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About The Battalion. (College Station, Tex.) 1893-current | View Entire Issue (Jan. 27, 1988)
Wednesday, January 21, 1988/The Battalion/Page 3 State and Local ank foresees sa ys iha ,lv enienc e l kep by u' adiin K respei fiitlv, T roni my fito theliaj Mial neijj >ehind loss, discusses eorganization HOUSTON (AP) — Financially ubled First City Bancorporation Texas Inc., saying it expects to st an $852 million fourth-quarter ( loss, said Tuesday ii would submit to , 'f'Bareholdei s a reorganization plan [ 1 d° n| ®at includes sale of non-performing lur tnoodjHsets at its subsidiary banks to a new perturit liey havec he dog In |S ter, aniji I this area one of it her wad ;t hose. (J ■itional bank. ■ Bank of ficials, whose fourth-quar ter prediction would Bring 1987 ■sses to $ 1.1 billion, also announced the formation of a new holding com- lany that will buy all remaining as- Btsand assume all liabilities. I First City, hard-hit by energy and fal estate loan losses, last Septem- r received a nearly $1 billion Hedge from the Federal Deposit In- iduatesn ranee Corp., making it the second- lattaljon fBrg 651 government bailout of a fail- ■igbank. ■ “The fbuith-c|uarter loss, while k«ibstantial, should be considered ip Tie context of the reorganization,” ftid J.A. Elkins Jr., senior chairman If the board. ■ Included in that are loan losses of ■176 million and $23 million in reor- lanization expenses. I According to a 200-page, single- sj :c cd proxy statement being sent to shareholders, bank consultant A. Robert Abboud will head an investor Broup to raise some $500 million as j|tlie primary source of capital in the ■new” First City and will become the ■ompany’s chairman of the board ||nd chief executive officer. First City subsidiary banks, mean while, will spin off $1.79 billion in )ok value of non-performing and itherwise substandard assets to Col- ting Bank, the new national bank. In exchange. First City will get 1970 million in FDIC notes and Ibout $764 million in Collecting IBank notes. “Today is a significant and impor- int benchmark in this whole pro- [eeding,” Abboud said. “This has ieen a very complicated and in fn many respects a frontier endeavor. “It took a massive effort to put this document together. It is an ex citing document, but a long and complex document.” Elkins added, “We’re delighted we’ve gotten this far with it. It gives shareholders the opportunity to re alize and reinstate this company, which everyone has been anxious to do for a long, long time. “Our financial results have been affected by troubles and the highly publicized Texas economy. This is going to enable us to deal with those troubles and put us in a position — an eviable one — once it’s in place.” The reorganization includes the exchange of each 100 shares of com mon stock for one common share of the new holding company, 100 shares of Collecting Bank common stock and the right to buy more secu rities of the new company. The new holding company also will offer to buy existing First City preferred stock at about 1 7.28 per cent of its liquidation value. Abboud said besides the bank it self, also involved in the negotiations- were federal and state regulatory agencies, including the Securities and Exchange Commission, the Comptroller of the Currency, the Federal Reserve and FDIC. “From the very beginning, we wanted to make certain there was full compliance all the time with each and every requirement as we went forward,” Abboud said. W.L. Medford, chief financial of ficer, said the plan, which requires a two-thirds acceptance by sharehold ers scheduled to vote March 4, es sentially is the same one announced in late September. - “The legal form for accomplish ing that transaction has been changed slightly but the basic terms are the same,” he said. One change is that under the old structure, each class of stock had its On with the show Photo by Mike C. Mulvey Members of “Up With People” perform a lively and colorful dance to a Spanish theme. The group of young people travels to different states and countries, performing musical shows. They performed at Texas A&M Tuesday night in Rudder Theatre. Discontinuation of drug for AIDS results in protest DALLAS (AP) — Gay leaders are critizizing Parkland Memorial Hos pital officials for discontinuing use of a drug available to AIDS patients at other institutions. ‘They are preventing patients from getting care,” said William Waybourne, Dallas Gay Alliance president. “And people will be dying because of it.” Physicians at Parkland’s AIDS clinic stopped prescribing aerosol pentamidine isethionate last week because demand for it was over whelming, said Dr. James Luby, the hospital’s chief of infectious disease control. “It was like someone put out a bul letin telling all out AIDS patients to ask for a prescription,” Luby said. of I “It is not a proven mode ot treat ment, and it is too expensive for Parkland to undertake without suffi cient study to prove it is cost-effec tive.” Alliance leaders also asked Dallas County commissioners to declare the county a disaster area and apply for emergency federal funds. About 20 members of the alli ance’s Gay Urban Truth Squad dem onstrated outside the commission ers’ chambers Monday. Protest organizers said that 636 AIDS victims have died in Dallas County, and officials are not spend ing enough money for education about acquired immune deficiency syndrome. The county has set aside $75,000 in AIDS education funds this year. The protesters also said that Park land, the county’s hospital, provides inadequate care for people with AIDS, and complained of long waits for treatment. Pentamidine, which has not been approved by the federal Food and Drug Administration for use as an aerosol, is used to treat pneumocystis pneumonia, the most common malady among AIDS pa tients. Providing the drug through the hospital’s pharmacy would cost nearly $250,000 a year. Famed heart surgeon had stock in tobacco own independent vote. Under the new structure, voting will be com bined. “To us, this is a very democratic thing,” Abboud said. “No class of stock can preempt the right of any other class. All shareholders will have the right to vote and those shareholders who may choose to dis sent, there is a provision which will allow for dissenters’ rights.” Some of the largest holders of preferred stock have been reported unhappy with the reorganization plan. Abboud said Tuesday he could not comment on the possibility those dissenters would go to court to halt the planned shareholders vote. HOUSTON (AP) — Bankruptcy court documents filed on behalf of Dr. Denton Cooley, who is seeking protection from creditors, show that among the famed heart surgeon’s in vestments is stock in three major to bacco companies. In 1985, the American Medical Association’s policy-making House of Delegates called for a ban on all cigarette advertising and promotion and urged a tobacco-free society by the turn of the century. But the AMA held tobacco stock as recently as 1981, when the House of Delegates initially rejected a mo tion to divest but changed its mind to allow the sale of its $1.4 million in stock. Ross Bannister, spokesman for the American Lung Association, said his organization encourages its em ployees and board members to di vest of tobacco-related stocks, al though he said they’re generally considered a good investment. Cooley’s portfolio, called well-bal anced and typical, also shows invest ment in medical, food, communica tions and oil and gas companies. '>>: MNIP 1 sW-W-i „ i \ \e> I V& s ■'Ai\ CAMPUS INTERVIEWS If in your mind's eye -'ye-foas, KSsiTwv ..you see yourself excelling with a company of far vision ...with a world organization that brings into sharp focus the challenges of the 21st century ...then you belong at Amoco. Amoco Oil Company, Texas City Refinery will be recruiting on your campus for summer employment on February 10. We will be interviewing for Chemical, Mechanical and Civil Engineering disciplines. Please contact your Career Placement Office to schedule an interview. Amoco Oil Company Texas City Refinery The Direction of 21st Century Achievement An Equal Opportunity Employer M/F/H/V
