Chicago Tribune from Chicago, Illinois • 35

Chicago Tribune, Tuesday, March 17, 1987 Section 3 3 Payments by Boesky firms OKd i rwrrra Goldberg buyback rejected by Clark Talks halt in 1.2 million-share deal By Michael Arndt Clark Equipment Co. said Monday that it has rejected an offer by corporate raider Arthur M. Goldberg to sell back 1.2 million shares of the company acquired by a Crash experts said, Goldberg's offer should be no surprise. Goldberg must file documents with the Securities and Exchange Commission within the next week stating his interests and intentions. Clarke said the company learned of Goldberg's offer Wednesday through its investment banker, First Boston Corp.

He said executives subsequently negotiated a block repurchase, but then terminated the discussions. The approach by Goldberg buying up undervalued stock and then asking the company to buy back the shares, often under pressure is known as greenmail, and it is not the first time he has made such a move. Goldberg was named president of International Controls in 198S, shortly after his hostile raid of the company was rejected. International Controls, a profitable defense contractor, at one time was headed by fugitive financier Robert Vesco. In 1984, Goldberg pressured Great Lakes International, a marine dredging firm, into paying him and other investors $3 million in green-mail by threatening to take the company private.

Earlier, Goldberg bought 8.5! percent of G.C. Murphy, a specialty retailer. He sold his stake after losing a proxy fight with management over antitakeover plans. Goldberg's group is not the largest holder of Clark stock; the United Bank of Colorado, which oversees investments for trusts and mutual funds, owns 15.5 percent of the company. ark posted a $60 million loss in 1986, but McKernan said the company expects to be profitable again late this year, helped by a 10-year, $450 million contract to make truck transmissions for Eaton Corp.

'In a dummy hospital at General Motors newer Hybrid III dummies to simulate how adults test location in Milford, "crash victims" sustain injuries In crashes. Smaller, older dum-await another round of safety tests. GM uses the mies are used to assess effects on children. Isaac named Uptown Federal trustee WASHINGTON AP The Securities and Exchange Commission said Monday it has approved applications by two limited partnerships managed by arbitrager Ivan F. Boesky to pay off $640 million in debt and shut down.

The SEC announced it had approved the applications to withdraw as registered broker-dealers by Seemala Partners L.P. and IFB Managing Partnership LP. IFB is a shell with no significant assets, the SEC said. But Seemala was a major trading entity and is the target of millions of dollars in lawsuits resulting from insider trading cases against Boesky. Seemala asked the SEC for permission to withdraw and to repay $640 million in subordinated debt, most of it at a reduced 9 percent interest rate.

The noteholders, in return for payment of the principle, would waive their rights to collect more than $100 million in prepayment penalties and additional interest. Seemala said those claims could wipe out the partnership before any other creditors are paid. With the payment agreement, Seemala said, the partnership would be left with a pool of about $278 million to pay other claims, in addition to $50 million paid by Boesky as part of his civil penalty and $11.4 million paid by fellow insider trader Dennis Levine. The application was opposed by lawyers for investors who allege they lost money because of Boesky's insider trading. They contended the payment plan Would allow investors in Boesky's funds to recoup their entire investment while allegedly defrauded investors would be left with nothing.

The SEC approved applications, but attached strings. It forbade payments to members of the limited partnerships until March 12, 1988. And partners receiving distributions must agree to accept personal liability for satisfying their pro rata share of court judgments from investor lawsuits. Boesky agreed last November to pay a $100 million penalty to settle charges of trading on insider information supplied by Levine in 198S and 1986. He also agreed to cooperate with investigators and to plead guilty to a single unspecified criminal charge.

group of inventors uoidoerg represents. The South Bend, company said it had entered into negotiations with Goldberg to repurchase the shares, which represent 6.7 percent of its outstanding common stock. But Clark said the talks were "unsuccessful" and were halted. "I can't see any reason to talk with him again," said Thomas C. Clarke, the company's senior vice president for administration and corporate secretary.

Monday's announcement came less than a week after Clark's board authorized buying back as many as 3 million common shares. In addition, the board adopted a "poison pill" stockholder rights plan to thwart hostile takeovers. Clark President leo J. McKernan said last Tuesday that the repurchase and stockholder plans were designed to boost what he said was the company's "significantly undervalued" stock, which has tumbled in the last few years amid financial troubles. McKernan also said he was unaware of any takeover bids for the firm.

Asked whether the company repurchase pi and Goldberg's offer were related, Clarke said he suspected "they might be." Clarke would not say what price Goldberg wanted for the 1,262,200 shares, but the stock has appreciated 12 percent in a little over a week, rising from $24 a share March 6 to close Monday at $26.87, up 87 cents from Friday and its highest price in more than a year. Goldberg, the president and chief executive officer of International Controls could not be reached at either the company's Boca Raton, Fla. headquarters or his offices in New Jersey. Analysts agreed with McKernan, describing Clark's stock as "undervalued" when compared with what the company could be making if it were pared down. Therefore, they UPI photo million loan by Ben Franklin on a mobile home project.

Mullin said that Uptown hopes to revive plans for an initial offering of common stock in early 1988. A planned stock sale last fall was canceled because of prospects that the price would be too low, according to Mullin. Mullin denied rumors that regulators had stymied last fall's stock sale plans because of the problems at Daly's other Leo Blaber, president of the Chicago home loan bank, confirmed that he "didn't express any objections" to the offering. After the merger, Uptown had regulatory net worth the difference between its assets and liabilities of $120 million, or about 6.6 percent of its $1.8 billion in assets, said Mullin. He added, however, that the figure contains a large amount of intangible "goodwill," the amount paid for an acquired thrift in excess of the value of its net assets.

Neither Daly nor Isaac, who now heads a Washington-based bank consulting firm, could be reached for comment. Uptown Chairman Gerald Mullin he had "no direct knowledge that regulators played a hand" in Isaac's appointment. He downplayed the significance of the action, stating that Daly hasn't played much of a role in directing the thrift's operations since last fall. "I don't think it's a major change," he said. Mullin noted that as part of the merger with the two other Daly-owned institutions, Uptown established a $34 million reserve against potential losses from commercial real estate loans booked by Ben Franklin and Palatine Savings.

Sources said the loans were made after Daly acquired the savings and loans in 1983. In the merger, Uptown acquired about $225 million in commercial loans, about $73 million of which are viewed as problem credits, Mullin said. On Monday, Mullin was in Florida to deal with a $13 The company also announced last Tuesday that it had sold its credit subsidiary to Chase Manhattan Corp. for $188 million. The proceeds will be used to repurchase stock and reduce debt Clark said it is divesting three other service businesses to concentrate on making forklift trucks, axles, transmissions and other industrial equipments.

1W7 British Airwiyi nsr Drop eve. rvrni William Isaac, former chairman of the Federal Deposit Insurance was recently named voting trustee of Uptown Federal Savings, sources said Monday. Isaac's appointment to the post means that New York real estate investor Thomas F. Daly, who owns Uptown, has relinquished operating control of the thrift by transferring his voting rights to Isaac. Regulators wouldn't comment on rumors that they requested Daly to take the step.

The move coincides with the Federal Home Loan Bank of Chicago's approval earlier this month of the merger into Uptown of two troubled thrifts also owned by Daly Ben Franklin Savings and Palatine Savings. A spokesman for the Federal Home Loan Bank in Washington declined comment on the Uptown matter. In general, however, he said that "we frequently use a trust in supervisory cases to take control from a particular shareholder. It's not uncommon." Khm 14 d.y. of depurate or imhow Mibjc ci to IHi mj this weekend and mint the town 1 1 Jbonaon.

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