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engaged in certain phases of real estate activity. We
are hopeful that the sooner the acquisition of * * *
[Schnitzer-PMS] shares can be closed, the sooner that
serious efforts can begin to create that synergism that
could result in a sharply expanded business for * * *
[Schnitzer-PMS] in its property management through the
extensive contacts Schott maintains, the broad scope of
opportunity that may be available to Solomon A. Weisgal
and the opportunities that may arise in the course of
my practice which involves representation of numerous
very wealthy groups holding large property interests.
By letter agreement dated November 7, 1977, Kanter and
Schnitzer agreed that Schnitzer-PMS would be recapitalized and
reorganized as a Delaware corporation with an authorized
capitalization of 250 voting preferred shares of $1,000 par value
each and 108 voting common shares of $1 par value each. Each
preferred share would be entitled to a cumulative preferred
dividend of $80 per year, plus a special one-time dividend equal
to 1/250 of the indebtedness of Schnitzer-PMS to American General
Investment Corp. existing at the time the special dividend was
declared. The special dividend was to be declared when the
assets of the corporation available for payment of dividends
equaled the remaining amount outstanding on the loan. At the
time of the reorganization, $1.1 million that Century Development
had borrowed to purchase Fletcher Emerson was still owing. The
purpose of the special dividend was to permit Century Development
to recover its initial investment. Kanter's client (IRA) had the
option to purchase 51.3 shares of common stock (47.5 percent of
the common stock) in Schnitzer-PMS for $150,000.
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