Compucorp Names Katz Chairman

Bernard B. Katz, a controversial Beverly Hills financier, was elected Friday as chairman of Compucorp, a Santa Monica maker of office automation systems whose stock he controls and from whose board he recently resigned.

“I’m in as chairman of the board,” Katz said Friday. “But I won’t be active in the company’s day-to-day operations.” He would not comment on how long he will remain at the company, which in its second quarter earned $190,000, compared to a loss of $3.7 million for the same period last year.

Rescued Firm From Bankruptcy

Katz’s association with Compucorp echoes his relations with another financially strapped, high-technology company, Helionetics of Irvine.

Katz, who rescued Helionetics from bankruptcy in 1980 and now owns 19% of its stock, has twice quit the laser maker’s board in the last two years. Helionetics grew quickly in its early years. But, in the last two years, it has also had a string of declines in earnings and has been plagued with board-room bickering, changing management and worries about its image on Wall Street.

To help its image, the Helionetics board pressured Katz to resign the first time in early 1984 but then asked him back in January of this year. Four months later, he stepped down again, citing conflict of interest over properties that he owned and that Helionetics was planning to acquire.

Meanwhile, in January, Katz invested more than $1 million in Compucorp through B. K. Dynamics, an investment company of which he owns 65%. The infusion of capital helped Compucorp renegotiate $17 million in debt with Lloyds Bank of California, its principal lender.

Katz, who controls 21% of Compucorp’s stock, was elected vice chairman of the board and a member of the executive board. But, as he did at Helionetics, he resigned from Compucorp in May for undisclosed reasons. Now he is back, but he declined Friday to say why he had changed his mind.

In 1977, Katz agreed, without admitting or denying guilt, to a Securities and Exchange Commission order barring him from making exaggerated claims about products of Xonics Inc., a medical devices maker that he founded in Van Nuys and that then moved to Des Plaines, Ill.

Forced Out

Katz says he subsequently was forced out of the company, which later filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.

It was that brush with the SEC, as well as other adverse publicity generated since 1980, that led to his first departure from Helionetics. Helionetics directors felt pressure as early as 1983 from Wall Street investors concerned that his controversial business practices would tarnish the company’s image.