The Los Angeles Times from Los Angeles, California • 40

lot angtle Zimtt April 22, 1975 Part III 13 DUBBED 'BATTLE OF THE CENTURY' Equity Funding Class Suit Opens fraud at Equity Funding. Before leaving Chicago last week, Scott told reporters the class action was "the court battle of the century" because it involves so many giant businesses and major lawyers. It isn't likely that all the issues in the case will be resolved for a year or more. Judge Lucas, after hearing the arguments Monday, took the motions to drop certain defendants from the complaint under advisement. Important Notice Of Cash Offer To Purchase Shares of Common Stock of Commonwealth Oil Refining Company, Inc.

at $11.50 Net Per Share SMITH ings by jokingly suggesting that the participants pose for a group photograph to mark the "historic moment' Marshall Grossman, the Los Angeles attorney pleading the plaintiffs' case, was accused at one point of being an "emperor" who seeks to rule through a "colossus" an amended complaint which consolidates 117 separate actions in the Equity Funding civil proceedings. At another point, Judge Lucas was applauded for his "Solomon-like" wisdom in presiding over the two years of legal wrangling thus far. The judge demurred, asking if that referred to one of his friends, Gus Solomon. Monday's three-hour meeting was called to hear defense objections to the complaint. Many of the more than 200 defendants have asked to be dropped from the lawsuit for a number of reasons.

The tangled legal battle grows out of a mammoth insurance and securities fraud at Century City-based Equity Funding, which collapsed into bankruptcy in April, 1973. The plaintiffs include Equity Funding's shareholders and some of its creditors. The defendants include banks, brokerage houses, former Equity Funding officials, pension funds, college endowments and other individuals and companies. Damages sought in the case run into the billions. Illinois Atty.

Gen. William J. Scott, whose state is named as a defendant because its insurance regulators were charged with overseeing Equity Funding Life Insurance argued that his state should be dropped from the complaint because of "sovereign immunity" guaranteed to states by the 11th Amendment to the U.S. Constitution. He told the judge that Illinois taxpayers shouldn't be held liable for BY HARRY ANDERSON Times Staff Writer More than 100 attorneys packed the courtroom of US.

Dist. Judge Malcolm M. Lucas here Monday to kick off what the Illinois attorney general modestly dubbed "the court battle of the century." The lawyers argued their clients' positions on certain pretrial motions in the multibillion-dollar civil class action lawsuit arising out of the Equity Funding Corp. of America scandal. Judge Lucas opened the proceed- STOCKS Continued from 10th Page Advancing groups included steel, farm implements, glamors, airlines, and oils.

Burroughs surged 3V4 to 9934 and IBM gained 4 to 2334. Gold stocks fell, however, as bullion prices dropped. ASA, was off 3 at 67V4 and Homestake lost 1 to 43. The preliminary count on large block trades of 10,000 or more shares, traded on the NYSE, was 114 compared with a revised total of 168 for Friday. Big block trades included 161,200 shares of Chase Manhattan Corp.

at 3234, off 83.000 of Ralston Purina at 38, unchanged; 30,000 of Dart at 2314. up 50,000 of Zenith Radio at 22V4, up 106,800 of Brunswick at 13V6, up Va 60,000 of American Airlines at 914, unchanged; 51,700 of Control Data at 20Vi up IVi; and 105,000 of Masonite at 25, up 34. On the Amex 384 issues advanced against 279 declines among the 963 issues traded. Amex volume expanded to 2.75 million shares from 2.54 million shares Friday. The most active Amex stock was Buttes Gas, up 34 to 20 V4, followed by McCulloch Oil, up to 4 with a block at 4.

OTC stock sales were an active 5.82 million shares. The OTC volume leader was Rank Organization ADRs, off to 3, followed by Dorchester Gas, up to 8. Combined Insurance rose to 11 34, BankAmerica gained 1 to 41 and Citizens Southern National, added Va to close at 7 Vi In over-the-counter trading, 482 issues advanced and 306 declined among the 2,481 issues traded. There were 150 new yearly highs and 10 new lows. Continued from 10th Page in or acquiesced in schemes and devices to defraud Westgate and its public shareholders, debenture holders and creditors.

