The Daily Oklahoman from Oklahoma City, Oklahoma • 19

Business SATURDAY OKL AHOM AN TIMES Gardening Religion Weather Women SATURDAY, AUGUST 30. 1986 19 Hunt Brothers Request Chapter 7 Protection for Oil Firm NEW ORLEANS t- The millionaire assets were the principal ones jeopardized by the banks' actions, the Hunts said in a statement. In the bankruptcy petition, Placid said it had assets of $2.05 billion and owed $979.33 million to creditors. Although assets were greater than liabilities, the company said Chapter 11 protection was needed t6 "ensure the viability and profitability of Placid until such time as the litigation can be concluded." The petition freezes all debts until Placid forms a reorganization plan. Nelson Bunker Hunt, Herbert Hunt and Lamar Hunt turned to bankruptcy after a federal district court judge Wednesday refused to stop the banks from auctioning off the brothers' downtown Dallas offices, oil-producing properties and other real estate valued at more than $100 million.

The first auction had been set for Friday in Mississippi. The two companies employ about 20,000 workers worldwide, with a total debt of about $1.5 billion. Dan Brown, president of Placid, said the "unnecesary expense of Chapter 11 forced on us by the banks so we can have our day in court, will be fully recoverable through the vigorous pursuit of our lawsuits against them." Placid, an oil exploration and refining company, and Penrod, the world's third-largest oil drilling company, have been hard hit by the 1986 drop in world oil prices. The two privately held companies are the mainstay of the vast Hunt family empire of energy and real estate holdings, which was valued at more than $6 billion in 1980. The banks had earlier estimated that Placid's oil and gas reserves were declining in value by more than $12 million each month and interest on the delinquent loans was accruing at a rate of more than $230,000 per day.

Hunt brothers Friday sought bankruptcy protection for one of two ailing family oil companies, which listed debts of $980 million. The filing in federal bankruptcy court here effectively halts an effort by 23 major U.S. banks to foreclose on properties pledged as collateral by the Hunts to obtain loans for Placid Oil Co. and Penrod Drilling Co. The Hunts filed for reorganization for Placid.

Only Placid and one of its subsidiaries filed under Chapter 11 of the bankruptcy laws, which provides protection frrom creditors, because their Nelson Bunker Hunt Lamar Hunt Herbert Hunt Bank Can Continue Despite Net Worth Reserve additions are taken from earnings or, if earnings are not sufficient, from stockholder's equity, a narrower measure of net worth that excludes the loss reserve. The loss from the addition is for income reporting purposes only because additions remain part of broader net worth until the losses are actually recognized. Capital forbearance was designed to ease pressure on well-managed banks with concentrations of problem loans in the energy and agriculture industries. Banks must qualify for the special dispensation and submit plans that would increase net worth by Jan. 1, 1993, to the amount usually re quired.

Bank spokesman Arthur Knoll said management's decision to restate the bank's condition was not ordered by the FDIC. He said the increase in the loan loss addition was based on new appraisals of the bank's loans to energy industry borrowers. BancOklahoma Corp. in Tulsa said in July that it would seek capital forbearance for its Oklahoma City bank, Bank of Oklahoma, Oklahoma City. The holding company reported huge losses for both the first and second quarters, due primarly to difficulties at the city operation.

But those plans became moot on Aug. 15, when the FDIC an nounced a $130 million bailout for the bank said spokesman Coy Hobbs. The deal merged the bank with the larger Bank of Oklahoma, Tulsa and heavily indebted the combined banks tc the FDIC. Officers of a small Oklahoma City bank whose net worth alsc has fallen below the re quired amount said this month that they too in tend to apply for capita: forbearance for that in stitution. Capital for bearance has beer granted to severa! banks in other states.

In another matter Noll said John Shellej resigned as president ol Union Bank last week He said Kenneth McHhaney, vice chair man and chief adminis trative officer.assumec the presidency. Nathaniel C. Wyeth poses with some of his plastic bottle designs. Wyeth's Big Brother Builds a Better Bottle Penn Bank's Practices Called 'Frightening' By Lou Anne Wolfe Kenneth G. Smith liquidator for the Federal Deposit Insurance was quoted Friday as finding "amazing discoveries that frightened me" when he arrived at Penn Square Bank in July 1982.

