Panic Protege Jerney Seems to Emulate Boss in Motel Deal

For years, Hungarian immigrant Adam Jerney has been under the tutelage of his mentor, Milan Panic, who gave up his position as head of ICN Pharmaceuticals Inc. earlier this month to become prime minister of his native Yugoslavia.

Now it appears that Jerney, 49, one of two top candidates considered to succeed Panic as head of the $1.1-billion drug conglomerate, may have followed in Panic’s rather large footsteps too closely. A month after Panic stopped making payments on a San Diego motel he bought seven years ago, Jerney took a similar action. In Jerney’s case, it was a Rodeway Inn in Anaheim, court documents show.

The two cases are unrelated, and there is no indication that Jerney took advice from Panic on his decision to stop making payments in early 1991 to Western Federal Savings in Marina del Rey and to the holder of three subordinate trust deeds.

“It is all serendipity,” said Jerney’s Los Angeles attorney, John Cohn. “It has absolutely no relationship whatsoever.”

Nevertheless, Jerney, president and chief operating officer for SPI Pharmaceuticals Inc., ICN’s chief subsidiary, is mired in two lawsuits that were filed after he stopped making mortgage payments on the Beach Boulevard property in January, 1991.

Jerney was out of the country attending Panic’s inauguration this week. Other officials at ICN’s Coast Mesa headquarters would not comment Thursday, referring all questions to Cohn.

Western Federal Savings in Long Beach has filed suit against Jerney, hoping to garner a deficiency judgment against the drug-company executive on a $2.1-million first trust deed, court documents show. That loan, with accrued interest and penalties, has now grown to $2.5 million.

In response, Jerney has filed a countersuit against Western Federal and Beverly Jackson, the Anaheim mortgage broker who sold the 56-unit motel to Jerney in April, 1988. He alleges that the thrift broke its promise to refinance the loan after it came due in December, 1990, Cohn said.

Jerney’s trial is set to begin Sept. 14 in Orange County Superior Court.

Jerney has also filed a separate lawsuit against Jackson, alleging that she sold him the property fraudulently by telling him it was more of a moneymaker than it really was, Cohn said. Jackson’s trial in that case is set for Oct. 14, also in Orange County Superior Court.

Jerney’s contentions are similar to those of Panic, founder and former chairman of the board of ICN Pharmaceuticals and its three subsidiaries, and the highest-paid executive in Orange County.

Panic is being sued by the Resolution Trust Corp. in U.S. District Court in San Diego over failure to make payments on a 233-room Budget Motel he bought in San Diego. He defaulted on an $8.4-million loan he assumed when he purchased the Mission Valley motel in December, 1985. Alleging that he was “fraudulently induced” to assume an overvalued loan, Panic stopped making payments in November, 1990.

Panic’s loan was acquired by the RTC in May, 1991, when the federal agency seized the lender, Progressive Savings Bank in Alhambra.

His attorney has said that Panic has been trying to work out an agreement.

Like Panic, Jerney says he was duped into buying a motel that was grossly overpriced. He also alleges that the Marina del Rey thrift reneged on a deal to refinance the first trust deed he assumed from Jackson when it came due in January, 1991.

When he failed to have the loan rewritten, Jerney’s payments were not accepted by Western Federal Savings, Cohn said. Western Federal Savings officials did not return phone calls on Thursday.

Meanwhile, Jerney, who took out three trust deeds worth a total of $880,000 to Jackson, stopped making payments to her. She eventually foreclosed on the fourth trust deed but has not collected any money from Jerney in the 19 months since he halted the payments, which were $7,000 a month.

Jackson, who owns a small mortgage brokerage in Anaheim, said she met Jerney after he saw a newspaper ad for the motel in April, 1988. They eventually settled on a $3.4-million price for the building, which is in a row of motels between Disneyland and Knotts Berry Farm.

After negotiating to assume a $2.1-million first mortgage with Western Federal, Jerney signed three notes to Jackson. All four loans were due January, 1991, she said.

“I knew he was wealthy and could take care of the payments,” Jackson said.

Cohn said that Jerney had attempted to refinance the loan but was unable to do so. The reason, Cohn said, was that Western Federal Savings was trying to “dump” the unprofitable loan.

Jerney later alleged that Jackson defrauded him at the time of sale by promising him motel revenue that was “substantially different between what she represented and what it actually brought in.”

“She misrepresented the revenue-producing value of the motel,” Cohn said.

Jackson said that Jerney, who was paid a salary of more than $400,000 last year and owns more than $1.5 million worth of SPI Pharmaceuticals stock, is in fact to blame for the financial mess the motel is in because he simply decided to stop paying her.

Jackson, who also holds seminars on how to purchase properties in foreclosure, complained that the deal has caused her mortgage business to lose revenue. She has also paid out more than $60,000 in attorney fees to defend what she describes as an unfounded lawsuit against her.

“I can’t believe him,” she said. “He’s a rich guy, but he can’t pay his bills.”