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In 1974, Schnitzer approached Ballard (who Schnitzer had
known for many years and previously had dealt with in developing
office buildings in Houston, Texas) and offered to have Century
give Prudential a 50-percent stock interest in Schnitzer-PMS.
Although Prudential would not be required to pay for the 50-
percent Schnitzer-PMS stock interest, Schnitzer hoped Prudential
would award Schnitzer-PMS a large number of additional property
management contracts. Ballard informed his superiors at
Prudential of Schnitzer's offer.
Initially, Prudential was interested in Schnitzer's offer
and invited Schnitzer to Prudential's Newark, New Jersey,
corporate headquarters for further meetings and discussions with
Prudential's management. Schnitzer met with Prudential's senior
executives and corporate headquarters staff, including
Prudential's chairman, and with Knab (who headed Prudential's
real estate department). Prudential was particularly interested
in standardizing the reports it received on the operation of its
various commercial real properties around the country. However,
Prudential ultimately declined Schnitzer's offer because of the
substantial number of pension plans whose real estate investment
accounts Prudential managed. Prudential believed that having an
ownership interest in Schnitzer-PMS might be a potential conflict
of interest and might present problems under the pension laws.
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