Smith, of the FDIC's Knoxville, office, was asked to head an investigation of the Oklahoma City bank after it failed July 5, 1982. In his deposition, read Friday in federal court, Smith said he was not allowed to enter the sealed office of Penn Square Bank senior executive vice president Bill G. Patterson for more than a week. When Smith was allowed to enter, he said his most "frightening" discovery was a trash can that contained hundreds of blank notes that were signed by people he recognized as the bank's heavy borrowers. The blank notes signed loan forms -were an indication of what some bank critics have called loose lending practices at Penn Square.

Friday ended the second week of trial for six cases stemming from the bank's failure. The first phase of the consolidated trial deals with claims against Penn Square Bank and the FDIC as receiver. Five out-of-state credit unions and a money broker have accused the bank, represented by the FDIC, of fraud. The credit unions say they relied on Penn Square Bank's yearend 1981 financial statement and audit report for the first quarter of 1982 when they bought millions of dollars worth of certificates of deposit in the bank. When Penn Square Bank was closed, the credit unions became uninsured depositors, and so far they have only recovered the $100,000 insured amount of their deposits, plus 55 percent in receivership dividends.

Attorneys spent last week trying to convince jurors that bank management either intentionally misrepresented Penn Square Bank's condition, or lacked a reasonable basis for the figures they published. Gene Castleberry and Stan Levy, attorneys for money broker Professional Asset Management read from Smith's deposition Friday. When Smith entered Patterson's office, Smith said he was "amazed" to see a letter to Patterson citing more than 2,000 technical collateral exceptions in his loan portfolio. Patterson headed the energy lending section, which held 80 percent of the bank's loans, earlier testimony showed Smith said the bank was unable to come up with a list of contingent liabilities because Patterson either "could not, would not, or did not" supply management a total of his unfunded loan commitments. Although the bank had hired John Baldwin to supervise a loan review program in July 1981, Smith said Baldwin told him the only energy loans his staff analyzed were in cases where a customer had other banking relationships with Penn Square Bank.

With incomplete knowledge of the energy loan portfolio, Smith said the bank's problem loan list did not go far enough, making it impossible to determine if it was surpassing its legal lending limits. The bank was also engaged in "rolling" interest on loans, he said. When a borrower failed to pay a loan, Penn Square Bank would often make a new loan for the full amount of unpaid principal and interest, marking the defaulted loan as paid. Smith said his findings prompted him to write Patterson and some other bank officers and directors, alleging that their actions caused losses to Penn Square Bank in excess of $100 million. Chrysler Undercuts GM With Low Interest Rate By Kevin Laval Regulators have agreed to allow Union Bank Trust Co.

to operate for the next seven years with net worth that is less than the amount normally required, the northwest Oklahoma City bank said Friday. Union is the first Oklahoma bank to disclose its acceptance in the capital forbearance program reported by regulators this spring. The bank said its primary capital, a broad measure of net worth that includes the reserve for absorbing loan losses, fell to 5.9 percent of assets after it recognized loan losses during the second quarter. Regulators generally require that primary capital be 6 percent of assets, although a special level of 7 percent has been required of many Oklahoma banks. In the capital orbear-ance agreement, the Federal Deposit Insurance Corp.

will not demand the capital goal of 7 percent unless Union's primary capital falls below 4 percent between now and Dec. 31, 1987, the bank said. The agreement began Aug. 8 and ends Jan. 1, 1993.

The bank said it amended its June 30 statement of condition filed with the FDIC to add another $1.9 million to its loan loss reserve. With that addition, the reserve balance was $6.6 million, which was 4.5 percent of total loans. The addition caused Union's holding company, Union Bancorpora-tion to lose $1.9 million for the quarter. Union Bancorporation recorded net profit of $403,000 in the quarter in 1985. The bank's assets were $244 million in its original statement of condition, published in Oklahoma City newspapers in mid-July.

WILMINGTON, Del. (AP) Nathaniel C. Wyeth is not likely to see his handiwork featured simultaneously on the covers of Time and Newsweek, the way his little brother, Andrew Wyeth, did in mid-August. But then, Nathaniel Wyeth has not been making secret portraits of a beautiful woman named Hel-ga, either. His masterpiece is the plastic soda bottle, and his gallery is the beverage aisle of the local supermarket.

