Hafts' story is big but not unusual

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June 02, 1994|By Jay Hancock | Jay Hancock,Sun Staff Writer

Corporate family feuds get no uglier than the Hafts'.

Physical abuse, financial blackmail, safe deposit box raiding, boardroom power plays and marital infidelities are among the alleged sins committed by Haft members, one upon another.

The dispute is rooted in patriarch Herbert Haft's change of heart last year about who will succeed him as boss of Landover-based Dart Group Corp. Herbert, 73, fired eldest son Robert and anointed younger son Ronald. Herbert's wife, Gloria, and daughter, Linda, sided with Robert, launching the family into lawsuits, countersuits and big headlines.

The Hafts, at least publicly, are more vindictive and vituperative than most business families, but the source of their friction is an increasingly common one: business succession and who gets the money when Papa is gone.

A typical situation: "You've got a guy who built a business and he's ready to retire," said W. Ross Adams, president of the Baker-Meekins Co. Inc. "For the first time in 50 years, he can sit back and enjoy his family. He's got his kids, his grandkids around him at Christmas dinner -- and they're fighting."

Mr. Adams should know. His Baltimore firm specializes in strategic issues for family companies.

"The Hafts just happen to be the most visible," said Patrick O. Ring, Baker-Meekins' managing director. "There is a huge number of companies out there struggling with these issues."

One reason is historical. Thousands of privately held companies were founded by soldiers and sailors returning from World War II. Those patriarchs are now retiring or dying, and the stock in their companies has passed partially to the second, third and even fourth generations.

That's where problems arise. The more numerous the shareholders, the more divergent their interests. One family branch may want to sell the company to realize the value of its stock. Another may want to operate the company as is. Another may want to gamble, raising capital and expanding.

Now that daughters have just as valid a claim to managerial succession as sons, the potential for disputes is even higher.

"The little sister routine is one of the toughest," Mr. Adams said. "The little sister might be a Ph.D. from Harvard with an M.B.A. from Wharton. It doesn't just go to the oldest son anymore."

The slow economy of recent years, which hurt companies' results, also contributed to family angst. Ironically, so has the recovery, which boosted the need for capital as many companies faced "expand or die" dilemmas.

Mr. Adams and Mr. Ring have the job of identifying alternatives and goals for troubled concerns. Baker-Meekins isn't an investment bank, although that's where its partners' backgrounds are, and it's not a business operations consultancy or a psychological practice. Perhaps it's a combination of the three.

Most companies can solve their succession problems if all parties believe they're treated right, Mr. Ring said. Sometimes the solution is selling the firm. Sometimes it's swapping a dissenting shareholder's stock for an income-producing asset, such as real estate.

And sometimes it's what the Hafts did: buying out the other party. The Haft battle apparently ended last week in an out-of-court settlement, as Herbert and Ronald agreed to purchase the interests of Robert and Gloria.

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