Word: bellancas
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...prime example of how a raider loots a company was spread on the record in the U.S. District Court in St. Louis last week. The raider: Sydney Albert, 49, who in the past two years, through a jumble of fantastic stock swaps, stitched together 70 companies into the Bellanca Corp., then saw most of it crash last June (TIME, June 25). The victim: St.Louis' venerable N. O. Nelson Co., a large plumbing-supply house. Only last autumn Nelson had twelve-month earnings of some $200,000, plus $500,000 in cash surplus, more than $2,000,000 in accounts...
Nelson never even saw the $3,600,000 borrowed in its name. Munroe directed Heller to deposit the check in the bank account of Albert's Bellanca Corp., which used it to pay off the bulk of the Mastan debt. But Nelson had to start paying back the $3,600,000 loan in monthly installments of more than $100,000, including 12% interest...
Paper Deal. In return Nelson got only an I.O.U. from Bellanca for the $3,600,000. Albert worked a slick trick to pay off the note without using any cash. He ordered Nelson's board to vote a $33-per-share dividend, even though Nelson did not have that kind of money. Since Bellanca held all but 3% of the stock, its dividend totaled just about $3,600,000. Instead of paying the dividend, Albert told Nelson to credit Bellanca with the amount. The declared but unpaid dividend would in effect cancel out the $3,600,000 debt...
Later Albert sold Bellanca's holdings in Nelson to Automatic Washer Co. in exchange for 687,000 shares of Automatic, then worth about $5,600,000. Automatic also canceled an I.O.U. it held from Albert in the amount of $1,525,000. Therefore, Albert's investment in Nelson of $1,250,000 brought him a return of more than...
Slow-running Waltham Watch Co. last week ticked off its sixth major management switch, in the last ten years. Control of the oldest U.S. watch company was sold by Sydney Albert's Bellanca Corp. to a group headed by Joseph Axler, 44, who owns three wholesale watch companies, claims to be the largest U.S. watch distributor. He became Waltham president. In as board chairman went...