Lapides in court struggle for his diminished empire

Fastener company $18 million in debt, seeks to reorganize

April 17, 2001|By Gail Gibson | Gail Gibson,SUN STAFF

Morton M. Lapides Sr., the one-time bottling king whose rise and fall in the 1980s could be the stuff of Baltimore business legend, has found himself in a familiar spot - in court, fighting to keep vital one remaining venture.

Valley Rivet Co., a last vestige of Lapides' Allegheny Beverage empire, is seeking Chapter 11 bankruptcy protection in U.S. District Court in Baltimore.

The modest Annapolis-based business that stamps out metal fasteners at three Midwestern plants is juggling roughly $18 million in debt, trying to keep about 100 workers on the job.

It is a scale far smaller than Lapides, 71, once envisioned for himself. As the driven and domineering head of Allegheny Beverage Corp., he turned his family's Pepsi-Cola bottling franchise into a nationwide operation with 41,000 employees.

He was recognized by Business Week magazine as "The Dr. J of Wheeling and Dealing" for his business acumen and by the Jewish National Fund as "Man of the Year" for his philanthropic activities and his work as area chairman of B'nai B'rith's Anti-Defamation League.

By the late 1980s, his company's sales had reached $1 billion. When asked what would follow, Lapides would reply: "The next billion."

But before the decade ended, Lapides seemed to have amassed only troubles.

Allegheny Beverage crumbled under heavy debt. Lapides was convicted of price fixing in 1988 as part of a Justice Department investigation of the soft drink industry and served five months in federal prison.

In the 12 years since his release, Lapides has labored to rebuild his holdings and to clear his name. His efforts, though, have been largely unsuccessful and unnoticed.

Before Valley Rivet and parent company VR Holdings Inc. filed for bankruptcy in December, two other Lapides ventures had faltered since 1990, an Oregon salmon hatchery and a T-shirt printing business with operations in California.

Faint memories

His name now conjures up only faint memories among one-time friends and acquaintances in the Baltimore area.

"I haven't seen or talked to Mort Lapides in 12 or 15 years," said Stephen H. Sachs, the former Maryland attorney general who is distantly related to Lapides and who once enjoyed strong political support from him.

Baltimore attorney Paul A. Dorf said the last time he heard anything about his former client and personal friend was several years ago when Lapides was hospitalized and cancer was diagnosed.

Lapides declined to be interviewed for this article. He also instructed lawyers handling Valley Rivet's bankruptcy case not to comment.

In spite of business troubles, Lapides' life still is marked by the kind of luxury for which he was once well known.

He traveled with family to Europe this month, drives a Mercedes-Benz and a convertible Rolls Royce and lives with his third wife, Pamela, at their secluded 9-acre Annapolis estate. (The property was assessed by the state this year at $1.4 million.)

Some who remained close to Lapides over the past decade say the man who ruled his businesses with the slogan, "You'll do it my way," has changed little.

If anything, they say, he has become more driven and more arrogant as he has struggled to rebuild.

"He's a master maneuverer," said Carol Neidlinger, whose husband, Charles, worked for Lapides as the top executive at Valley Rivet's main plant in Aurora, Ill., during the 1990s.

Lapides acquired Valley Rivet, a privately held company, in 1989 after selling off almost all of the 30 enterprises that once made up Allegheny Beverage.

What was left behind was a corporate shell, known as Alleco Inc.; an expansive office in Cheverly, Prince George's County; an estimated $100 million in cash; and the few remaining ventures, such as Valley Rivet and the T-shirt business.

Lapides oversees Valley Rivet as chairman of its parent company; his son, Morton M. Lapides Jr., is Valley Rivet's chief executive officer.

Financial troubles

Valley thrived during the 1990s, Charles Neidlinger said, with sales climbing from about $7 million to $14 million.

But when the business started facing financial troubles in 1998, Lapides blamed Neidlinger, saying in court records that Neidlinger "abruptly resigned" as the annual audit was getting under way in 1999.

Neidlinger said the allegations were untrue and that the business suffered under Lapides' micromanagement.

Niedlinger's father had been a senior vice president with Allegheny Beverage, and the family always had supported Lapides, even after his federal conviction.

But the dispute over Valley Rivet led to an ugly falling-out and to lawsuits that were eventually settled out of court.

The courthouse clashes involving Valley Rivet were nothing new. Throughout a business career that has spanned four decades in Maryland, Lapides rarely shied from a business or legal battle.

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