In 1973, the elder Wyeth received a patent for the first plastic container capable of holding carbonated beverages without either ballooning up like a basketball or letting the soda go flat. The, bottle, made of a kind of polyester called polyethylene te-rephthalate, or PET, was gleaming, so lightweight it appeared frail, yet virtually unbreakable. It was introduced in the 2-liter size in 1978 and, after a slow start, became a favorite with both consumers and bottlers. Today, nearly all 2-liter and 1-liter soda bottles and some smaller containers are made of PET. The polyester also has been used for mustard, pickles, honey, edible oils, salad dressing, juices even peanut butter.

Airlines save $25,000 in fuel per plane each year when they use PET instead of glass for the tiny liquor bottles served to passengers, says Du Pont Wyeth's former employer. Worldwide production of PET containers this year is expected to top 6 billion, Du Pont estimates. Du Pont makes no PET bottles itself, but licenses the technology to almost 70 container makers in 12 countries. Nat Wyeth, now 74, has an artist's eye for the beauty of glass. His father, N.C.

Wyeth, was once commissioned to portray the glass-blowers of ancient Phoenicia. But Nathaniel has no qualms about his plastic pushing glass off the shelves. Actually, he is a little awed by the idea, "My biggest feeling is I never expected the thing to bloom the way it has," he said in an interview at Du Pont's headquarters in Wilmington. "When you think about this product replacing a product that was made back in the days of the Egyptians it's just hard to believe it could happen overnight, so to speak." Glass makers do not agree that plastic has put them out of date. Glass still protects foods and beverages better than PET, they say.

That is why glass is still used for single-serving soda containers, See WYETH, Page 23 By Tim Chavez Chrysler Corp. went one step further Friday in the escalated financing war among domestic automakers by dropping its interest rate to 2.4 percent lowest in industry history. This followed General Motors' first volley on Thursday, cutting its financing rates to 2.9 percent to move its huge backlog of 1986 models. A Ford Motor Co. spokesman said it would also join the fray, despite having the lowest inventory of '86 models among the domestic automakers.

Ford's program gives a customer a choice of 2.9 percent to 9.9 percent interest rates on most cars and trucks or cash allowances of up to $1,000, the company said. One local GM dealer said the amount of showroom activity Friday versus the week before was like "night and day." Sales were strong but no figures were available. "This (2.9 percent rate) has done what it was supposed to do," said Tom Williams, owner of Tom Williams Chevrolet in Moore. Caution that these rates may be "too good to be true" does not apply here, say area dealers. But one local lender, who finds his rates of 10 percent to 11 percent substantially undercut by the new automaker pro grams, says consumers should look al the whole picture when buying.

Chrysler's 2.4 percent rate will only be for 24-month loans. While you will pay little in interest expense, your monthly payments will be high. GM's 2.9 percent rate is on 36-month loans. Scott Slater, business manager for Jack Clark Chrysler-Plymouth, said rates of 3.6 percent and 4.8 percenl also are being offered by Chrysler on loans of 36 months and 48 months respectively. GM's 48-month rate also is 4.8 percent.

The breakdown of automaker interest rates vs. conventional figures, using a $10,000 car as example, stacks up like this: Chrysler's 2.4 percent interest rate over 24 months would create a monthly payment of $427.16. Interest paid by the consumer over the course of the loan would be $250. GM's 2.9 percent rate over 36 months produces a monthly payment of $290.37. Interest paid on the loari amounts to $453.

A conventional interest rate ol 10.9 percent over 48 months would create a monthly payment of $257.97, But in interest, the consumer pays an additional $2,382. These figures do not take into ac See AUTOS, Page 24 Cost of Money NEW YORK (API Money roles for Friday as of 430 p.m., as reported by Telerale Systems Telerale Interest rate Index: 5.453 Over-the-Counter Local Stocks FRIDAY MARKETS AT A GLANCE MARKET IN BRIEF N.Y.S.E. Issues Consolidated Trading Friday, August 29 Volume Shares Prime Rale! 7.50 Other OTC Quotes FoSowino are other OTC quotations provided by Adder- New York Data Discount Rale: 5.50 rale: 7.00-7.25 Broker call I MotoW 2M 3Vi Federal tunds market rate: High 5.75 low 5.6875 last 5.6875 American Leaders NEW YORK (API Sales, 4 p.m. prici and nel change of Ihe ten mosl actlt American Stock Exchange Issue trading nationally at more than si. Name Volume Last Cti 147,679.150 Amtrust 2V.

