The Los Angeles Times from Los Angeles, California on August 16, 1974 · 57
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The Los Angeles Times from Los Angeles, California · 57

Los Angeles, California
Issue Date:
Friday, August 16, 1974
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Glide Firm to Acquire Recrion by Tender Bid BY HARRY ANDERSON Times SUH Writer Recrion Corp. of Las Vegas will merge into Argent Corp. of La Jolla, perhaps by the end of this month, as a result of a successful tender offer which expired Wednesday night, attorneys for Argent reported Thursday. Argent is an investment company, wholly owned by lawyer and real estate developer Allen R. Glick, 32. Recrion is the owner of the Stardust and Fremont hotel-casinos. Glick is already principal owner of the Hacienda hotel-casino on the Las Vegas Strip. According to Argent's New York law firm, Glick received about 890,000 Recrion shares roughly 64 .of its outstanding stock in response to a tender offer at $44' per share. . . A partner in the law firm said the success of the tender offer means Glick, through Argent, will proceed with a previously announced plan to buy another 421,844 shares of Recrion stock belonging to former Recrion chairman Delbert W. Coleman. That purchase would give Glick a total of 94 of Recrion's stock. The Coleman purchase was conditioned on Glick's making a tender offer for all of Recrion's stock and . receiving at least 80 including the Coleman shares. Once the tendered shares and those of Coleman are purchased, a merger of Recrion into Argent will be accomplished, according to the lawyer. He said the merger is expected "as soon, as possible" hopefully by the end of August. Remaining Recrion stockholders will receive $44 per share at the time of the merger, the lawyer said. It will cost Glick $62.28 million to purchase Recrion's 963,492 outstanding shares at $44 each." The Teamsters Union Central States Pension Fund has committed a $62.7 million loan to Glick. Glick's lawyer said Argent, plans no changes in the operation or management of the two hotel-casinos owned by Recrion. Both Recrion's common stock and its 10 subordinated debentures have been listed on the American Stock Exchange. However, the exchange said Thursday it has suspended all trading in Recrion stock because so few shares remain outstanding. The exchange said it would ask the Securities & Exchange Commission to delist the stock and remove it from registration. Argent's lawyer said the firm plans ;to re-register the 10 subordinated debentures, of which there are about $38 million principal amount outstanding with the American Stock Exchange, once the merger of Recrion is accomplished. Recrion was formerly based in Los Angeles and was known as Parvin-Doh-rmann Co. until 1970. It recently reported that earnings in the first half of 1974 were 43 below those of a year ago. VW Sales Decline 11 in First Half WOLFSBURG. Germany (P) Volkswagen's worldwide automobile sales declined 11 to 1.08 million cars in the first six months of 1974, the company said Thursday. Worldwide consolidated income was $3.52 billion, down. 3 from the same January-June period in 1973, Volkswagen reported. Six-month income of the parent company, Volk-Volkswagenwerk AG, was $2.43 billion, down 1 from last year, it said. Volkswagen's sales in the United States, its most important export market, were down 28 in the six months, the company said. Consolidated sales in Europe were down 26 between Jan. 1 and June 30 following especially strong declines in France, Italy, Britain and Denmark, Volkswagen said. SMART CHART by Stansbury JL Equity Funding "It's net the size of the lean, it's the size of the interest." Gold Decline Lifts European Dollar Prices LONDON (UPD Falling gold prices Thursday boosted the value of the U.S. dollar in most European markets. The Bank of England had to intervene to prop up the British pound. On the big London bullion market, gold initially jumped $1.75 an ounce, then went into a decline that dropped its price to $152 dollars an ounce at the close. The metal finished Wednesday at $156.25. A similar pattern developed on the Frankfurt and Zurich markets. In Zurich, gold dropped to S153 from $157.50 while in West Germany it eased marginally to $156.44 from $156.64. In London, the pound closed at $2.3445, down from $2.3565, and was saved from a steeper drop only by Bank of England intervention, dealers said. They attributed the pound's decline to the announcement of the government's white paper on the nationalization of industry. my runaii Sued by Aetna Aetna Casualty and Surety Co., a unit of Aetna Life and Casualty Co., filed suit in a Chicago federal court Thursday against Equity' Funding Corp. of America, Century City, its life insurance subsidiary, 18 of its former officers and directors, five accounting firms, an actuarial firm,' several