OTHER NEWS - Oct. 15, 1992

Ames Sues Investment Bank Over Advice: Ames Department Stores Inc. filed a $375-million lawsuit against investment bank Wertheim Schroder & Co. for offering alleged faulty advice in a takeover that eventually forced Ames into bankruptcy. Wertheim was the investment banker for Ames in the $788-million takeover of Zayre Corp. in 1988, which gave the company 392 stores in New England but also saddled it with huge debts. When the region’s economy slumped in 1990, Connecticut-based Ames faced mounting losses and was forced into bankruptcy. It closed 221 stores and laid off 18,000 workers. The suit charged Wertheim was at fault, since it secretly advised Zayre on the value of its properties and came up with a price far less than it advised Ames to pay.