Blum-Led Investment Group, Cement Company End Dispute
An investment group led by U.S. Sen. Dianne Feinstein’s husband, a local carpenters union and Los Angeles’ top subway contractor has settled its brief but fierce battle with a Texas cement company.
In a joint announcement, the president of Houston-based Southdown Inc. and Feinstein’s husband, Richard C. Blum, said “an amicable constructive resolution had been achieved.”
Blum had criticized Southdown’s executives--including compensation paid to Board Chairman G. Walter Loewenbaum II--and launched a proxy fight to oust him and two other members of the board of directors.
Earlier, on April 1, Southdown sued Blum and the investors he represents--subway builder Ronald N. Tutor and the Carpenters Pension Trust for Southern California.
As part of the settlement, Southdown agreed to withdraw the federal court lawsuit, which accused Blum, Tutor and the carpenters’ union of securities fraud for not disclosing their intention to take over the company. Tutor and representatives for Blum and the union termed the lawsuit groundless.
The union pension fund has purchased about $40 million of Southdown’s stock since 1991. Because the stock price has tumbled, the pension fund’s shares are now worth about $25 million. Tutor, whose company, Tutor-Saliba Corp., is the largest subway contractor, is also co-chairman of the pension trust.
The settlement leaves Southdown’s existing management intact, but the company’s board will be expanded from nine to 12 members. Tutor, who has served on Southdown’s board since last July, will remain and be joined by two other executives promoted by the Blum group.
Southdown’s quarry and ready-mix operations in Southern California have supplied virtually all of the concrete products used for the downtown subway.
“We are pleased to have entered into an agreement that serves the interests of all shareholders by ending a distracting fight and enabling management to focus on positioning the company for a return to profitability as the economy rebounds,” said Clarence C. Comer, Southdown’s president.
