Newsday from New York, New York • 39

I XMUttxttffffwffflt tm ww frrrrmiwiTvy-vcw rm 7 Merrill Lynch Sues 3 LI Brokers They also asked that Merrill claim and any counterclaims be submitted to arbitration by the New York Stock Exchange Recruiting of brokers had been increasing in the securities industry which until last month hd been experiencing a downtum in revenues as a result of the lackluster stock market According to court papers filed by Mendoza Merrill Lynch was not above the practice He said that he was paid $5000 by Morrill Tjnglifafii liifaniM in hiring to the firm William Carroll a broker who had been with Dean Witter Riveihead office He added that his former branch manager Warren Moore had a standing ofifor of $5000 to any Merrill Lynch broker who ifad in successfully recruiting brokers from other firms Earlier this year A New York Stock Exchange arbitration panel ordered Drexel Burnham Lambert Lie to pay Merrill lynch $250000 for luring away star employees in New Orleans Earlier a Merrill lynch claiqi against Drexel had been rejected by State Supreme Court justice in Mmlmttjn town office also until July 20 grossed $336716 Yesterday Justice Frank DeLuca sitting in Biverhead heard arguments on a motion by Thomas Smith a lawyer for Merrill Lynch seeking a preliminary injunction that would bar the three brokers from Merrill Lynch customers for a year He took the motion under advisement according to Thomas Cumin a Manhattan lawyer wyrMMiting thiwn hi court papers Merrill Lynch said that the three secretly pid and coordinated their move to Hutton that Hutton offered them special and inflated nrtmpanmntinn in addition to normal compensation and comndssions to make the switch and that Hutton guaranteed to pay each of the three $6000 a Mnth if they were barred from soliciting Merrill Lynch customers The three denied Merrill daims in court papers nd argued that Merrill Lynch which has 40 brokers in Melville and 14 in Smithtown and more than $4 billion in revenues cannot possibly be harmed by their move They said a preliminary injunction would force them out of business By Alan Wax Melville Three top stockbrokers who left Long TalanH offices of Merrill Lynch Pierce Fenner Smith Inc to open a Melville office for EF Hatton Co are being sued by their former employer for a total of $378 million In papers filed Monday in State Supreme Court Hauppauge Merrill Lynch charged the brokers with Hraarfi rf timir amploymant iwntwirti ataaliwg wm fidential customer records soliciting Merrill Lynch customers unfair competition among other things The largest securities firm said that the actions of the brokers would cause it irreparable harm unless they were barred from continuing their activities The brokers are Arthur Malkin 7 "fdhtrose PL Melville Larry Book 6 Locksley CatConLoack and Arthur Mendoza 18 Wheatly RcL tgjvBrook According to court papers Malkin Kook who worked at Merrill Melville office until July 20 had gross commissions last year of $358376 and $340855 respectively according to court records MfnAw who worked at the Smith- Defense Dept Neutral on Bendix Bid New York saying it had followed ruling and filed its suit in federal court in Maryland The suit alleged that besides violating federal securities laws Martin offer was unfair to Bendix stockholders and that Martin Marietta could not adequately finanra its proposal tender offer is a desperate defensive ploy which is ill-conceived inherently unsound and grossly unfair to Bendix the suit said "As such it could not on its own merits achieve the purpose of defeating tender Marietta would nave to borrow about $900 million to finance its bid Bendix claimed A telephone call to Harwood after statement went unanswered In New York Stock Exchange composite trading yesterday common stock closed at $55875 a share up $2875 while Martin common tumbled to $37 each liam Agee who said Bendix "can assurer Carlucd that no adverse impact would result from the merger hi Bethesda Martin Marietta spokesman W8 Harwood dnglinnd comment on the letters Meanwhile the two companies continued skirmishing in the courts Martin Marietta said UJ5 District Judge Joseph Young in Baltimore granted its motion blocking Bendix from suing Martin Marietta in the UJS District Court for Michigan suit aliasing Martin offer violates federal securities law followed a claim filed in the US District Court four Maryland by Martin Marietta which charged Bendix with also violating federal securities laws