Southmark Corp.'s two top officers have resigned, breaking a weeklong deadlock on the troubled Dallas real estate concern's four-member board.
Southmark said Gene Phillips, chairman, president and chief executive, and William Friedman, vice chairman and secretary, had resigned as officers and directors. Arthur Weiss, former assistant to the chairman, will replace Phillips.
Southmark said the resignations end a deadlock on the board without protracted litigation at a time the company needs to resolve a severe cash squeeze.
"Much has been made in the press of transactions among Southmark and its executives and related companies. I want to assure our investors that the company's management and its board of directors are dedicated to operating the company for the primary benefit of its security holders, to respecting the integrity of Southmark's public subsidiaries, and to scrupulous compliance with regulatory requirements," Weiss said.
The board hit an impasse last week when two outside directors refused to automatically renew $10 million in loans that the two officers had borrowed to cover margin calls after the October, 1987, stock market crash.
Shares in Dallas-based Southmark, which have slumped in the past year, closed up 12.5 cents at $2 on the New York Stock Exchange.
Several investor groups, including the Pritzker family of Chicago, were reported to have held talks with Southmark about acquiring all or part of the firm.