Unfair Depiction of Ocean Pacific
On June 29, a “Q & A” feature ran in the Business section highlighting Edward H. Stone, an estate lawyer. An alleged situation with Ocean Pacific is used throughout the article as an example. As counsel to Ocean Pacific, I would like to clear up various discrepancies in the article.
The article presents Mr. Stone as an expert in buy-sell agreements. The questions and answers imply that minority owners of businesses can best protect themselves with mandatory buy-sell agreements; that Elaine Ornitz, widow of former Ocean Pacific CEO Larry Ornitz, was left unprotected at his death because of no such agreement; and that Mr. Ornitz’s attorney should have advised him to get a buy-sell agreement when he bought a 30% interest in OP. The article describes Mr. Stone as “a former tax adviser to Elaine Ornitz” and states that Mr. Stone has been “involved (with OP) as tax counselor” and that bad management led OP into insolvency. The negative implications about OP are straight out of a lawsuit filed by Mrs. Ornitz against OP.
What the article does not say is that Mr. Stone is Mrs. Ornitz’s current tax adviser (having written OP on her behalf as recently as June 23) and that Mr. Stone has never represented OP or been counsel to OP in any matter.
I am currently counsel to Ocean Pacific and was counsel to Mr. Ornitz when he bought his interest in OP. Mr. Ornitz and his partners in Ocean Pacific thoroughly discussed buy-sell agreements. They consciously decided not to have a mandatory buy-sell agreement because they did not want to fund that agreement. They thought it too expensive based on the value of the company. This was a judgment made by Mr. Ornitz and his partners after receiving all available facts presented by their attorneys.
Finally, your article states that when Mr. Ornitz died, “Elaine Ornitz was unable to touch his 30% stake. The result was a bitter dispute between OP’s other partners and Ornitz. . . .” When Mr. Ornitz died, Mrs. Ornitz became OP’s single largest owner. The other partners elected her to the board of directors of OP’s general partner. She has attended the numerous partnership meetings and board meetings since her husband’s death. She has been represented by counsel at most of those meetings. She has voted on all significant actions by the partnership, sometimes with the majority and sometimes against it. To say she was unable to “touch” her stake belies the facts.
MICHAEL G. BALMAGES, Senior executive vice president and general counsel, Ocean Pacific Sunwear
Editor’s note: The reference to Edward Stone as tax counselor to OP was an editing error, not Stone’s representation.
