Word: cornfeld
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...moneymen who were vying to take over. By week's end the rescuer had not been chosen, but the flamboyant, 42-year-old Cornfeld was forced to resign as chairman and chief executive of the I.O.S. empire, which throughout Europe is now called "S.O.S...
I.O.S. president, Edward M. Cowett, also quit, though both he and Cornfeld remained as directors. The board picked a chairman, Sir Eric Wyndham White, who is the former head of the General Agreement on Tariffs and Trade (GATT), and a new president, Richard Hammerman, who is the head of the I.O.S. insurance operations and an increasingly powerful man. Their job was to make the best rescue deal possible...
Rescuers. The first offer to aid I.O.S. came from a longtime Cornfeld associate, Denver Millionaire John McCandish King, 43, chairman of King Resources, an oil and mineral exploration and development company. I.O.S. has invested millions in mutual-fund money in the company's oil and mineral ventures, but King's terms last week were harsh. For a reported $40 million injection of cash and notes, he demanded the I.O.S. presidency and complete control. The 35% of I.O.S. stock owned by Cornfeld and his chief lieutenants would be held in a voting trust controlled by King...
...mutual fund jointly with I.O.S. Last week they were putting together a group that included their cousins, the British Rothschilds, and other European bankers, to move into the Geneva situation. They would probably command more respect in Europe than Denver's King, and they too demanded that Cornfeld give up power. Six or eight other European banks and U.S. investment groups were said to be readying bids...
Margin Calls. How had Cornfeld got into such a fix? I.O.S. is a financial conglomerate that makes money in three ways: 1) from commissions on the sale of mutual funds to the public, 2) from fees for managing those funds, and 3) from underwriting, banking, real estate and insurance operations. But the prolonged bear market has reduced the asset value of most I.O.S. funds, and sales have been lagging. Commission income has fallen, and management fees are down because assets have shrunk...