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F ebruary 26, 1997 • T he P or i land O bserver
GM stockholders sue
General Motors Corp Stock
holders have sued to block the $9 5
bi Ilion sale of most o f G M ’ s H ughes
defense unit to Raytheon Co.
The four lawsuits, filed Feb 5
and 6 in Delaware Chancery Court
but not made public until Monday,
seek class action status.
The lawsuits, which name GM
and its 14 officers and directors,
claim the sale o f Hughes will cheat
G M 's Class H shareholders out o f
a 20 percent premium they were
promised by the autom aker if
Hughes was sold.
Hughes Aircraft is a division of
Hughes Electronics Corp., which
also makes telecommunications sat
ellites and automotive electronics.
GM owns all o f the assets o f
Hughes Electronics, but the shares
trade as GM Class II stock and their
performance is tied to Hughes's earn
ings. Holders o f Class II stock have
dividend claims but no equity inter
est in the company
According to Tuesday’s editions
o f the Boston Globe, G M ’s corpo
rate charter provides that if the
carmaker decided to sei I all or nearly
all o f Hughes’ assets. Class H share
holders would be entitled to exchange
their shares for 1.2 shares o f GM
common stock That is the 20 per
cent premimum the suing share
holders seek and it would cost GM
about $1.2 billion.
GM could not be immediately
reached for comment, but a spokes
man told the Boston Globe the
company believes the suits were
without merit and said "we intend
to defend ourselves vigorously.”
G M ’s stock rose 50 cents at
$59.50 and G M ’s Class II stock
gained 62.5 cents to $60.625 while
Raytheon fell 37.5 cents to $47, all
on the New York Stock Exchange.
Selas posts record revenue
Selas Corporation o f America
(AMEX: SLS)reported record rev
enue for 1996. with the Company
breaking the $100 million mark
for the first time in its history.
Earnings for the year jum ped 80%
over those o f 1995.
Consolidated net income for the
quarter ended December 31, 1996,
was $ 1,409,000, or $0.39 per share,
fuIly di luted compared to $826,000,
or $0.24 per share for the similar
period in 1995, an increase o f 63%.
Net sales in the quarter were
$29,671,000 versus $17.056,000
in 1995.
For the 12 months ended De
cember 31, 1996, Selas reported
net income o f $ 4 ,130,000, or $ 1.16
per share fully diluted mpared to
net income o f $2,300.000, or $0.66
per share in 1995. Revenues for
the year were $103,426,000, ver
sus $71,215,000 in 1995, up 45%.
Stephen F. Ryan, president
and ch ief executive o fficer o f
Republic
Industries
completes
acquisition
Republic Industries, Inc. (Nasdaq:
RWIN) today announced the clos
ing o f its acquisition o f National Car
Rental System, Inc.
National, headquartered in Min
neapolis, Minnesota, operates a fleet
o f approximately 100,000 vehicles
in the United States. The company
has approximately 800 locations in
the United States and Canada and
has marketing affiliations in Latin
America, Europe, Japan and the
Caribbean
In connection with the transac
tion which will be accounted for
under the pooling o f interests method
o f accounting. Republic will issue
approximately 21.7 million shares
o f common stock
Republic is a diversified com
pany operating in the automotive,
solid waste and electronic security
industries.
Selas, said that all segm ents o f the
Com pany perform ed profitably in
1996, with the greatest im prove
ment com ing in the heat technol
ogy segm ent which entered the
y ear with a record backlog and
added to it during the year with
four m ajor new orders.
Earnings for that segm ent in
creased 204% on an 93% increase in
revenues. He said that new business
activity in that segment remains
high.
Resistance Technology, Inc., the
Selas subsidiary supplying precision
electromechanical and plastics com
ponents for the hearing aid, medical
products and cellular communica
tions industries, continued its growth
in both sales and earnings In 1996
that subsidiary showed an increase
o f 42% in earnings on a revenue
increase o f 10%.
According to Ryan.D euer Manu-
facturingv the C om pany's subsid
iary that manufactures spare tire
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Commissioner Quackenbush de
manded today that the millions o f
dollars, including interest, in unse
cured loans owed to Golden Eagle/
Mesa Reinsurance by John Mabee,
the former owner o f both compa
nies, be repaid.
On Jan. 31, I997, Commissioner
Quackenbush served a court order to
take over control and operation o f
Golden Eagle Insurance Company
The order also included putting Mesa
Reinsurance into the conservator-
ship. Commissioner Quackenbush
was particu larly concerned about the
$66 million in unsecured loans taken
by John Mabee Investigators learned
that the original indication of $66
million has increased to $69 mil
lion.
"M y first concern is for the con
sumers, policyholders, and claim
ants o f Golden Eagle. That is why I
am issuing a demand letter requir
ing that Mr. Mabee return the $69
million he owes Mesa Reinsurance
so that it will be available to Golden
Eagle policyholders. If that demand
is not met, I am prepared to tile a
lawsuit to recover the millions o f
missing dollars,” said Commissioner
Quackenbush.
"I intend to go after every nickel
o f the $69 million owed by Mr
Mabee and return it back to the
company.”
As part o f the takeover by the
Department o f Insurance, half a
million dollars’ worth o f imported
luxury automobiles owned by Golden
Eagle Insurance Company and used
by former upper-management have
been repossessed. One o f the luxury
cars seized is a 12-cy linder Mercedes
Benz, equipped with bullet-proof
windows. The cars will be sold and
the proceeds will go directly to the
companies now under conservator-
ship
"Excessive spending in the form
o f luxury cars and the $69 million in
personal loans is no way to operate
an insurance company in Califor
nia,” Commissioner Quackenbush
said
A d d itio n a lly , C o m m issio n e r
Quackenbush announced that he has
signed an agreement with Liberty
Mutual Group which will provide
financial stability and enhanced
safety for policyholders o f Golden
Eagle Insurance Company, as well
as a continued market for its agents
and brokers. Under the terms o f the
reinsurance agreem ent, L iberty
Mutual will assume 100% o f all
losses on virtually all new and re
newal policies issued by Golden
Eagle from March I, 1997, until the
completion ofthe rehabilitation plan.
"This historic agreement means
that Golden Eagle policyholders can
rest easier knowing their claims will
be backed by Liberty Mutual, a com
pany with over $5 billion in surplus,"
said Commissioner Quackenbush.
Com m issionerQuackeribushalso
announced that he issued a Request
for Proposals (RFP) for a Rehabili
tation Plan for Golden Eagle.
"Due to the increasing number o f
parties expressing an interest in this
transaction, it is necessary to estab
lish a standardized process by which
companies can develop and submit
their proposals,” said Comm issioner
Quackenbush
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holders and lifts for the automotive
industry, suffered the loss in 1995
o f a major account and that had an
impact on its performance through
out 1996. He said, however, that
this unit has been able to recover
sufficiently to end the year on a
profitable basis.
“ We expect 1997 to continue the
improvements made in 1996 and
see all segments moving forward,”
Ryan said. "From all indications at
this time, we are confident that
1997 will be another exceptional
year for Selas.”
Selas Corporation o f America is
adiversified firm with international
operations and sales that engages
in the design, development, engi
neering and manufacturing o f a
range o f products including preci
sion electronic and electromechani-
cal/plastic components, heat pro
cessing equipment and systems,
and cable winch products for the
automotive industry.
Commissioner demands
return of $69 million
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