5 Directors of KaiserTech Sue Its Chairman
Five KaiserTech directors sued company Chairman Alan E. Clore on Thursday, charging that his agreement to sell his 27% stake in the Oakland aluminum producer is a breach of contract and that he has “ceased to be a person of good repute and integrity.”
The suit seeks to block what it contends are Clore’s plans to place on the 14-member KaiserTech board eight new directors who are being selected by Charles Hurwitz, chairman of Maxxam Group. Hurwitz’s company has agreed to buy Clore’s stock holdings.
Clore “can sell his stock to whoever he wants but he has forfeited the right to nominate any members of the board,” a KaiserTech spokesman said. The right to name directors, which was granted under an agreement with Clore that ended a long takeover battle last April, is not transferable, the suit said.
No Comment
KaiserTech, parent of Kaiser Aluminum & Chemical, had been negotiating with Clore for a way to distribute his stock to the public.
The British investor was forced to sell after the October market crash put him in default on loans secured by his stock.
Clore’s spokesman declined comment. Maxxam said its contracts with Clore “are valid, binding and enforceable. We believe the court will find the legal challenge without merit.” A Maxxam spokesman said he did not know whether an agreement was reached with Clore to place directors selected by Hurwitz on the board.
The lawsuit charged that Clore planned to engineer a series of resignations of his directors, who would be replaced by nominees selected by Hurwitz.
Hurwitz agreed to set aside $4 million of the purchase price of Clore’s stock that would be paid “only if he is able to deliver the agreed-upon corporate directorships,” the suit stated.
Directors File Suit
Otherwise, the money would be used to stage a proxy fight, it said.
The suit, which calls for Clore’s resignation as chairman and as a director of the company, was filed in Alameda County Superior Court by five of the six KaiserTech directors not named by Clore.
Filing the suit were: Cornell C. Maier, retired chairman of KaiserTech and Kaiser Aluminum; A. Stephens Hutchcraft Jr., vice president of KaiserTech and president and chief operating officer of Kaiser Aluminum; John R. Beckett, retired chairman of TransAmerica Corp.; Charles A. Lynch, chairman and chief executive of DHL Airways, and John E. Merow, chairman and senior partner of the San Francisco law firm of Sullivan & Cromwell.
