Del Webb Sues Calmark Over SEC Filings
Responding to a $150-million cash takeover offer, Arizona developer Del Webb Corp. sued the Los Angeles-based Calmark Holding Corp. investment group for allegedly misleading the public in filings with the government concerning the proposed acquisition.
Privately owned Calmark develops, manages and syndicates residential and commercial real estate. Last December, Calmark bought the Vagabond hotel chain from imprisoned Wall Street speculator Ivan F. Boesky.
Two weeks ago, Webb said it had asked the Calmark group for financial information so it could evaluate its $17-per-share offer, which was made Dec. 27. Getting no answer, Webb said Monday, it was left with “no choice” but to sue.
The suit alleges that the Calmark group’s 13D filing with the Securities and Exchange Commission did not disclose that Calmark President Donald J. Brumlik was disbarred in 1980, had filed for bankruptcy and has been a defendant for alleged failure to pay financial obligations in Illinois and California.
Filed in U.S. District Court in Phoenix, the suit said Brumlik was disbarred in Illinois because of a disciplinary complaint accusing him of “repeated conversion of substantial amounts of cash from clients, partners and employees.”
Brumlik said late Monday that he had “withdrawn” as an Illinois lawyer because he could not afford to fight the charges against him, but that they were not adjudicated. He acknowledged that he had been in financial difficulty in the late 1970s and early 1980s and had filed bankruptcy in 1980.
No Answer
The Webb suit also said Calmark Chairman Uri Sheinbaum has been a defendant in a number of civil suits alleging failure to satisfy financial obligations and is the subject of a civil fraud suit in connection with syndication of Texas real estate. This information was not mentioned in the 13D, the suit alleged.
Sheinbaum’s office referred inquiries to a public relations consultant, who could not be reached.
The suit also alleged that Calmark did not disclose that affiliate Northview Corp. is a defendant in a pending civil suit arising from Boesky’s criminal case.
Another defendant, New York investment banker Oppenheimer & Co., which is Calmark’s investment adviser, was accused in Webb’s suit of breach of contract and fiduciary duty. Webb alleged that Oppenheimer received confidential information as a financial adviser for the Webb-controlled Claridge hotel-casino in Atlantic City last April. No one was available for comment at Oppenheimer’s Los Angeles office.
Los Angeles-based ESA Associates made an unsolicited bid of $17.50 a share for Webb last July. The suit alleges that the recent 13D falsely said that ESA discontinued discussions with Webb after getting “a strong negative response.”