Wall Street Securities firms and several other individuals. The six-count suit alleges fraud by the indivi duals, negligence and carelessness on the part of the accountants and illegal use of "insider" information by the Wall Street firms. Equity Funding collapsed in April, 1973, after disclosure of a massive bogus insurance and phony assets scandal. Aetna Casualty claims it bought 10,000 Equity Funding shares and seeks return of the purchase price plus punitive damages. Cargo Flight Added Flying Tiger Line, Los Angeles, said it has added a second early morning cargo flight between Los Angeles and Cleveland. A third flight will be added in September, the unit of Tiger International added. GRUMMAN FUND to Snstlrt Cunts Fa, August 16, 1974-Part III 17 Continued from 16th Page-Informed sources at the Pentagon said Wednesday that the Navy could, still loan Grumman $25 million without congressional approval. This loan, they said, combined with a greater commitment from Iran than the $30 million it has agreed to advance for its fighters, might be used by Grumman to seek commercial bank financing. If commercial bank- financing proves unfeasible, the approval of Secretary of State Henry Kissinger would be necessary before Iran could supply the money. The State Department said no request for approval has been received. As for Grumman's financial status, President John C. Bierwirth said if the Sierracin to Acquire Semco Instruments Sierracin Corp., Sylmar, said it has agreed to acquire Semco Instruments Inc. of North Hollywood for approximately $561,000. in cash. Semco manufactures temperature sensing and control systems for aircraft engines and nuclear applications. Navy loan doesn't materia- lize. Long Island's largest employer might find it difficult to meet its 23,000-person payroll after Aug. 31. He said if no funds come through in four or five weeks, "serious trouble could develop." Representative Otis Pike (D-N.Y.) said he doesn't feel that the. Senate realized that if Grumman .should go bankrupt the government will not get delivery on three other planes besides the F-14 "Tomcat" These include an all-weather attack plane and two electronic counter-measure aircraft. Grumman says its reason for seeking additional Navy loans is that it has lost $220 million on manufacturing F-14s over the last several years because of cost factors. AND SILVER' COINS WHOLESALE PRICES AUSTRIAN 100 CORONAS "MEXICAN 50 PESOS SILVER DOLLAR CORPORATION (213) 275-5121 9460 Wilshire, Beverly Hills IF03 gHH 29 UNIT APT. GONDO PACKAGE Ready to build in West Hollywood. Contact Mr. Molina. 829-2646 New Issue Rated: Aaa Moody's AAA Standard & Poor's $50, i,000,000 State of California Veterans Bonds, Series RR COMMODITY TRADERS CALL 628-0701 for Hornblower's hourly recorded commodity futures price reports. Prt-markel at I:1S A.M. Closing comment at 1:00 P.M. HORNBLOWER HOBNBLCWERmS-HEMPfflUJWES Incorporated 637 Wilshire Blvd. Los Angeles 90017 (213) 625-7111 For Market Letter requests circle trading center nearest you: Los Angeles Beverly Hills Orange Clendalc Name- Address- City- .Phone BE IN A . PLEASE CALL: BOB SPREEN CADILLAC 868-9931 P.S. we'll truly value your trade. INFLATION: THE TRAGIC ECONOMIC AND INVESTMENT CONSEQUENCES by Charles L Black This powerful book deals directly with the causes and consequences of inflation. It fully explores the topic in a manner which any layman can understand and yet on a level the professional economist will appreciate. The topics discussed include: 1. What causes inflation? ' 2. The history of man's experiences with inflation. 3. Are common stocks a sound investment in times of rising prices? 4. Does real estate have serious problems ahead? 5. Is silver a hedge against inflation? 6. What are the current advantages and disadvantages of banks and savings and loans? 7. What kind of inflation hedges are needed and how should they be purchased? 8. What is the ultimate result of inflation? Thi book was written by a graduate economist with a background as a former stock brokerage oflicer, realtor and college instructor. Three years of research lead to the ominous conclusions which this book documents in complete details. Copies of this limited edition are available only by direct mail order. Each book It $5 plus 50c mailing costs. A refund can be obtained rf not completely satisfied by returning the book within 7 days. NAME ADDRESS. CITY STATE 2P T. E. SLANKER COMPANY co Charles I. Black 1004 Yeon Building Portland, Oregon 97204 Principal and semi-annual interest (February 1 and August 1) payable at the office of the State Treasurer, Sacramento, California Coupon Bonds of $5,000 denominations registrable as to both principal and interest. Interest exempt, in the opinion of counsel, from all present Federal Income Taxes and from State of California Personal Income Taxes These Bonds, to be dated August 1, 1974, will constitute, in the opinion of counsel, valid, general obligations of the State of California for the payment of which the full faith and credit of the State are pledged. Out Due Price or Due Yield or Amount Rate August 1 Yield Amount Rate August 1 Yield Amount Rate August 1 Price. $2,750,000 62 1975 5.40 $2,625,000 5.60 1982 100 $2,375,000 6 1988 5.90 2,750,000 7 1976 5.40 2,625,000 5.70 1983 5.65 2,375,000 6 1989 . 