Clore Pays Off a $6.9-Million Debt to Jefferies

Jefferies & Co. said companies controlled by former KaiserTech Chairman Alan E. Clore paid Jefferies about $6.9 million to satisfy a debt resulting from Clore’s purchase of KaiserTech limited common stock last October.

The stock purchases, ordered by Clore and entities he controlled, were responsible for almost all of a loss reported in the fourth quarter of last year by Jefferies, the Los Angeles-based securities firm that executed the order.

Clore acknowledged in a filing last December with the Securities and Exchange Commission that he had placed orders with Jefferies in October for $17.2 million worth of KaiserTech stock but had not paid for the shares.

Clore ran into trouble after the Oct. 19 stock market crash when declining stock prices put him into default on loans secured by his KaiserTech stock.

Jefferies and Clore executed an agreement in December that the stock would be sold after Dec. 31 or when Clore agreed to sell his stake in KaiserTech. Jefferies said Wednesday that the $6.9 million payment satisfied all of the debt owed under the agreement. The payment will be treated as income in its second quarter, Jefferies said.

Jefferies’ parent, Jefferies Group, reported a net loss of $853,000 for the fourth quarter. When the company became owner of the KaiserTech stock, it incurred a pretax loss of $9.7 million. A later increase in the value of the stock resulted in a reduction of the pretax loss from the Clore transactions to $1.6 million, Jefferies Group said.

On Tuesday, Clore resigned from KaiserTech, the parent of Oakland-based Kaiser Aluminum & Chemical, after the company bought his remaining stake of 488,600 shares for a negotiated price of $17.375 a share.

Clore, a British investor, gained control of KaiserTech in 1986, when he became an equal partner in an investment group led by Joseph A. Frates of Tulsa, Okla. Frates had launched a hostile takeover of the company but sold his stake to Clore as part of a reorganization of the concern.