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Frates Group to Cover Losses of Partner

September 28, 1985|From a Times Staff Writer

The J. A. Frates investment group has promised to cover certain losses that might be incurred by a New York partnership that is joining it in an effort to assert control over Kaiser Aluminum & Chemical.

In a filing with the Securities and Exchange Commission, Jamie Securities, the New York partnership, said it would be compensated for its losses and paid an additional $2 for each Kaiser Aluminum share sold after Asset Management, a member of the Frates group, sells its shares. In return, Jamie promises to give Asset Management 50% of any profit that it makes on Kaiser Aluminum stock.

After 180 days, however, the Frates group will only pay the lessor of $2 a share or Jamie's per-share losses. This arrangement expires after 90 days.

As previously reported, the Frates group is seeking a "restructuring or recapitalizing" of Kaiser Aluminum, a troubled Oakland-based company.

Kaiser's management has vowed to resist the Frates group, which was involved in the acquisition of Kaiser Steel, an unrelated company, last year. The Frates group sold its interest in Kaiser Steel to its investment partner five months ago.

The Frates group owns 1.14% of Kaiser Aluminum stock, but, as a result of the agreement with Jamie, it controls 5.65% of Kaiser Aluminum's shares.

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