in connection with its offer Young instead ordered that claim also must be pursued in the UJ3 District Court for Maryland Martin Marietta said Tartar in the day Bendix released a statement in I i i New York CAP) The Defense Department does not support or oppose Bendix proposed acquisition of Martin Marietta Cotp according to a letter from Deputy Defense Secretary IVank Carlucd that was released by Bendix yesterday Bendix has proposed a $43-a-share offer for the stock of Martin Marietta while Martin Marietta responded with its own offer to buy Bendix at an average price (65 a share The campaniss have rejected each offers both of which are valued at about $15 billion -Bendix based in Southfield Midi is a diversified manufacturing concern serving the aerospace automotive and other industrial markets Martin Marietta quartered in Md is an aerospace company with interests in aluminum and chemicals Both are mqjor defense contractors hi his letter Carlucd said the Defense Department "is not aware of any information that suggests that it hnmld either support or proposaL "However when a merger of two major defense contractors is proposed we must necessarily be concerned over the impact that the action might have on such important considerations to this department as contract costs the quality of the supplies equipment and services being provided delivery schedule and in general the management attention to defense Carlucd wrote "In this BTwtim I solicit your assurances that there will be no adverse impact on defense pmPtams as a result of your proposed he said Bendix also released a letter from its chairman Wil- New Deadline on Debt Swap Electro Audio Dynamics Inc of Great Neck has extended the time period for debt holders to swap same long-term debt for a package of cash securities and shorter-term debt because of a fer "August is not the best month to do an exchange because many bond holders are on vacation Davis said about the lagging response The tender offer began in early August Davis said that the firm might not go through with the swap two-thirds of the outstanding debentures are tendered Davis said that the firm will consider selling its unprofitable audio business which includes the Peerless and Infinity loudspeaker lines regardless of whether the exchange offer goes through The electromechanical products group is profitable Davis said Electro Audio is offering $85625 in cash $300 principal amount of 17 per cent senior notes due 1987 and three shares of 8 per cent convertible preferred stock with a par value of $100 in exchange for each $1000 worth of debentures Phil Mints Electro Audio which and distributes audio products and electrical devices is attempting to reduce its debt-interest expense and restore the firm to profitability The company reported a deficit of $28 million for the three quarters ending May 1- Scott Davis executive vice president of the firm said yesterday that only 52 per cent of the $127 million worth of the 12J575 per cent senior debentures the company wants to exchange had been tendered through Aug 31 the original expiration date of the offer Debt holders now have through Sept 17 to tender their debentures which are unsecured bonds Caesars World Will Sell Ontel Corp World Inc which acquired the Woodbury- based Ontel Corp six years ago announced Wednesday timt it readied an agreement in principle to aell the impiyfitaihls computer subsidiary to Visual Technology Trip for an undisclosed sum Ontel which was founded in 1968 manufactures computer terminal systems and microcomputers Visual Technology of Tewksbury Mass produces video display compiiitwr terminals The take-over is subject to the approval of the boards of directors of Caesars World and Visual Technology For the fiscal year ended July 31 Ontel ported sales ofnearty $30 million but had lost $238 minion through ogy said that mieramputer product line is totally complementary to ours and is a logical extension of our terminal In another merger Computer Associates Inc of Jericho has its plan to acquire Phoenix-based Capex Corp for stock valued at about $246 million Both companies market and develop computer software Under terms of the acquisition Capex shareholders will receive a total of 118 million shares of Computer Associates stock on a one-for-one basis with fractional shares receiving cash based on over-the-counter bid price of $2075 a share ThomaaA of ViiualTechnol- Tiehaid Sandomir afilsO vCVi 'i 'Cj L- -i 1 fbl 1 a Ot a 1 a.