Word: penns
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Dates: during 1950-1959
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Financier Leopold D. Silberstein, who won only an active ulcer in his attempt to take over Fairbanks, Morse & Co. last May, bad reason for more pain. To help pay off the huge debts contracted in the proxy fight, his Penn-Texas Corp. last week was forced to 1) omit a quarterly dividend on preferred stock, 2) sell a major subsidiary, Industrial Brownhoist Corp. of Bay City, Mich., one of the first companies in the Silberstein empire. An undisclosed buyer picked it up for $3,000,000 in cash-half of what Penn-Texas paid for it in 1954. Other subsidiaries...
...find a customer for the biggest single asset on his books-478,250 shares of Fairbanks, Morse stock worth about $20 million. But it is turning out to be his biggest liability. To buy the stock, Silberstein has to dig into scarce working capital. To replenish this capital, Penn-Texas has pledged 436,670 of the shares as collateral on emergency loans totaling $10.5 million. But to keep up the value of the shares, Penn-Texas has been forced to support the price of the stock by buying more and more...
...Invasion? To Fairbanks, Morse President Robert H. Morse Jr., who licked Silberstein in the proxy war, the heavy buying seemed a new Penn-Texas invasion. Fortnight ago, Morse angrily charged Penn-Texas with "flagrant" contempt of the Federal Court that ordered Silberstein to stop trying to take over F-M for five years. Since May, said Morse, Silberstein has bought "some 132,000" additional F-M shares "with the intent and desire of acquiring control," now owns at least 44.4% of the Chicago equipmentmakers' outstanding stock. Morse also charges that sale of the Penn-Texas holdings to another company...
Actually, Silberstein's renewed stock buying was regarded by Wall Street as less a new take-over attempt than a desperate move to save his skin. As a recent Penn-Texas report to the Securities and Exchange Commission made clear, Silberstein has "Blundered into one of the weirdest financial squeezes in Wall Street history. To buy his F-M stock, Silberstein had to scour the U.S. for loans, some carrying interest rates and other costs totaling 15%, and almost all due within a year. Just to get some of the loans from "24 banks in various parts...
...Example: Penn-Texas posted 90,000 F-M shares as collateral for loans of $2,395,000 at 6% from Manhattan Speculator Jacques Sarlie, who cleared $1,000,000 last March by selling F-M shares to Silberstein at premium prices during the proxy war (TIME, March 25). Since the Sarlie loans on 40,000 of the shares guaranteed a $53 market value per share, the F-M market price of $40 last week meant that Penn-Texas had been forced to tie up at least $520,000 in ready cash to oblige just one creditor. Sarlie loans on another...