Robert Haft takes stand against father over firing

September 07, 1994|By Bloomberg Business News

WILMINGTON, Del. -- Robert Haft, former chairman of Crown Books Corp. and president of Dart Group Corp., testified yesterday that his father, Herbert, who fired him in June 1993, had told him virtually all his life that he would one day run the family-controlled business empire.

The testimony came on the first day of a trial that moves the Haft family feud into open court, where Robert Haft is suing three companies controlled by his father.

In his lawsuit in U.S. District Court here, Robert Haft says he was unjustly fired as president of Dart Corp. and as chairman of Crown Books Corp. by his father. Trak Auto Corp. is also named as a defendant.

"My father always said, 'You will run the businesses,' " Robert Haft said. Robert, 41, said Herbert visited him at Harvard Business School in 1976 and 1977 to persuade him to come to work with him at Dart rather than take another position.

According to Robert, Herbert, 74, told him he would be chairman and chief executive officer within five years after joining coming to Landover-based Dart. Robert Haft joined Dart in 1977. He said he began that year by creating Crown Books, a pioneer discount book store chain that had revenue of $243 million in 1993, the last year he worked there.

In his opening remarks, Robert Haft's attorney, David Hensler of Hogan & Harston in Washington, characterized his client as a business wizard who, from 1977 to 1983, transformed a chain of drugstores founded by his parents into a diverse "corporate empire."

Robert Haft contends that his father had threatened to fire him unless he gave up his interest in the family-owned real estate company, Combined Properties Inc. Robert Haft said, too, that his father reneged after telling him in 1993 that the time was right for him to take over as chairman and chief executive of Dart.

Robert Haft is seeking 100,000 shares of Crown stock that he contends is owed him through an incentive plan. He is also asking that the jury find that Dart and Crown breached employment agreements with him that his attorney said are worth an estimated $31 million.

Defense attorney Gary Wilson, of Wilmer, Cutler & Pickering in Washington, said Herbert Haft was justified in firing his son because Robert Haft was "throwing sand in the machinery" of the Haft companies and violated his fiduciary duties. Robert Haft was creating "turmoil" to advance his plan of replacing his father as chairman and chief executive of Dart Group, Mr. Wilson told the jury.

Robert Haft's testimony was to continue today. The trial is expected to last two weeks. Herbert Haft is expected to take the witness stand at some point in the trial.

Herbert Haft controls Dart Group by virtue of owning 57 percent of its voting stock. He also controls Crown and Trak Auto Corp., because Dart owns a majority of those companies' shares.

Last week, new feuding erupted in the family.

Ronald Haft, 34, another son, said his father is trying to remove him from the presidency of Crown Books and also may be trying to bounce him from the presidency of Dart.

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

Two checks for $9 million each were returned uncashed to Dart after Herbert Haft's attorney, Michael Klein, warned that the move was "improvident."

Dart lost $6.7 million, or $4.10 per share, on sales of $1.38 billion in the year ended Jan. 31, 1994.

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