Judge Stalls Bid to Oust Beleaguered Auto Maker : Courts: Vector board’s firing of Jerry Wiegert is blocked. The firm could face receivership, which some directors say is better than leaving the maverick entrepreneur at the wheel.
A maverick entrepreneur who created the $450,000 Vector “supercar” and is now waging an unorthodox battle to retain control of the company he founded won a reprieve Friday when a Superior Court judge questioned whether the company’s directors had abided by the terms of his contract in firing him last week as president.
The curious case of Gerald A. (Jerry) Wiegert, who earlier this week hired armed guards to turn away the directors and employees of the beleaguered Vector Aeromotive Corp., is expected to be heard again April 6 in Los Angeles Superior Court unless Wiegert and the company’s board find a way to work out differences.
Judge Robert H. O’Brien warned that the court could place the Wilmington-based company in receivership--but directors say that is preferable to allowing Wiegert a continuing role in managing the company.
As O’Brien spoke of placing the company in receivership, one of Vector’s directors sitting in the courtroom whispered a plea of, “Do it, do it.”
That director, John F. Pope, later said it was “a terrible shame” that O’Brien refused Friday to grant a temporary restraining order against Wiegert. To allow Wiegert to preside over the publicly traded company after Vector’s directors had fired him, Pope said, is “to allow the fox to stay in the chicken coop.”
In making his ruling, O’Brien said he was concerned that Wiegert’s employment contract required a 90-day written notification in case of termination. The judge also ruminated as to whether Wiegert--described by his attorney as the company’s “heart and soul”--is entitled to some leeway in trying resolve his differences with the board.
Pope said the delay comes at an awkward time for Vector, which is overdue on federal securities filings required for it to remain listed on the NASDAQ stock exchange. The company’s stock reached a peak of $13 in 1989, but in recent days it has fallen as low as 12 cents per share.
Vector, known for applying aerospace materials and technology to automobiles, has produced 22 Vector W-8s (retail price: $448,000) that have attracted such buyers as a Saudi Arabian prince and tennis star Andre Agassi. Company officers say they still hope to unveil and market a new “supercar” roadster and coupe with prices starting at $225,000.
Directors have received many calls from investors pleased with the decision to oust Wiegert, Pope said. “The only criticism we’ve received is that it took too long,” he said.
The likelihood that Wiegert and the board will iron out their differences appears slim.
“There’s nothing to work out,” Pope said. “Mr. Wiegert has been terminated. The Board of Directors has the absolute right to determine the management of the company.”
In O’Brien’s courtroom, Joseph G. Wick, an attorney representing Pope and other directors, portrayed Wiegert as “a renegade officer” who had defied the guidance of the directors. It was imperative, Wick said, that Vector be regarded just as any other publicly traded company, despite Wiegert’s “emotional stake” as its founder.
“He operates with other people’s money, and he treats it like his own,” Wick said.
Wiegert, a 47-year-old Detroit native considered one of the automotive world’s more colorful dreamers, did not appear in court. In pleading Wiegert’s case, attorney Gary Bostwick emphasized terms in Wiegert’s employment requiring that he be given 90 days written notice if the board intends to terminate him. With Wiegart ineligible to vote, the board on March 22 voted 3 to 0 for his dismissal.
Firing Wiegert, Bostwick suggested, is like the first light-bulb company deciding to fire Thomas Edison. “Mr. Wiegert is in fact the heart and soul of the entire company and always has been. . . . He’s the driving force, the creative force. . . . He is the company in so many different ways,” the attorney declared.
The board’s lawyer, in turn, spun that argument around. “His very rhetoric signifies that Mr. Wiegert considers the company his private reserve,” Wick said.
In press releases and interviews, Wiegert has portrayed his actions in changing the locks to Vector’s headquarters, hiring security guards and putatively firing employees as a stand against “a hostile takeover” by Indonesian investors. Directors say Wiegert took these actions after they offered him a “graceful” means of resigning.
Vector director George Fencl, who described Wiegert as “an old friend,” disputed Wiegert’s interpretation. It was Wiegert himself, Fencl said, who early last year persuaded Indonesia-based Eagle Holding Co. to acquire 30% of Vector’s stock “at twice the price they could have gotten on the Street.”
A few months later, Wiegert started complaining that the Indonesian interests were trying to take over Vector.
“I don’t think Jerry understands how a public company is run,” Fencl said.
