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Two Chief UPI Owners to Yield Stock in Rescue Plan

March 07, 1985|United Press International

WASHINGTON — The two chief owners of United Press International agreed during all-night negotiations to relinquish the bulk of their stock in a plan to rescue the wire service from deep debts, UPI announced today.

A company statement also said owners Douglas Ruhe and William Geissler agreed to return operating control of the company immediately to Luis Nogales, whom they fired as president Sunday in a dispute over UPI's restructuring.

Nogales also will assume the titles of UPI board chairman and chief executive officer, it said.

The president of the employees union, William Morrissey, UPI Editor-in-Chief Maxwell McCrohon and Ruhe will join Nogales on a four-member board of directors.

Nogales and his management team will promptly ask major creditors to accept a large piece of Ruhe's and Geissler's stock in return for forgiving most of UPI's $17 million in debts.

The accord was reached after more than 20 hours of continuous talks at a Los Angeles law firm, during which the owners faced intense pressure from creditors to yield their 90% control of the company, which they purchased for $1 from the E. W. Scripps Co. June 2, 1982.

UPI sources said that after Nogales' firing, UPI's principal lender, the Foothill Capital Corp. of Los Angeles, pressured Ruhe and Geissler to relent by temporarily halting the company's revolving credit line.

The Wire Service Guild, in a message to the 900 domestic employees it represents, said about $300,000 worth of payroll checks bounced during the period between the Nogales firing and this morning.

A company spokesman, William Adler, said management had heard of only two or three bounced checks, which were immediately redeposited and covered by Foothill.

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