Paulson Quits Wheeling Post, Sells His Stake

Industrialist Allen E. Paulson said Monday that he resigned as chairman of Wheeling-Pittsburgh Steel Corp. after selling his 34.2% interest to Lloyd C. Lubensky, president of American Jet Industries in Van Nuys.

Paulson, 64, said he paid about $50 million for the stock “several years ago” but sold it Dec. 31 at a huge loss to offset capital gains for tax purposes. He wouldn’t disclose the selling price but said it was substantially less than the $7.75 per share, or $13.5 million, that Wheeling was trading for that day.

Lubensky, also 64, said in an interview from his Van Nuys office that he bought the stock because “I liked the company.” He said he is convinced that the ailing steelmaker, the nation’s 10th largest, will turn around. He is already a director and will likely be named chairman at a previously scheduled board meeting Wednesday in Pittsburgh.

Wheeling has been in reorganization under Chapter 11 of the U.S. Bankruptcy Code since April, 1985, when it became the first major U.S. steel company to seek protection. In 1985, the company reported losses of more than $300 million.

Paulson became chairman in September of that year and helped resolve a bitter strike. The company posted a $37-million loss for the first three quarters of 1986.

Said by Forbes magazine to have a net worth exceeding $300 million, Paulson is currently chairman of Gulfstream Aerospace Inc. in Savannah, Ga., a company that he founded and later sold to Chrysler, and he has other business interests as well.

Paulson founded American Jet about 28 years ago and sold it to Lubensky in 1982 for an undisclosed price. Lubensky sold it to Ryder Systems in August, also for an undisclosed sum.