The defendants "created the illusion" that the company was "honestly run and profitable" to attract innocent investors, the complaint said, while in reality the defendants diverted profits and aporopriated assets of the corporation for their own benefit. The exploitation of Westgate, the complaint alleged, was accomplished through the use of ostensibly independent transactions involving many of the defendants, by which they wrongfully appropriated money, assets and credit for their own gain. The complaint said these transactions were almost always financed by U.S. National Bank, itself a major beneficiary of many of them. In particular the bank benefitted during "an extensive period in 1973" when it controlled and dominated Westgate, the complaint said.

Smith and Toft are scheduled to be tried in mid-June on felony charges that they diverted millions of dollars from U.S. National Bank for their own benefit. The suit filed Monday asks more than $500 million in general damages and not less than $1 billion in punitive damages. Tesoro Petroleum Corporation is offering to purchase shares of Common Stock of Commonwealth Oil Refining Company, Inc. at 1 1 .50 net per share to the seller in cash.

The Offer is being made only by, and on the terms and conditions set forth in, the Offer to Purchase dated April 18, 1975 and in the related Letter of Transmittal. Tesoro will purchase all shares which are duly tendered by 10:30 a.m., New York City Time on April 30, 1975, up to 5,500,000 shares. If more than 5,500,000 shares are duly tendered by 10:30 a.m., New York City Time, on April 30, 1975, Tesoro will purchase at least 5,500,000 shares and Tesoro may elect to purchase all or any part of the shares tendered in excess of 5,500,000 shares. If more than 5,500,000 shares are duly tendered by such time and if Tesoro elects to purchase less than all the shares so tendered, all shares purchased will be purchased on a pro rata basis, with appropriate adjustments to avoid the purchase of fractional shares. If less than 5,500,000 shares are duly tendered by 10:30 a.m., New York City Time, on April 30, 1975, Tesoro will purchase all such shares.

Shares tendered may be withdrawn at any time prior to 10:30 a.m., New York City Time on April 28, 1975 or, if not theretofore purchased, after June 15, 1975. Tenders are otherwise irrevocable. HOUSING INDUSTRY THE OFFER EXPIRES ON APRIL 30, 1975 AT 10:30 A.M., NEW YORK CITY TIME, UNLESS EXTENDED. Continued from 10th Page Chiefly because of this, he feels investment in residential structures in terms of national income accounts will decline 15 in real terms from 1974, and incremental demand for building materials will not pace housing starts. Despite the fact that the investment tax credit was recently liberalized by the Tax Reduction Act of 1975, as Smith Barney analyst Bruce Babcock sees it, its impact on capital spending will not be seen until 1976.

Says Babcock in a recent memo on the impact of the act on machinery companies: "We do not expect the liberalization of the ITC to be a significant stimulus to capital spending in 1975." For he adds that "in our opinion, there is too much slack in plant utilization and businessmen's confidence in the economy is too low for this tax change to have a major impact on investment plans." But then he feels that by the second half of 1976 the 10 income tax cut should have a very salutory effect on investment in plant and equipment. Moreover, if the ITC won't stimulate capital spending this year, he does feel that companies already planning large programs should gain major tax savings this year. Navy Plane Contract WASHINGTON (DJ)-Grumman Aerospace Corp. received an $8.5 million Navy contract for procurement of E-2C early warning aircraft. This advertisement is neither an utter tn sell nor a solicitation of offers to buy any of these securities.

