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<br />e'y M6urteln News Wed., Nov. 16. 1986. Dcnrer, Colo.
<br />~Caiser chairman u'ts'~n rox
<br />q ~ p ., Y
<br />3y MICHAEL ROUNDS
<br />cocky Mountain News Energy Writer
<br />M1fonty Rial, the 44-year-old chairman of beleaguered Kai-
<br />:er Steel Corp. resigned as chairman and chief executive
<br />;esterday in a turbulent proxy fight wRh a Rlinneap0lis
<br />stockbroker at Stouffer's Concourse Hotel -
<br />Rial's resignation came during a marathon stockholder'§
<br />meeting that served as the battleground for control of the
<br />:tistoric corporation founded by sleet baron Henry J. Keiser.
<br />The company, which has lost $12 million in the first three
<br />.luartcrs this year and lost $16 million in 2995, wants
<br />;tockholders to elect one board of directors while Minneapo-
<br />lis stockbroker Bruce E. Hendry wants to wrest control of
<br />'he company from current management with a different
<br />:late of directors.
<br />The vote, or proxy, count, however, was postponed until
<br />Monday.
<br />"It is important that we pull together," Rial told the
<br />;athering of 170 stockholders, company officials and report-
<br />;rs in resigning. "1 gotta tell you Chis is not an easy position
<br />~'.o take. 1 couldn't suffer any more paid than I do right now,
<br />:ml it Is the only thing to do."
<br />Rial, who will remain as a director, will be replaced by
<br />lames L. Marvin, one of Kaiser's six director nominees.
<br />Company o[ficials yesterday also extended the period
<br />luring which stockholders can vote for directors.
<br />Kaiser officials said they picked Denver as the spot for
<br />'heir annual meeting because of company holdings in Colo-
<br />' -ado Springs. Kaiser critics say the cotnpany selected a spot
<br />s f4 tit j ~-.^.e'+ ~~ , ~»
<br />_ ~ lrl,t
<br />
<br />~~ow climbs to 1,912.12
<br />~s 4-day rally sputters
<br />. ~,
<br />~~
<br />NEIV YORK IAP) - Stock which 41ICd in the losing direction ,'~,_
<br />Aces moved htgher yesterday, as freyucntly during the day -ended '•'s`~"'
<br />~
<br />lour-day rally sputtered, but kept up about even, with advancers out- ~ :.'
<br />~~
<br />ring. pacing decliners by roughly B to 7. .
<br />The fbw Jones average of 30 "'1'hcre was nothing really fun-
<br />~dusu~clls rme ti.05 points to damenlal driving the market to- !~~~
<br />` 9'f `L"PP,'~-~ Ibsp'S71tEt*"t!"'1 .
<br />ood ;d a record 1.919.71 on Sept. ~:rading-type activity more than
<br />'
<br />to the tact flue sessions, the av- anything else," said Jack Conlon, ;d:~
<br />. age has gained 85.49 points. ' an analyst a[ the E.F. Hutton & Co.
<br />Vntumc on the Ncw York Stock ;ecur/tics firm.'
<br />trh:mge totaled 154.57 million Profit-taking dominated the
<br />.
<br />.ores. compared wnh 150.82 mil- ,tart ot~ what turned out to be a R"~
<br />m shares 6londav. sec-saw session, while the rest was ,
<br />Dcspuc We higher Dow index, "domm;n cd by professional lrad-
<br />~c balance ut scinnersto-losers on rrs (with) httlc institutional in- '
<br />~..
<br />;e Ncw t"orb Stock F'_xchan~e - culacntcnt ~' he added. ,.~ ,
<br />.:v;:-;
<br />• ECHt
<br />PRE~TECl`E
<br />Cell: or .write Jack''Ke~
<br />Weft Evan;. 7-B, 'Dail
<br />;. i~d: > .
<br />,~~~,
<br />t.
<br />HICK OAVIS/Rocky Mountain Ness
<br />Gov.-elect Roy Romer, Heft, conducted a conference yesterday on the economy.
<br />'~"~ 3>~`''~`' ` " SUMMIT/from previous page
<br />:N~~`~,= ~ ~ ~ ~ ~ - - -
<br />other than its Calico ~ eple cry and mute some of the
<br />controversy surr'oun ol.
<br />Because of missed dl ~ payments, preferred share-
<br />holders get to name six o e 71 Kaiser board members,
<br />giving them control of the company.
<br />Kaiser's management had a slate of candidates that Ria]
<br />said were chosen at "arms length.' Heodry's group includes
<br />termer railroad executives ~qd; lawyrrs who led the Erie
<br />I~Okawanna Inc. out of bankrupltcy court,
<br />"-tCaiser also announced an inv EigaE:ion of lliel's [Snancial
<br />dealings with Kaiser and the ~Perla~t Group, a Colorado
<br />Springs-based company with w tcTl~Kaiser has millions of
<br />dollars in management contracts. ,
<br />Controversy swilled around Rial, oho has headed Kaiser
<br />since April 1905, over alleged "related party" deals involy-
<br />ing Kaiser and ~Ptima Croup, which bought into Fontana,
<br />Calif: 63sed Kaiser in a complicated set of events surround-
<br />ing the 2984 takeover of Kaiser.