5.95 2,750,000 7 1977 5.40 2,625,000 5.70 1984 100 2,250,000 6 1990 100 2,750,000 7 1978 5.40 2,375,000 5 1985 100 2,250,000 6 1991 100 2,750,000 7 1979 5.45- 2,375,000 5.80 1986 100 2,250,000 6 1992 N.R. 2,625,000 6 1980 5.50 2,375,000 5.90 1987 5.85 2,250,000 6 1993 N.R. 2,625,000 5.60 1981 5.55 2,250,000 5V4 1994 6.25 (Accrued interest to be added) These Bonds' are offered when, as and if issued and received by us and subject to approval of legality by the Attorney General of the Slate of California and Messrs. Orrick, Herrington, Rowley b Sutcliffe of San Francisco, California. The above Bonds are offered in any Stale in which this announcement is made in which the undersigned are authorized to do so under the laws of such State. United California Bank Salomon Brothers Morgan Guaranty Trust Company Crocker National Bank ot New York Bear, Stearns & Co. Donaldson, Luf kin & Jenrette Securities Corporation The First National Bank of Boston North Carolina National Bank The Citizens & Southern National Bank Loewi & Co. , Atlanta Incorporated August IS, 1974. Mellon Bank, N.A. Alex. Brown & Sons Langdon P. Cook & Co. Incorporated Roose,Wade& Company NOTICE TO INVESTORS IN EQUITY FUNDING CORPORATION OF AMERICA AND OTHER INTERESTED PERSONS IN THE CIRCUIT COURT OF THE 18th JUDICIAL CIRCUIT DU PAGE COUNTY, WHEATON, ILLINOIS PEOPLE EX REL. FRED A. MAUCK, Director of Insurance of the State of Illinois, Plaintiffs, EQUITY FUNDING LIFE INSURANCE vs. COMPANY, an Illinois domestic stock life insurance company, Defendant. NO. 73-1019-G TO: ALL PERSONS WHO OWNED STOCK, DEBENTURES OR WARRANTS OF EQUITY FUNDING CORPORATION OF AMERICA ("EFCA") AT ANY TIME FROM JANUARY 1, 1964 THROUGH MARCH 27, 1973 AND OTHER INTERESTED PERSONS. 1. Notice is hereby given that a hearing will be held at 10:30 A.M. on September 19, 1974, before the Honorable Alfred E. Woodward, Chief judge of the 18th ludicial Circuit, Du Page County, Illinois ("the Court"), at the Countv Courthouse, City of Wheaton, Du Page County, Illinois. The purpose of the hearing is to determine whether the Plan of Liquidation of Equity Funding Life Insurance Company ("EFLIC") as amended, should he approved and whether the proposed settlement of certain claims against EFLIC should be approved by the Court and to consider applications for allowance of expenses and attorneys' fees. The hearing may be continued from time to time by the Court at the hearing or at any adjourned session thereof without further notice. DESCRIPTION OF THE PROCEEDINGS 2. Fred A. Mauck, Director of Insurance of the State of Illinois (the "Director"), has been directed by Order entered on April 16, 1973, to take possession of the assets of EFLIC and to rehabilitate it in accordance with the Illinois Insurance Code. ' 3. The Director, in his capacity as Rehabilitator, determined that EFLIC cannot be rehabilitated and on March 25, 1974, filed a Complaint for Liquidation and a Petition for the Approval of a Plan of Liquidation of EFLIC ("the Original Plan"). 4. Pursuant to an Order dated March 25, 1974, a "Notice to Creditors and Other Parties" was published, which Order, among other things (a) set a hearing to begin on May 22, 1974, on the Complaint for Liquidation and Petition for the Approval of a Plan of Liquidation, (b) established a deadline of April 30, 1974, for the filing of creditors' claims against EFLIC and (c) established a deadline of May 1, 1974, for the filing of any objections to the Original Plan. 5. The only objections to the Original Plan which were filed by May 1, 1974, the date fixed by the Notice referred to in paragraph 4 above, were filed on behalf of a class of EFCA investors ("the class herein"). The class herein is identified in paragraph 15 below. The primary objections to the Original Plan on behalf of the class herein were that (a) the notice of the hearing was allegedly inadequate as a matter of law, (b) certain other claimants, including EFCA and various insurance companies, were allegedly treated as preferred creditors of EFLIC to the practical exclusion of the class herein, and (c) certain assets of EFLIC were allegedly being transferred without adequate consideration and not pursuant to adequate solicitation procedures. The Director has oppdsed these objections as well as the standing of anyone to assert a claim on behalf of the class herein in insurance company liquidation proceedings under Illinois law. 6. Class claims against EFLIC were filed on behalf of the class herein as were individual claims by various EFCA investors. They charge EFLIC with violating the federal securities laws and common law by engaging in a conspiracy to inflate the earnings of EFLIC and EFCA so as to artificially inflate and maintain the prices of securities issued by EFCA and with aiding and abetting such fraud. 