Word: kaisers
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Dates: during 1950-1959
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When Cleveland's sly old Cyrus Eaton pulled out of his firm's contract to underwrite Henry Kaiser's new $10 million stock issue for Kaiser-Frazer Corp. in 1948, he tried to find a legal loophole to justify his action...
Eaton, who backed out because the market broke as he floated the issue, failed and a federal court last year awarded Kaiser-Frazer a $3,120,743 judgment against Eaton's underwriting house, Otis & Co. Eaton shut down his business to elude Kaiser's collectors...
...last week, Eaton had the latest laugh. Manhattan's U.S. court of appeals ruled that Eaton's contract was, indeed, invalid. In its prospectus for the issue, said the court, Kaiser-Frazer stated its earnings in such a way as to represent that it had made a profit of about $4,000,000 in December 1947. "This representation was $3,100,000 short of the truth." This failure to make full disclosure not only "violated the Securities Act of 1933" but was "a breach of the contract," even though Otis & Co. had all the facts and had helped...
Eaton isn't out of the woods yet. He and the president of Otis & Co. are still under a $3,232,329 judgment awarded Kaiser-Frazer by a state court in Wilmington, Del. in a similar suit, and Otis & Co. is still under a court-appointed trustee. But the Manhattan decision made Eaton so cocky that he predicted he would soon be back in business...
West Germans: Saw their Chancellor Adenauer dismayed. Unswerving friend of the West, he was finding his own colleagues taking deep swigs out of the Soviet bottle. Muttered Jacob Kaiser, his minister for All-German affairs: "Germany and the West must consider seriously whether or not a turning point has been reached . . ." Said Free Democratic Leader August Martin Euler, Adenauer's political ally: "For the first time, the Soviet has come up with a proposal worth discussing...