CPC Co-Founder James Conte Retires : Executive: Richard Conte will succeed father as chief executive of Community Psychiatric. No new chairman named.

James W. Conte, who co-founded Community Psychiatric Centers and helped build it into one of the nation’s largest psychiatric hospital chains, announced Wednesday that he has retired as chief executive and will step down as chairman on Nov. 30.

Conte’s son, Richard, the president of the Laguna Hills company, will succeed his father as chief executive. Company directors have not yet named a new chairman.

James Conte, 64, had planned to retire for some time but his departure was delayed because of “recent problems and changes in the psychiatric hospital industry,” according to a company statement. He announced his retirement Tuesday at the company’s annual management meeting in San Diego.

Recently, the company has been hurt by a slump in the mental health care industry. Earnings have declined because of cost-cutting measures by managed-care companies, and patient days in the hospitals have fallen.

The company’s earnings for its first quarter ended Feb. 29 fell to $6.9 million, from $21.1 million a year earlier. Revenue dropped 18% to $84.5 million from $103.1 million the year before. Company officials said they expect earnings to improve in the current quarter because of a settlement with a Canadian insurer over disputed payments.

Conte co-founded the company with Robert Green in the early 1960s. Over the years, CPC has had a reputation as an efficiently run, well-managed provider and was once a darling of Wall Street. From the time the company went public in 1969, it recorded 20 consecutive years of improved earnings.

Conte prided himself on keeping costs low and keeping a close eye on details, checking himself into each one of the company’s hospitals every year to make sure everything was in order.

Conte, who made up to $8.6 million in the late 1980s, was named CEO of the Decade by Financial World magazine.

More recently, however, an industry slump and uncollectible debts have taken a toll on the company. And the company and industry have faced some bad publicity.

The Texas attorney general included CPC and two other psychiatric hospital chains in an ongoing investigation into alleged insurance fraud. The investigation began with allegations of impropriety against Psychiatric Institutes of America. No charges have been filed.

CPC has denied any wrongdoing, and spokeswoman Suzanne Hovdey said Wednesday that the Laguna Hills company was included in the Texas investigation “because we are in the same business.”

The elder Conte served as chief operating officer until 1977, when he was named president and chief executive. He became chairman of the company in 1989 when Green left to run Vivra Inc., a sister company in San Francisco.

Richard Conte, 38, served as general counsel of CPC from 1980 to 1990; vice president from 1981 to 1985; executive vice president from 1985 to 1989, and chief financial officer from 1989 to 1991. He succeeded his father as president in 1990.

Both Contes were in San Diego and unavailable for comment, Hovdey said.