7. On May 24, 1 974, the Court made an Order finding that the notice described in paragraph 4 above was lawful and adequate. The Court further found EFLIC insolvent and that it was in the best interests of EFLIC's policyholders that EFLIC be liquidated. The Court has not yet ruled on the Original Plan or passed on the class claim. 8. The attorneys for the class herein have made a thorough investigation of the facts and transactions involved in these proceedings, including their participation during the hearing on the Complaint for Liquidation and on the Original Plan, which hearing has encompassed some two thousand pages of daily court transcripts and thousands of pages of exhibits, Aftef taking into account the likelihood that these proceedings, if not settled now, will be protracted and involve questions of establishing a class claim and the risks inherent in these proceedings, the attorneys for the class herein have concluded that it would be in the best interest of the class herein to settle the class claims on the terms of settlement set forth in a Stipulation of Settlement dated August 6, 1974, and withdraw their objections to the Original Plan (the "Stipulation,"), the principal terms of which are described below. DESCRIPTION OF THE PROPOSED SETTLEMENT , 9. The Stipulation provides tor the establishment ol a cash " Settlement Fund of Two Million Dollars ($2,000,000) for the benefit of the members of the class herein. The Settlement Fund shall be established out of the assets of EFLIC. The Original Plan shall be amended so as to assure the existence of the Settlement Fund. In this connection, certain compromise agreements between EFLIC and EFCA and EFLIC and various coinsurance companies have been amended and copies thereof are on file with the Court. Pursuant to these compromise agreements, as amended, EFCA shall receive $2,230,000 plus additional consideration, Northern Life Insurance Company of Washington, a subsidiary of EFCA, shall assume and receive the benefits of all of the in force book of insurance business of EFLIC and various coinsurers shall receive an aggregate of $4,-050,000. 10. Counsel for the class herein will apply to the Court for the expenses of litigation in these proceedings, including counsel fees and out-of-pocket costs relating to thesfc proceedings to be disbursed by EFLIC from the Settlement Fund on the Settlement Date as defined below. Similar applications will be made by others including counsel for two individual claimants, the State Teachers' Retirement Board of. Ohio and the Jewel Companies Investment Trust, each of whom participated in the proceedings. 1 1. On the Settlement Date,' the remainder of the Settlement Fund shall be transferred to Security Pacific National Bank, Los Angeles, California ("the Bank"), as a depository for the benefit of the class herein. So long as the Bank shall hold any part of the Settlement Fund, it shall invest and reinvest the funds then on hand in (i) United States treasury bills, notes or bonds, and (ii) federally insured savings accounts of United States Banks, with all income therefrom being added to the Settlement Fund. The Bank shall not invest in any debt obligations having a maturity of more than thirteen (1 3) months. The Bank shall receive reasonable compensation for its services. 12. The funds held by the Bank shall be used to pay ap- ' proved out-of-pocket costs arid expenses (but not attorneys' fees), past and future, incurred in the prosecution of class actions Brought on behalf of members of the class herein which are pending in the United States District Court for the Central District of California ("U.S.D.C."), under the title "In re Equity Funding Corporation of America Litigation", MDL Docket No. 142, wherein certain plaintiffclass members (persons who purchased stock, debentures and warrants of EFCA) seek recovery for securities fraud, breach of fiduciary duty, common law fraud and related wrong-doing against various accounting firms, underwriters, governmental agencies, former officers and directors of EFCA and others. All such costs and expenses shall be paid and reimbursed from the Settlement Fund only if authorized or approved and upon application by the Co-Chairman or Liaison Counsel of the Class Action Steering Committee then serving and approval by the U.S.D.C. The U.S.D.C. has agreed to perform this function but has not passed on any aspect of this settlement. No costs or expenses incurred in opposition to or support of any