<br />At issue are millions of dollars o[ management contracts
<br />between Kaiser and Perma, through which Rial entered the
<br />steel company. '
<br />Rial, who was paid $2.3 million by Kaiser last year, still
<br />heads Perma Group, so he isn't out of a job, and he'll stay on ,
<br />as a director of Kaiser because he says he is personally
<br />liable for nearly;40 million in debts he guaranteed [or the
<br />ailing company.
<br />Hendry has his own slate of directors and has been
<br />gathering proxies to vote them at the meeting for weeks. He
<br />and Rial sparred several times during the meeting when
<br />Hendry tried to force a counting of proxies.
<br />"A fortune is at stake here;' rejoined Rial after one
<br />g; 1390.'
<br />BEST OF ALL
<br />MURRAY MOTOR IMPORTS
<br />Colorado's largest exclusive
<br />MEF~C,'~DES-BENZ DEADER
<br />~~ • BEST SELECTION
<br />/ q \ • BEST SERVICE
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<br />Perrnil Number
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<br />pAppliration (Coal only) p gontl ^ Enlorce
<br />ent ^ Inspeceo~ _ .
<br />)
<br />Bledsoe sat to Romer's left a[ the summit, held
<br />at the Brown Palace Ho[cl, while Senate President
<br />Ted L. Strickland (F: 15'estminster), Romer's oppo-
<br />nent in the Nov. 4 election, sat to his right.
<br />Instead, Bledsoe suggested that the business
<br />leaders raise the money for a Denver convention
<br />center by creating a special corporation to build
<br />the convention center, whtch would then sell $35
<br />million in bonds to underwrite the cost.
<br />"If you do tttal, I'll try tb get $10 million for the
<br />economic development o[ Colorado," Bledsoe said.
<br />Alter the meeting, Bledsoe declined to say
<br />whether he'll support a E10 million initiative. add-
<br />ing that it would have to be considered along with
<br />other major espemditures in education and trans-
<br />portation.
<br />Bledsoe said during the meeting the expected
<br />windfall of tax revenues resulting from changes in
<br />the federal lax law probably won't be as high as
<br />expected.
<br />During the campaign, Romer said he would use
<br />as much as a third of the $268 million windfall he
<br />expected to finance several projects, including
<br />higher education. After the meeting, Romer said
<br />he wouldn't speculate how large the windfall will
<br />be until he sees next month's revenue projections.
<br />Romer said he considers the. construction o[
<br />Denver's new airport, the development of a new
<br />fight
<br />Rendry attempt to get the proxies counted. "I've lost a
<br />fortune, the company has-lest a. [ortulte; the livelihood'ot
<br />thousands of retirees are at stake. We'll. finish our disco;
<br />sion." .
<br />Hendry was+flj~ajler Rial.'s resignation.
<br />"1'm pleased: about some of these developments;' said
<br />Hendry in an interview. "One of the things we sought [o do
<br />was remove Monty Rial." ••
<br />The meeting was punctuated with appeals [rem retirees
<br />- including coal miners and steel workers who described
<br />decades in the mills and the mines -worried about retire.
<br />ment funds. They said they were bewildered by the tasfF
<br />moving machinations as big institutional stock holders de-
<br />cided their fate in backroom negotiations.
<br />Hendry said he thought his faction had enough votes Co
<br />install the board he backs, but Itial disputed that, saying "it
<br />would have been close."
<br />in a meeting with reporters after the meeting, Rial,
<br />visibly tired after 24 hours without sleep, said Re'd been
<br />thinking about stepping down Inr days but made the actual
<br />decision "in the last 24 hours."
<br />•'We approached Ilendry on through the night, trying to
<br />get together with a shared slate (o[ director candidates);'
<br />said Rial. "But he wanted [o be chairman of the company."/
<br />"1 voted for Bruce Hendry because I know him, and I art!
<br />worried about the deterioration of [he company;; said stock-
<br />holder Howard Leppla, an investor from Minneapolis.
<br />Tamara L. Miller, chief financial officer of MPM Finan-
<br />cial Corp. of San Francisco, represented 110,000 shares of
<br />the two issues of preferred stock able to vote at the meeting.
<br />Two years ago, the Kaiser stock was trading for up to $70
<br />a share, she said, but is now trading for just over $1.
<br />convention center in Denver and improving the
<br />state's higher education system as his probable top
<br />priorities for his first year in office.
<br />Some participants questioned.whether lwe Den-
<br />ver projects such as the airport and the convection
<br />center would receive statewide support.
<br />"I'll tell you right nose, the people in Cortez are -
<br />going to be hard to convince that they should pay
<br />for something in Denver;' Bledsoe said.
<br />When he was elected, Romer said he would spent
<br />the TO days before he took office building a major
<br />economib development effort. Yesterday, many of
<br />the participants praised Romer's e[forts.
<br />"The tone is positive," said Jack A. IsfacAllister,
<br />chairman of U 5 West, the state's largest employ-
<br />er, and an outspoken critic of the state's business
<br />clirnate under outgoing Gov. Richard D. Lamm.
<br />"We said that unless we saw some improvement
<br />(in the business climate), we would not grow in
<br />Colorado," lsfacAllister said after the meeting. "I
<br />think we've seen enough significant progress al-
<br />ready that see will be willing to grow in Colorado
<br />again."
<br />MacAllister and Mizel responded to Romer's
<br />suggestion that the state promote itself at Staple-
<br />ton International Airport by pledging $10,000 from
<br />each of their companies for an advertising pro•
<br />gram.
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