approved the deal before leaving office last week. Both newspapers sought the agreement under an antitrust exemption of the Newspaper Preservation Act. "To borrow the phrase used by counsel for plaintiffs, it will be very difficult to reassemble this egg once it has been scrambled," the judge said, hours after attorneys for advertisers and readers argued for the order. cess the Tennessee firm patented, but the Nevada company denies it, Horton said. No State executives could be reached to comment at that company's Tennessee offices late Wednesday.

In the pending suits, both companies seek more than $10,000 from each other and attorneys' fees, Horton said. Interviewed by the Gazette-Journal in March 1984, Dan Lannes said Hoyt made 1,200 models of gas, electric and solar water heaters for various businesses and industrial developers. A voluntary petition was filed Aug. 10 in Reno Federal Bankruptcy Court by Stead Industries, doing business as Hoyt Heater Co. The document says that as of June 30, 1988, Hoyt had assets of $13.7 million and the same amount of liabilities.

The petition says two creditors are owed secured debt of $6.7 million, and 347 creditors ii i i By Wayne MeltonGaiette-Joumal Hoyt Heater a Stead hot water heater maker that contends it's a victim of a major competitor violating antitrust laws, has filed for Chapter 11 bankruptcy reorganization. Hoyt's plant remains open at 14290 Lear Blvd. The 78-year-old company moved to Stead from Oakland, in 1982. Its personnel manager, David Luther, declined comment on the bankruptcy. Earlier this month he said Hoyt employed 200.

Co-owners Dan and Stephen Lannes could not be reached for comment. Hoyt's bankruptcy attorney, Jennifer Smith Flangas, said there have been a number of recent layoffs, but she doesn't know how many. Some or all laid-off workers will be rehired as needed, she said. 1 1 ,000, including 13 in Reno, lose trucking jobs As many as 11,000 people nationwide, including 13 in Reno, lost their jobs this week when two subsidiaries of American Carriers filed for Chapter 11 bankruptcy protection and ceased operations. Karen Hughes, at the trucking company's headquarters in Overland Park, said Wednesday that all workers at American Freight System Inc.

and USA Western Inc. had lost their jobs. Also included were workers on trucking lines American Freight acquired last October from Smith Transfer Corp. of Staunton, Hughes said. Although the filings under the U.S.

Bankruptcy Code would allow both companies to continue operating while they reorganize, American Carriers said operations would cease. The company filed for protection from its creditors in Topeka, Kan. USA Western's Reno terminal was shut down Monday at 6 p.m., said John McKin-ney, terminal manager since last November. McKinney said he, five local drivers, six line drivers and an office clerk are out of jobs. The Reno terminal is being cleaned out and goods in transit are being transferred to other freight carriers, he said.

The non-union Reno operation was a medium-size terminal averaging 10 outbound trailers and six inbound daily. "Reno was profitable, nothing here caused the downfall," McKinney said. "This is one of best terminals we had." The bankruptcy filing didn't cover American Carriers itself or other subsidiaries, including Midwest Coast Transport Inc. Those operations did not close. American Freight and USA Western are "less-than-truckload" haulers, which means they collect small loads from many customers and haul them to central terminals, where they are redistributed.

The industry was hit with rate wars in the last few years. American Carriers, which had the country's ninth-largest less-than-truckload operation last year, lost $36 million in the first half of this year. Wire service and staff reports Irtousoimg) ii 11 i r- in i -J owed unsecured debts of $5.1 million. Hoyt reported it has three stockholders and 12,835 common stock Dan Lannes, board chairman, and Stephen Lannes each directly or indirectly owns, controls or holds 20 percent or more of voting securities, the document says. The exact amount each owns was not listed.

Hoyt listed 20 creditors with the largest unsecured claims. Topping the list is Robertshaw-Grayson Division of Long Beach, which is owed $1.12 million. Other top creditors and amounts they're owed include: Nichimen American, of San Francisco, Willamette Industries of Cerritos, Punch Press Products of Los Angeles, and California Steel Industries of Pasadena, $246,500. The petition says Hoyt has filed no previous bankruptcies. Economists warn rebound may be brief WASHINGTON (AP) Housing construction rose a moderate 2.4 percent in July, the government reported Wednesday, but economists warned that rising mortgage rates could make the two-month housing rebound a brief one.