Plan of Reorganization of EFCA shall be paid out of the Settlement Fund. 13. At such time as the Settlement Fund is no longer needed to provide for costs and expenses as set forth herein above in the judgment of the Co-Chairmen or Liaison Counsel of the Class Action Steering Committee then serving, and not more than five (5) years frorrj the Settlement Date, unless extended by the Court for good use, counsel for the class herein shall apply to the U.S.D.C. ftr an Order permitting distribution of" trie Settlement Fund to the members of class herein. Such an Order shall establish distribution procedures including the identification of the members of the class herein and their respective interests, if any, in the Settlement Fund, notice to the members of the class herein, the filing of and review of claims of damages sustained, distribution of the Settlement Fund and establishment of sub-classes of class members of the class herein if appropriate. All such procedures shall be subject to the approval and supervision of the U.S.D.C. There shall be no deductions from the Settlement Fund then available for distribution to class members, .other than the actual costs and expenses thereof (but not attorneys' fees) and unpaid costs and expenses and Bank fees, if any. Such distribution may be made in conjunction with the distribution of other funds recovered in the multidistrict litigation by settlement or judg- ' ment. 14. The Court shall retain continuing jurisdiction to carry out and interpret the terms of the Stipulation including the disposition of the Settlement Fund if for any reason the U.S.D.C does not fxercise jurisdiction over the Settlement Fund. 15. For settlement purposes only, the Court shall enter ati Order that the class claims herein were properly filed on behalf of a class whose members are presently undetermined but whose members would include at most all persons who owned stock, debentures or warrants of EFCA at any time from January 1, 1964 through March 27, 1973, except those persons who had special knowledge of EFCA or EFLIC fraud and were not deceived by any such conduct. 16. The Settlement Date shall be ten (10) days after the last to occur of: (a) the date on which the Orders by the Court herein approving the Original Plan, as amended, and the proposed settlement as set forth in the Stipulation become final; (b) the date on which the Order by the EFCA Bankruptcy Court authorizing the Trustee to approve andor execute all of the agreements which are part of the Original Plan and the amendments to those agreements becomes final; (c) the date on which the Order of the Superior Court for the County of Los Angeles, State of California, approving all of the agreements which are a part of the Original Plan, as amended, becomes final; and (d) Northern Life Insurance Company shall have assumed all of EFLIC's in force business: No court has yet passed on the proposed settlement. The Director and the Insurance Commissioner of the State of California have approved the Original Plan, as amended, and the Stipulation. THE SETTLEMENT HEARING 17. Any interested person may appear at the September 19, 1974 hearing described in paragraph 1 above personally or by separate counsel and show cause, if any, why the Stipulation should not be approved and why allowances of counsel fees and litigation expenses should not be made. However, no person shall be heard in opposition to these matters and no papers or briefs submitted by such person shall be received or considered unless on or before September 9, 1974, such person shall file with the Clerk of this Court and mail to (i) lack Corinblit and Marshall B. Grossman, 3700 Wilshire Blvd., Suite 575, Los Angeles, California 90010, on behalf of Schwartz, Alsrhuler & Grossman, Corinblit and Shapero, David Gold, and Sachnoff, Schrager, (ones & Weaver, counsel for the class herein, and (ii) William ). Scott, Attorney General of the State of Illinois by Lee A. Daniels and Gerard B. Gallagher, Special Assistant Attorneys General, 579 West North) Avenue, Elmhurst, Illinois 60126, counsel for Fred A. Mauck, Director of Insurance of the State of Illinois, a written statement of such person's objections and copies of such papers and briefs in compliance with the rules of the Civil Practice Act of the State of Illinois. EXAMINATION OF PAPERS 18. The foregoing references to the Stipulation, the class claims and obicctions and the pleadings and documents in these proceedings are only summaries thereof and are, of necessity, incomplete. The complete texts are on file with the Clerk of this Court, Du Page County Courthouse, Wheaton, Illinois, and are available for inspection there during regular business hours. Dated: August 6, 1974 ALFRED E. WOODWARD Chief lurige 18th ludicial Circuit Du Page County, State of Illinois

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