-124-
4. Schnitzer/PMS Payments From 1979 Through 1989 (STJ
report at 46-49)
During the 1960s and 1970s, Kenneth Schnitzer (Schnitzer)
was a major real estate developer in the Houston, Texas, area.
Schnitzer met Ballard and Lisle at Prudential’s Houston regional
office in the late 1960s. Schnitzer, Transcr. at 2153.
In 1974, Century Development Corp. (Century), a subsidiary
of Century Corp., Schnitzer’s family holding company, acquired
for a price of $1.2 million a small real estate management
company called Fletcher Emerson Co., Inc., whose name shortly
thereafter was changed to Property Management Systems, Inc.
(PMS). Ross, Transcr. at 1213-1214.61 Previously, Schnitzer had
been involved in developing and managing high-rise office
buildings through Century. By acquiring PMS, Century expected to
diversify its operations and to secure a steady source of
earnings, because the real estate development business it also
engaged in typically was cyclical.
When Century purchased PMS in 1974, the purchase price of
$1.2 million was based roughly on five times PMS’s pretax
earnings of approximately $250,000. Ross, Transcr. at 1169,
1172; Schnitzer, Transcr. at 2149. Walter Ross (Ross) was a
61 Fletcher Emerson was purchased by a subsidiary of
Century Development Corp. known as E.R.K. Enterprises, Inc. Exh.
278, tab 6.
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