Page 2b/The Battalion/Friday, September 6,1985
Estate pays last $25 million payment
Texas gets more Hughes millions
Associated Press
AUSTIN — The state, ending
its eight-year legal fight over the
fortune of reclusive billionaire
Howard Hughes, has received a
second $25 million tax payment
from the Hughes estate, officials
said Wednesday.
Attorney General Jim Mattox
said the money, which has been
deposited in the state Treasury,
was the last half of a $50 million
settlement reached with the
Hughes estate and the state of
California last year.
“This wraps up a complicated
case that lasted eight years, with
the state of Texas definitely get
ting its money’s worth,” Mattox
said.
When the settlement was
reached in 1984, Mattox called it
probably “the most publicized
and complicated probate case in
this country’s history.”
The legal battle began on April
5, 1976, when Hughes died
aboard a private jet flying from
Acapulco to Houston, where the
billionaire was to receive medical
treatment.
After his death, Texas and Cal
ifornia each pursued inheritance
tax claims on the massive Hughes
estate. The case had been before
the U.S. Supreme Court three
times.
Hughes left no verified will.
More than 40 purported wills and
hundreds pf prospective heirs
surfaced over the years. A series
of trials in 1981 trimmed the
numbdf of heirs to 22.
Hughes, the son of the inven
tor of the oil drill bit, was born in
Texas and lived in the state for 20
years.
But he also lived in Los An
geles and San Diego counties in
California for about 41 years.
Claiming to still be a Texan dur
ing that time, he stayed in rented
or borrowed homes and said he
was visiting California on busi
ness.
In 1966, Hughes moved to a
Las Vegas hotel from which be
began acquiring hotels and land
in Nevada. He later moved to the
Bahamas, Nicaragua, Canada
and London, secluding himself in
posh hotel suites.
The state of Texas, arguing
Hughes was a Texan, claimed an
18 percent inheritance tax. Cali
fornia, contending Hughes was a
resident of that state, wanted to
impose its inheritance tax that
was in effect in 1976.
In the settlement agreement
reached last year, Texas got $50
million cash in two payments and
California got between $119 mil
lion and $150 million in cash and
land. The federal government
also claimed more than $100 mil
lion.
Mattox said Wednesday that
the deal was the best Texas could
have hoped for had the case fi
nally gone to trial.
“We could only have shown
that Howard Hughes was in
Texas 48 hours after he was 19
years old,” the attorney general
said. “But I guess that just goes to
prove the old adage, ‘Once a
Texan always a Texan.”’
Houston broker sues
Forbes in libel lawsuit
Associated Press
HOUSTON — A Houston invest
ments broker filed a $25 million libel
lawsuit against Forbes magazine, al
leging one of the publication’s arti
cles injured him professionally.
Robert S. Montague, a director of
Weaver Exploration Co., filed the
suit Tuesday in federal court in
Houston.
The suit claims a June 4, 1984
Forbes article titled “Drilling for
Suckers” was “meant to inform the
readers of Forbes that Montague
and the Weaver Exploration Co.
were looking for ‘suckers’ and that
their present and potential future
investors were ‘suckers.’ ”
The magazine article said Chrys
ler Corp. chairman Lee lacocca and
other prominent businessmen lost
money through investments in
Weaver drilling ventures and wen
embarrassed by the losses,
Montague said he “enjoyed tit
highest reputation for personal ami
profesional honesty and integrity 1
and was hurt prof essionally by lb
article.
Forbes’ Assistant Promotions Di
rector Valerie Sylvester, who wt
taking all inquiries on the suit, m
unavailable for immediate comim
Wednesday.
Montague’s suit also named as4
fendants the Detroit Free Prts
which republished the Forbes ami
and New York reporter Allan Sloa:
who wrote the magazine story.
- Houston attorney Fred Hagaa
who represents Montague and oti
ers connected with Weaver Exploit
tion, have been named as dt
fendants in securities fraud lawn®
filed in Detroit.
Chairman of Datapoint offers to make company private
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Associated Press
SAN ANTONIO — Datapoint
Corp. Chairman Asher Edelman,
less than six months after obtaining
controlling stock interest in the com
puter manufacturing firm, has of
fered to take the company private
with a $100 million leveraged
buyout.
Meanwhile, Datapoint’s service
subsidiary Intelogic Trace, Inc. an
nounced its board had rejected a
$177 million buyout proposal from
TRW Inc.
TRW offered $9.50 per share for
18.5 million shares of IT stock in
August, one week after IT began
regular trading on the New York
Stock Exchange.
IT is a spin-off firm created after
Edelman became chairman of the
Datapoint board in March.
IT also announced that negotia
tions for acquisition of the computer
service division of Mohawk Data Sci
ences Corp. had been terminated.
Edelman is chairman of the board
of IT and MDS as well as Datapoint.
In announcing the leveraged
buyout proposal for Datapoint, the
corporation said Edelman proposed
merging the company with a cor
poration yet to be organized.
“Edelman and certain of his affil
iates, together with Charles Steven
son Jr., a director of Datapoint, and
certain other members of the board
and management would be equity
participants in the buyout group,” a
company news release said.
In response, Datapoint’s board
voted to retain some independent
investment bankers to review the
buyout proposal.
The company release said Edel
man had retained Salomon Brothers
Inc to assist in arranging financing
for the buyout group.
Such a leveraged buyout would
have to be approved by the stock
holders, who do not have a regularly
scheduled meeting until November.
Edelman said when he purchased
controlling stock in the corporation
in March it was possible he might
take the firm private after returning
it to profitability.
Datapoint announced a $28 mil
lion loss in the third quarter of this
year. An earnings statement for the
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fourth quarter, which ended inln
July, has not been released.
Concerning TRW's takeoveroll
of IT, Edelman said in a prepan
statement the buyout proposal
“highly conditional.”
Edelman said IT’s invest®:
bankers Salomon Brothen ad™
the board the TRW proposal wan
adequate from a financial
point.
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© 1985 AT&T Communications