Legal maneuverings in the American Principals Holdings case are heating up. In a big way.
Late Monday, Crown Life Insurance Co., the Canadian firm that invested $9 million into the fraud-riddled Del Mar real estate company, sued former APHI executives W. Carl Zimmerman and Hugh F. Sackett as well as Coopers & Lybrand, APHI's accounting firm, for $20 million. Crown alleged fraud, breach of fiduciary duty, conspiracy, professional negligence and violation of federal racketeering laws in the suit filed in federal court here.
Coopers & Lybrand, the suit claimed, concealed APHI's financial problems "in an effort to assist (APHI executives) to solicit outside funding to save the company and therefore to preserve substantial business and income for the San Diego office of Coopers & Lybrand."
Coopers & Lybrand officials could not be reached for comment Monday.
Meanwhile, U.S. District Judge Gordon Thompson Jr. will consider today whether to certify lawsuits brought by former APHI investors as a class action. The move would allow the plaintiffs--led by attorney Michael J. Aguirre--to take action on behalf of APHI's 2,000 investors as a group.
APHI raised about $90 million from 3,000 investors between 1977 and March, 1984. Its highly leveraged, managed assets have been valued at $250 million.
The Del Mar firm collapsed in early 1984 and was taken over by a court-appointed receiver. The Securities & Exchange Commission later sued APHI, as did scores of investors.
Shutdown Stirs Cauldron of Questions
Several investors are scratching their heads about the fate of their money after the demise last week of Concord Trading Group, a telephone solicitation company that apparently tried to sell commodities.
Authorities are also curious. The San Diego Boiler Room/Investment Fraud Task Force was investigating Concord before it shut its doors Wednesday. Despite the closure, the investigation continues, according to Deputy Dist. Atty. Robert Sullivan, who heads the task force.
Concord is a subsidiary of a Michigan management company run by Daryl Zack and his father, Samuel. The senior Zack was in charge of Premex Inc., a San Diego precious metals firms that was forced into bankruptcy four years ago by the Commodity Futures Trading Commission.
But Everyone Already Knew . . .
BetaWest Properties, a US West subsidiary, and The Koll Co. finally confirmed Monday that they had bought the 23-story First Interstate Plaza downtown.
The price is still undisclosed.
News of the sale leaked out two weeks ago, but BetaWest and Koll officials refused to discuss their purchase from Great-West Life Assurance Co. of Winnipeg, Canada.
Crisis Seen as Catalyst for Strength
Former American Motors Chairman Gerald C. Meyers, touting his crisis management book Monday at San Diego State University's annual business-faculty luncheon, said recent studies show that 52% of all corporate directors don't trust their chief executives as crisis managers.
"It's time we learn to anticipate periods of high uncertainty and great instability," he said.
Sometimes, Meyers said, companies can benefit from a crisis, because it shakes up management and elevates those who may have been mired in nowhere jobs.
Meyers' speech was titled "When It Hits the Fan." His recently released book mirrors the name.