Haft family feud escalates father, last ally at odds

September 03, 1994|By Bloomberg Business News

WASHINGTON -- Ronald Haft says his father Herbert, chairman of retailing conglomerate Dart Group Corp., is trying to remove him from the presidency of Crown Books, a Dart unit, and also may be trying to bounce him from the presidency of Dart.

The younger Haft, meanwhile, is orchestrating an attempt to topple his father from control of the family's real estate holdings.

At a Sept. 7 Crown board meeting, Herbert Haft plans to propose that Ronald Marshall be named the new president of Crown Books, which is 51 percent owned by Dart, according to a declaration filed in the District of Columbia Superior Court by Ronald Haft.

A meeting notice drafted by Michael Klein, Dart's lawyer at Wilmer, Cutler & Pickering, said the purpose of the Sept. 7 board meeting would be to consider Mr. Marshall's employment as the president and chief operating officer of Crown.

The attempt to oust Ronald is yet another incident in the continuing battle in the Haft family for control of the family businesses and fortune. Until recently, Ronald was the last member of the family still supporting Herbert.

The boards of Dart and Crown are identical. While Herbert Haft controls 57 percent of the voting rights of Dart Group, the six-member Dart board is composed of Herbert and Ronald Haft and four independent directors.

To remain president of Crown Books, Ronald will need the support of at least some of the independent directors. However, because Herbert has voting control over both Dart and Crown, he could replace the independent directors with a new slate at the annual meeting of shareholders next summer.

Besides the Crown board, Dart Group will have a board meeting on Sept. 7. Lawyers for Ronald say that Herbert also probably will try to fire Ronald from Dart, where he is president, at that meeting.

Mr. Marshall joined Dart in 1991 as senior vice president and chief financial officer. At the same time, he was appointed treasurer at Trak Auto, another Dart unit, and chief financial officer at Crown Books.

Herbert Haft failed yesterday to stop an attempt by Ronald Haft to dilute the elder Mr. Haft's control of a separate company that holds the family's private real estate interests.

D.C. Superior Court Judge Ronald Wertheim refused Herbert Haft's request to stop a meeting sought by Ronald today of the board of Combined Properties Inc., which holds the family's private real estate interests. The board plans the meeting to authorize the issuance of additional stock to company executives, diluting Herbert Haft's interest in the real estate concern and threatening his control.

If new stock in Combined is issued, it couldn't be voted for 10 days. This will give Herbert time to go to court to prevent it from being voted if he feels that the stock was granted illegally, Judge Wertheim said.

A lawyer for Ronald Haft said at the hearing that Ronald sought the session because "on no fewer than three occasions in the past 10 weeks Herbert Haft has attempted to take money from companies he controls."

The dispute over control of Combined Properties comes on the heels of news reports that Herbert Haft borrowed $18 million from Dart, which he controls, without the board's permission.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.