3'A Republic V. .31 New York Leaders NEW YORK (AP)-Sales, 4 p.m. price and net change ol the fllleen most active New York Stock Exchange issues, trading nationally at more then SI. Name Volume Last Chg. Ohio Edison 16,777,200 22' OwemCng 4,044,100 78 VM 1,523,100 24 PSvEG 1,483,900 45 Dressrlnd 1,416,700 174 Grolier 1,253,200 12 l' Safewaywd 1,136,700 604 3S5 1-270 i Dow Jones Averages BONDS 20 Bonds 9179 00? 10 Public Ulil 93.180.06 10 Industrial 90.250.O1 Commod futures 121.150.S8 STOCKS 30 Ind 78'J 768.63 772.00 5.75 If UK 217.45 220.25 216.57 219.15 1.65 65Stk 736.25 742.66 730.74 736.34 0.90 Standard Poor NEW YORK (AP) Standard and Poors Slock Indexes for Friday: AcadC AprlSoal Alpha El a 270.900 701 EchoBav av Bankers acceptances dealer Indications: 30-59 days, 5.50 60-B9 days, 5.41 90-119 days, 5.31 120-149 dsys.

5.31 150-179 days, 5.29 DIPharm 7 VA tmciw ra irTeln 257,700 24 1 Issues Traded Unchanged jppjp New York Index 5 7 1M ffi 1,023,200 46V Certificates ol deposit JIOO.OOO: 30-59 days, VTyThrb ill GemCrtt 8Vi 8V. uccPrt A'A 4y. Hlnderltr 214 UnOkBnk 'A tS?" USPCI OV. 40 McClane. 9 10'.

vitaPI VA MagFood 1 2A Zlm 1 1 21 42 42 Quotations provide MaflFodW by Sllfel Nlcol.us A MOTO 4 4V. Co. 961,200 10 Vs 890,800 26W 887,600 138i 1V 811,100 34 HmeShopwl 206,400 3m 3 WanoLBbB 200,000 14 PhilLg Dls 1S3.7O0 10W 1 Olllard 152.700 35V. American Sales VSl 8,290,0 Prey, full day A 780 0 Week ago fcSM Month ago 10,820,0 90-119 days, 5.30 Ito-W 1.31 400 Indus! 2L76W80 20 Tnmwt 195.62 193.03 193.79 t.33 .50 40 Utilities 270-1 year. 4.34 115.10 80.85 0.32 158.32 0.02 30.47 3022 3037 254.07 251.73 252.93 0.09 Nat'lRoy 5.81 5.93 500 Slocks N.Y.S.E.

Index London inter bk Offered Rate: 3 months, 5.75 PhllOoOd 1.25 1.75 145.32 .08 Comp. 252.93 New York Sales American Data Synthatec .1.50 1.68 Treasury Bills ij mWon; pti of 100 pet. 94.80 94.95 94.80 94 94 13 Tec 94.93 95.07 94:92 95 06 3 Aar 94.91 95.05 94.91 95.04 .12 lun 94 84 94 89 94 83 94.89 If SIS! 94 'l )ec 94.2? 94.29 94.27 94 33 10 sop aaaS xi fnu.n,?n40T.7upS2i7'M'- American Index Dow Jones Ind. 1.898.34 1.83 125.770,000 125.080,000 118.130,000 114.920.003 6-month as of Aug 25: 5J5 Treasury Bill, annualized rate on weekly average basis, yield adiusled for constant maturity, 1-year, as of Aug 25: 5.85 Treasury Blllmarket rale.l-year: 5.24-5.50 Treasury Bond market 7.20 Frl. Money-market fund: Merrill LyncJi Ready Assets: 30 day average yield: 6 52 .37 .62 Unlmonctr .31 .50 UnWEnaroy .02.06 Two years ago NEW YORK (AP American Shx Exchange Index: High Lew Close 274.02 273.01 273.85 0..