Elder Haft cast aside by his son

September 05, 1994|By New York Times News Service

WASHINGTON -- Only three months after reaching a settlement with his eldest son and divorced wife, Herbert Haft, the patriarch of a sprawling retailing and real estate empire here, is feuding again.

The plot of the latest battle is about as peculiar as one in any novel stocked by Crown Books, one of the companies controlled by the family.

This time, Ronald Haft, 34, the younger of Haft's sons, who Mr. Haft chose to share in his multimillion-dollar business ventures, on Saturday helped depose his father as chairman of Combined Properties Inc., one of the most lucrative commercial real estate companies in Washington.

The Haft family also controls the Dart Group, a public company that owns large stakes in Crown Books, Trak Auto, Shoppers Food Warehouse and Total Beverage.

Only days earlier, Ronald Haft had publicly objected to two checks for $9 million each that his father, 74, and chairman of the Dart Group, withdrew from the company early last month without the approval of the Dart board.

Some people close to the family said Herbert Haft may have made the withdrawals to help pay for a settlement agreement in May among members of his family.

Bruce Grace, a lawyer for Herbert Haft, said on Saturday that the checks had not been cashed.

Still, the dispute about the $18 million was one reason cited by the board of Combined Properties for removing Herbert Haft as chairman. He will remain a board member.

Robert Greenberg, a lawyer for Keck, Mahin & Cate, a law firm in Chicago retained to advise Combined Properties, said, "Ronald made this motion because of Mr. Haft's recent behavior, threatening employees, threatening to fire employees when he did not have the authority to do so."

When the Combined Properties board agreed to remove Herbert Haft, Ronald Haft proposed that the company issue an additional 3,000 shares of stock to himself, his father, and 11 top employees, Mr. Greenberg said.

Herbert Haft holds 4,600 of the 7,000 existing shares, a stake of 66 percent. With the new shares, his stake would fall to about 45 percent; Ronald Haft, who has a stake of 23 percent, would have a stake of 33 percent if the new shares were issued.

Mr. Grace said Herbert Haft would challenge the action this week in Superior Court in the District of Columbia, "because it was illegal and improper," adding, "Now, we go to round two."

Ronald Haft's lawyer, Steven Snider, declined to comment.

Herbert Haft's lawyers had gone to Superior Court on Friday in an effort to block the board meeting, but the motion was denied.

"The net effect of this requires Herbert and Ronald to agree in order to control," Mr. Greenberg said. "If they are unable to agree, the other employees will control by aligning themselves with either Herbert or Ronald."

Combined Properties, which operates more than 40 shopping centers and properties in Washington, issued a statement on Saturday announcing the changes. Neither Herbert Haft nor Ronald Haft would comment on the changes.

Signs that the Haft family's empire was crumbling came in the spring of 1993, when Herbert Haft ousted his older son, Robert, 40, from the board of the Dart Group, and replaced him with Ronald.

When Herbert Haft's wife, Gloria, who was also a board member, sided with Robert, Mr. Haft ousted her from the board as well.

That August, Mrs. Haft sought a legal separation from her husband, and later filed for divorce, charging him with infidelity, physical abuse and activity intended to lessen her control of the family holdings.

Robert Haft and his sister, Linda Haft, 44, sided with their mother in the divorce proceedings.

As part of the divorce settlement issued in May 1994, Herbert and Ronald Haft bought the interests of Mrs. Haft, Robert and Linda in the family's holdings. None of the lawyers or family members would disclose the value of the settlement.

Michael Klein, a lawyer at the time for Herbert and Ronald Haft, called the decision "the beginning of a period of peace, after a year and a month of a lot of turmoil."

But when Herbert Haft withdrew $18 million from the Dart Group without the consent of the board on Aug. 4, the brief peace was broken.

Sanford Ain, the divorce lawyer who worked with Herbert and Ronald Haft, suggested that the strain of the last year and a half had worn on both father and son.

"If they get back together, they would make a tremendous team," he said of Herbert and Ronald Haft. "But neither one can control that. They both have to want it."

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