The Commerce Department said new homes and apartments were being built at a seasonally adjusted annual rate of I. 49 million units last month after advancing 4.4 percent in June. Housing starts had dropped a sharp 12.1 percent in May to the slowest pace in three years, and rising mortgage rates were blamed. The June-July rebound was attributed to stabilized mortgage rates, but last week the Federal Reserve boosted the discount rate, the interest it charges for loans to member banks. This move was widely interpreted as the opening salvo in a renewed battle by the central bank to drive up interest rates to fight inflation.

As a consequence, a variety of other interest rates, including the banks' prime lending rate and mortgage rates, have moved higher. Fixed-rate mortgages rose to 10.57 percent by the end of last week and analysts predicted mortgages would soon top 11 percent. "I believe we have seen the peak for housing starts this year as rising interest rates cut into sales," said Richard Peach, an economist with the Mortgage Bankers Association. David Seiders, chief economist of the National Association of Home Builders, said his organization was so concerned by the Fed's credit-tightening moves that he asked Federal Reserve Chairman Alan Greenspan in a letter for "a more even-handed approach." "Clearly, the Fed views the housing industry and other interest rate-sensitive sectors of the economy as being sacrificial lambs," Seiders said. Sales of homes and other high-priced items usually are the first to fall off when the Federal Reserve tries to dampen borrowing by raising interest rates.

Michael Sumichrast, an economist and publisher of a construction industry newsletter, said that if mortgage rates climb to II. 5 percent or higher, it would spell disaster for the housing industry. He said home sales already have been hurt by big price increases in many parts of the country. "I don't think you can sell houses at 11.5 percent to 12 percent mortgage rates in this market because of the price increases," Sumichrast said. Analysts say another worrisome sign is that housing permits, considered a good barometer of future activity, fell in July by 5.4 percent to an annual rate of 1.41 million units.

It was the biggest permit decline since January. James Christian, chief economist of the U.S. League of Savings Institutions, said the drop in housing permits probably reflects builders' fears of rising mortgage rates. He said the impact of higher rates should be moderated by a consumer shift toward adjustable rate mortgages, which carry a lower initial rate. The July increase stemmed from a big See HOUSING, page 7B discuss buyout Farmers agreed to discuss a sweetened, $72-a-share offer from the Louisville, -based tobacco and retailing company.

In making the offer last week, Batus set a deadline of Friday for negotiation of a definitive agreement. Farmers spurned Batus' offer of a negotiated purchase early this year, and the companies have since been sparring over Batus' hostile bid to acquire a controlling stake in the open market. Batus' $63-a-share tender offer to shareholders remains in effect, and the company has indicated it would continue that hostile takeover effort if the See FARMERS, page 8B 2.4 in if inrw 1 1 Marilyn NewtonGazette-Journal GOING UP: Workers for Clark Sullivan Constructors of Sparks face up to the $8.3 million Washoe County Administration Building under construction at Ninth Street and Wells Avenue in Reno on Wednesday. Completion of the foot building is scheduled for June 1989. State cracks down on Colorado New look for Iron Horse A $700,000 renovation project will give a Sparks shopping center a more contemporary look, its new managers say.

Work has begun at the Iron Horse Shopping Center at the southwest corner of East Prater Way and North McCarran Boulevard. The contractor is Turner Construction a Bay area firm. Management of the center will be taken over Sept. 1 by Spatz and Co. of Northbrook, 111.

The center is owned by the Ohio Teachers Retirement Fund, which recently bought out its partners in the center, Iron Horse Association of California. The center is anchored by a Target department store and a Miller's Outpost clothing store. Stockbroker pleads guilty NEW HAVEN, Conn. A former Merrill Lynch Co. stockbroker pleaded guilty Wednesday to engaging in a scheme in which he illicitly obtained advance copies of Business Week, then reaped profits from trading stocks mentioned in the magazine.

William Dillon, 33, who was dismissed last month from Merrill Lynch's New London office, is the first person to be criminally charged in the widening insider-trading scandal involving leaked copies of Business Week. People JIM SPRACKLIN has been appointed assistant beverage manager of the Eldorado HotelCasino in downtown Reno. Spracklin has more than 22 years in the food and beverage Spracklin industry. Originally from Winnemucca, Spracklin has lived in the Reno area for more than 40 years. He joined the Eldorado as beverage manager when it opened in 1973 and later became operations manager.

In 1980 Spracklin went into private business. He returned to the Eldorado as warehouse manager, a position he held for the past year and a half. ROBIN RUHWEDEL, a registered dietician, has joined the staff of the American Heart Association, Northern Division as program coordinator. Ruhwedel will handle all school site, healthcare site and community site programs. Before moving to Reno, Ruhwedel was program director of the Hawaii Affiliate of the American Heart Association.

