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Salzberg Resigns as Head of Troubled Cardis Corp.

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Times Staff Writer

Jack I. Salzberg has resigned as chairman and chief executive of financially troubled Cardis Corp., the Buena Park-based auto parts wholesaler that is trying to complete the sale of its Tuneup Masters subsidiary to pay off past-due loans.

According to a statement issued by the company, Salzberg, 64, resigned for “personal reasons.” The statement said he will remain as a director of the company.

Cardis, a distributor of auto parts in the Southwest, named vice chairman and director A. Michael Victory, 53, the company’s second-largest stockholder, to Salzberg’s former positions. Neither Salzberg nor Victory could be reached for comment.

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A 1985 disclosure filed by Cardis with the Securities and Exchange Commission lists Victory as a general partner of Cumberland Investment Group in New York. According to documents filed earlier this year, Victory holds 150,370 shares of Cardis stock. Tuneup Masters Chairman Andy Granatelli, who owns 960,100 of the company’s 5.8 million shares outstanding, is the largest stockholder.

Cardis announced plans in October to sell its profitable Tuneup Masters subsidiary for $82.2 million in cash to a New York-based investment group, but the deal has yet to become final.

“It should be done by the end of December,” said David W. Olson, a spokesman for the company.

Cardis, which has more than $100 million in debt, plans to pay off a $43.5-million loan from Dresdner Bank, a West German institution, with proceeds from the sale. The loan was due Dec. 31, 1986, but was extended and is now payable on demand.

Cardis is also negotiating for extensions on loans from Security Pacific National Bank, its largest creditor but has yet to arrange a final agreement. Cardis is past due on a $34-million payment to Security Pacific.

For the fiscal 1988 first quarter ended July 31, 1987, Cardis reported a net loss of $5.9 million on sales of $59.1 million. For the 18 months ended April 30, the company reported a loss of $35.5 million. The long reporting period reflects a change in the company’s fiscal year.

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Cardis stock closed Monday at a 12-month low of 87.5 cents per share, down 6.25 cents for the day. Earlier this year, Cardis stock traded as high as $9.125 per share.

Last month, the company named James E. Lane to the position of president and chief operating officer, filling a yearlong vacancy. Lane has also been appointed to the company’s board.

Lane said Cardis has cut its losses this year by reducing operating costs and trimming inventory.

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