The offering is made only by the Prospectus. Tesoro will pay a solicitation fee of $.42 to any Soliciting Dealer (as defined in the Offer) whose name appears in the appropriate space provided in the Letter of Transmittal for each share duly tendered and purchased pursuant to the Offer, including any shares purchased from Soliciting Dealers tendering for their own accounts, provided that such Soliciting Dealer is performing an arbitrage function. IMPORTANT Any stockholder desiring to accept the Offer should either (1) request his broker, dealer, commercial bank, trust company or nominee to effect the transaction for him or (2) complete and sign the Letter of Transmittal or a facsimile thereof, have his signature thereon guaranteed and forward the Letter of Transmittal with his stock certincate(s) and any other required documents to the Depositary or Forwarding Agent. Stockholders having shares registered in the name of a broker, dealer, commercial bank, trust company or nominee are urged to contact such person if they desire to tender their shares. The Offer to Purchase and the Letter of Transmittal should be read before any action is taken.

A tender may be made only by a duly executed Letter of Transmittal or a facsimile thereof. April 22. 1975 imam 2,100,000 Shares R. J. Reynolds Industries, Inc.

Common Stock (55 Par Value) Payment for all shares duly tendered and purchased pursuant to the Offer will be made as soon as practicable after April 30, 1 975. Stockholders will not be obligated to pay brokerage commissions on the tender of Commonwealth Oil Common Stock to Tesoro. Continental Illinois National Bank and Trust Company of Chicago will act as Depositary and United States Trust Company of New York will act as Forwarding Agent. The above shares of Common Stock arc being acquired by the several Underwriters following the purchase by the Underwriters of 1,400,000 shares of $2.25 Convertible Preferred Stock of R. J.

Reynolds Industries, Inc. from certain stockholders of the Company and the conversion by the Underwriters of the preferred shares into shares of Common Stock of the Company. Each share of Preferred Stock is convertible into 1.5 shares of Common Stock on the surrender of the preferred share and payment to the Company of $22 in cash. The Company will receive only those proceeds resulting from the cash payment upon conversion of the Preferred Stock. Requests for assistance or copies of the Offer to Purchase and Letter of Transmittal may be directed to the Dealer Manager, any registered broker or dealer, or Price $56.50 per share D.

F. KING INC. 555 California Street San Francisco, California 94 1 04 (415) 788-1 1 19 (collect) 20 Exchange Place New York, New York 10005 (212) 269-5550 (collect) Two North Riverside Plaza Chicago, Illinois 60606 (312) 236-5881 (collect) Copies of the Prospectus may be obtained from such of the underwriters as arc registered dealers in securities in this State. The First Boston Corporation Dealer Manager Donaldson, Luf kin Jenrette Securities Corporation Drexel Burnham Co. InrMi'imriiifil Hutton Elr Halsey, Stuart Co.

Inc. Affiliate nf Itnrlic Co. Incorporated Kidder, Peabody Co. Hornblower Innirimnitcil Kuhn, Loeb Co. Lazard Freres Co.

Blyth Eastman Dillon Co. Inroriifiriili'd Goldman, Sachs Co. K.F. Ilutton Company Inc. Lehman Brothers hirurjiiiriiU'tl Incoi iionitt'il Loeb, Rhoades Co.

Merrill Lynch, Pierce, Fenner Smith liiiot poriiliti Salomon Brothers Smith, Barney Co. Reynolds Securities Inc. E. F. Hutton Company Inc.

One Battery Park Plaza, New York, N.Y. 10004 (212) 742-5000 (collect) This announcement is not an offer to purchase or a solicitation of an offer to sell these securities. The offer is made only by the Offer to Purchase and the related Letter of Transmittal and is not being made to, nor will tenders be accepted from, holders of Common Stock in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities or blue sky laws of such jurisdiction. April 1 9,1 975 Jackson Curtis litciiriiitnilvil Wertheim Inc. Shearson Hayden Stone Inc.

Batcman Eichler.Ilill Richards liiroi (mnilcil Iitfiii'iiorali'tl White.Weld Co. Dean Witter Co. Im-itriiunifwl Incorporated Warburg Paribas Becker Inc. Crowell, Weedon Co. Stern, Frank, Meyer Fox I ni'oi pointed Wagenseller Durst, Inc..