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Prudential would not be paying anything for the 50-percent PMS
stock interest, Schnitzer hoped that this would result in
Prudential’s awarding 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.
Schnitzer was invited 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 Donald Knab (who headed
Prudential’s real estate department). Prudential was
particularly interested in standardizing the reports it received
on the operating results 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 PMS might be a potential conflict of interest and might
present problems under the pension laws.
Although Prudential declined Schnitzer’s offer, from 1974
through late 1977, PMS’s property management business increased
substantially, with Prudential being PMS’s biggest customer.
Pursuant to Schnitzer’s discussions with Prudential’s management
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