ANGELA NORTHEY of Reno attended a leadership and management seminar held recently at Mitchell Point in Hamilton, N.Y. The course was conducted by Operation Enterprise of the American Management Association. Northey will be a senior at McQueen High School. The American Hardware Manufacturers Association was the sponsoring organization for Northey. Wire service and staff reports SV- Jjt distributor of homeopathic products including a skin patch that is supposed to suppress the desire to eat.

The notice of hearing was issued Aug. 4 and Tri-Bradley has until Friday to request a hearing. If one isn't ordered by the company, the cease-and-desist order will become permanent, said Judith Allan of the securities division on Wednesday. Allan said an investigation has been ongoing into the sales of CTI Technical stock since May. The securities of CTI were traded in the over-the-counter market.

In July, the U.S. Securities and Exchange Commission suspended trading of CTI securities for among other things lack of current and accurate information regarding control of CTI. The state hearing notice shows Ronald D. Wheeler Jr. was branch manager of Tri-Bradley Investments in Las Vegas.

His father, Ronald D. Wheeler was a broker in that office. An uncle, E.W. "Bud" Wheeler, is the chief executive for Sparks firm securities firm officer of CTI Technical. Efforts to reach the Wheelers Wednesday were unsuccessful.

Allan said the men "vanished from the face of the earth." "They just kind of up and left" over the weekend and "Ron Wheeler is nowhere to be found as far as we know," she said. Paul Hurtado, executive vice president and compliance officer at Tri-Bradley's Colorado office, said Wednesday he knows the Wheelers left the business Friday and he is in the process of finding replacement management. In a related matter, the state of New Mexico in April issued a cease-and-desist order against Tri-Bradley for selling and offering to sell unregistered securities, said Allan. And in August, the National Association of Securities Dealers fined Tri-Bradley $500 for failing to properly report its trading volume in eight securities traded in the over-the-counter market. Farmers, Batus LOS ANGELES (AP) In the first uneasy truce in a lengthy takeover battle, officials of Farmers Insurance Group Inc.

and Batus Inc. met Wednesday to discuss Batus' proposal for a friendly $4.9 billion buyout. But both sides professed themselves prepared to continue the war they have waged for eight months in the stock market, the courts and before state regulatory bodies. Batus Chairman Patrick Sheehy was in Los Angeles, Farmers' headquarters, and was expected to meet with Farmers' Chairman Leo E. Denlea, according to spokesmen for both companies.

No details of the talks were released. The meeting came one day after By Lisa OvensGazette-Journal A Colorado-based securities firm is facing a cease-and-desist order for selling unregistered securities for a Las Vegas-based health products company. Tri-Bradley Investments an Eng-lewood, broker-dealer with a branch in Las Vegas, sold the securities of CTI Technical the securities division of the Secretary of State's office says. According to a state cease and desist order and hearing notice, at least eight Tri-Bradley sales representauves in the Las Vegas branch opened last March were involved in at least 121 sales or offers to sell about 14 million shares of CTI Technical stock to residents of Nevada, Arizona, California, Colorado, Florida, Illinois, Indiana, Louisiana, Montana, New York, Ohio, Texas and Utah. CTI Technical since February 1987 has owned Vital Life Products which is a Name's the same By Nancy F.

PeekGazetie-joumai The former Zellerbach Paper Co. in Sparks says a name change by its parent company had little effect on local operations. In June, Mead $1.5 billion distribution operation consolidated all 77 operating units into a single company called "Zellerbach, A Mead Company." "We were the Zellerbach Paper Co. before for 50 years, so there's been no huge difference to us," said Ron Wilson, Zellerbach's Sparks office manager. "The change will probably have more of an effect on others like the Virginia Paper Co.

or Southern Paper Co." When Mead bought Zellerbach Paper Co. in 1986, the acquisition became the distribution division's largest unit. While the Sparks unit already was called Zellerbach, Mead's local units in the Midwest and Southeast had other names. The largest before the Zellerbach acquisition was Mead Merchants, which operated 35 distribution facilities. Mead bought Zellerbach, among whose units were the Virginia Paper Co.

in Richmond, and Southern Paper Co. in Knoxville, Tenn. Now all the units operate under the "Zellerbach, A Mead Company" banner. One result of the reorganization effort is a new nationwide computer link-up system called ACCESS (Accurate Complete Communication Equals Superior Service), Wilson said. The computer system provides each distribution location with inventory data, shipping verification and order processing information.

See SPARKS, page 8B.