Word: silberstein
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Such tactics were heavily criticized by Washington Attorney Alfons Landa, a Penn-Texas shareholder and expert proxy fighter (TIME, Dec. 17). He heads a Penn-Texas "protective committee," financed with $80,000 from Robert Morse Jr., which was formed to start a backfire and perhaps oust Silberstein from his own company. Landa charged that Silberstein himself has shared secretly in huge, illegal profits from his stock deals, is putting Penn-Texas in the hole by overborrowing and selling off company assets to finance the campaign against Morse. Some examples...
...selling off the property of a Penn-Texas subsidiary, Colt's Patent Firearms of Hartford, Conn., Silberstein raised $2,000,000 in cash, then leased back the plant at $231,264 a year for 20 years-or a total...
...selling off plants of Pratt-Whitney, a subsidiary machine-tool maker (no connection with the aircraft-engine firm), Silberstein raised $4,500,000 in cash, then leased back the plants for 30 years at a total rental of $30.9 million...
Under oath before SEC, Silberstein angrily denied any personal profit, said that his operations are perfectly legal methods of buying stock without paying more cash than Penn-Texas can afford. The stock, said he, was bought through the web of intermediaries to 1) avoid pushing the open-market price higher, and 2) get it from sources who would sell it on credit or agree to later delivery and payment. Despite the high premiums, said Silberstein, Penn-Texas bought Fairbanks, Morse stock (now about $57) at an average $52 a share...
...income rose to $4,813,000 (including $1,390,000 from the sale of fixed assets and tax credits) in the first nine months of 1956 v. only $1,940,000 for all of 1955. To buy control of Fairbanks, Morse with a total $35 million, insists Silberstein, "is what I call a smart investment. The company is sound, with excellent growth possibilities. But it is terribly mismanaged. When we move in, we will put it on its feet...