Oak Industries Inc. President Raymond Peirce resigned Friday, just hours after the troubled media concern increased its estimated fourth-quarter loss provision to $115 million from $80 million because of further deterioration of its cable-TV equipment division and the possibility of settling a shareholder class-action lawsuit.
The write-offs will push Oak's net worth to a negative $58 million.
Peirce's resignation, effective May 1, comes just one month after Oak revealed that the Securities and Exchange Commission was seeking to remove four top officers, including Peirce and Chief Financial Officer Frank Astrologes.
Oak has made filings with the state indicating that the SEC is investigating allegations of misleading financial disclosures, securities trading on inside information, kickbacks and improper transactions between former Oak Chairman Everitt Carter and his friends and family.
Peirce could not be reached for comment, and it wasn't clear Friday whether his resignation was voluntary or part of a settlement with the government. He had been with the company for 24 years and had been president since 1979. A prepared release said Peirce was leaving "to pursue other business interests." No successor was named. E. L. McNeely, former chairman of Wickes Cos., continues as interim chairman and chief executive.
Oak said it is attempting to restructure the communications division "to allow it to continue in business on a more efficient basis" and is continuing to seek a buyer. The company said it will transfer additional operations from two San Diego facilities to a Taiwan plant, which will probably mean the loss of about 100 jobs in marketing, administration, engineering and design, a spokesman said.
The increased fourth-quarter loss provision "will not significantly affect the company's cash position," an Oak spokesman said.
Settlement of the class-action lawsuit brought by shareholders seeking more than $35 million in damages is being negotiated and could be announced at a conference with a federal magistrate April 18, Oak said. Shareholders have alleged that Oak management misled them about the true financial condition of the company during a 1982 debenture offering.
Oak is hoping to restructure $230 million in debt in an effort to save $28 million in annual interest costs.
On Friday, the company extended until next Friday a tender offer in which it will exchange stock, warrants and notes for the outstanding debentures. Since the offer began Feb. 8, about $182 million of the debentures, or nearly 80%, have been tendered. Oak needs only 70% to complete the restructuring.