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Ballard introduced Schnitzer to Kanter sometime between the
early and mid-1970's. At some time prior to September 1976,
Schnitzer and Kanter began discussing the sale of a stock
interest in Schnitzer-PMS to Kanter. Kanter indicated that,
through his business contacts, including the Pritzker family, he
could obtain additional property management business for
Schnitzer-PMS. Before Schnitzer made the offer to Kanter,
Schnitzer had a conversation with Ballard to confirm that Kanter
could bring in business for Schnitzer-PMS.
The initial proposal contemplated that Schnitzer-PMS would
be recapitalized in order to provide for the issuance of two
classes of stock, common and preferred. The preferred stock
would be $1,000 par value per share, one vote per share, priority
as to dividends, when, if, and as declared out of available
earnings and profits up to a maximum of 8 percent of the par
value in the year of declaration, and priority on liquidation.
The common stock would be no par common stock carrying one vote
per share. Kanter's client (IRA) would purchase 50 percent of
the common stock for $50,000 and closing would be set for October
1, 1976.
Because of difficulties in finalizing the agreement,
however, closing did not take place in 1976. In a letter dated
April 12, 1977, to Melvin Dow, Kanter stated:
As you know, the president of The Cedilla Company is
Mildred D. Schott and The Cedilla Company is actively
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