Newsgroups: biz.americast.samples
From: americast-post@AmeriCast.Com
Organization: American Cybercasting
Subject: FOLLOW-THROUGH
Date: Sat, 29 Aug 92 14:53:54 EDT

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FOLLOW-THROUGH

Meltdown at
the Great Salt Lake

NEARLY four years ago FORBES waxed
bullish on Salt Lake City-based Bon-
neville Pacific Corp., an independent
developer of cogeneration and other
alternative power projects (Nov. 28,
1988). In September 1990 Portland
General Corp., an electric utility in
Portland, Ore., agreed to acquire
Bonneville Pacific. By June 1991
Portland General had paid $49 mil-
lion for 46% of Bonneville and had
lent it an additional $26 million.
 Oops. Last December Bonneville
Pacific filed for Chapter 11 bankrupt-
cy protection after Portland General
severed all ties and announced it was
taking a $45 million writedown on its
investment.
 Then came a bombshell that may
explain Portland General's abrupt ac-
tions. In May a bankruptcy examiner
alleged in a report that former Bonne-
ville officers had artificially inflated
the company's assets by selling some
assets to Bonneville subsidiaries and
other related entities. The examiner
charged that the insiders siphoned off
millions of dollars for themselves by
booking the transactions through off-
shore companies. According to the
report, the beneficiaries included for-
mer Bonneville chairman Raymond
Hixson; John Dunlop, a former trans-
portation commissioner for the state
of Utah; and Deedee Corradini, the
current mayor of Salt Lake City and
one of Bonneville's original princi-
pals. All have denied any wrongdoing.
 Meanwhile, as the FBI and Securi-
ties & Exchange Commission investi-
gate the examiner's allegations, a de-
cision is expected within six months
on whether to convert Bonneville's
Chapter 11 reorganization to a Chap-
ter 7 liquidation. Not that there's
much to liquidate: Apart from possi-
ble proceeds from contingent litiga-
tion, Bonneville has assets valued at
$20 million, net of secured claims. An
attorney for the bankruptcy trustee
says ''legitimate'' unsecured claims
against Bonneville are in the $100
million to $200 million range.

ESOP alert
In July Charter Medical Corp., the
nation's largest psychiatric hospital
chain, emerged from a bankruptcy
brought on by a leveraged buyout
engineered by its chief executive offi-
cer and founder, William Fickling.
And guess who was still running the
company. Yep. Fickling.
 Though Fickling is a survivor, his
troubles aren't over. Earlier this year
FORBES reported that the Department
of Labor was investigating whether in
1990 Fickling sold 13% of Charter to
the company's employee stock option
plan (ESOP) at an inflated price (May
25). Now, in a suit filed in late July,
the Labor Department is seeking the
return of the $80 million that Fickling
and his family received for their shares
in the 1990 stock sale. The ESOP
already received a $12 million settle-
ment from Charter in April in a case
arising from the 1988 LBO.
 Labor waited to file the lawsuit
until after Charter emerged from
bankruptcy so as not to disrupt the
reorganization. The government em-
phasized that its investigation was
directed only at Fickling and the ESOP
trustee, and not at the company itself.
 Fickling's attorney, William Kil-
berg, of Gibson Dunn & Crutcher,
says his client is accused only of bene-
fiting from poor oversight by the ESOP
trustee.
 Charter's old creditors received
93% of the stock in the reorganized
company. Will they continue to let
Fickling survive

Where are the cops?
Harry Schreiber could sell the
Brooklyn Bridge to Japanese investors.
When first seen in FORBES (June 13,
1988), this ex-convict had been run-
ning a Ponzi scheme, using real estate
tax shelters. He raised around $54
million through the sale of limited
partnership interests and pocketed
more than $7 million, even though
many of the deals went bust. Last
November a federal judge ordered
Schreiber to disgorge $4.7 million to
his victims. He still hasn't paid up.
 Nor has he stopped swindling peo-
ple. Schreiber's newest scam: dry
cleaning. A Schreiber company called
The Dry Cleaner, based in Coral
Springs, Fla., promised investors they
could be running their own dry clean-
ing business within weeks. Total cost:
typically $85,000, with up to
$25,000 down. In many cases, how-
ever, the promised equipment was
paid for but never delivered. In other
instances, if investors defaulted on
payments owed to leasing companies
that had financed equipment pur-
chases, Schreiber reclaimed the
equipment and re-leased it himself
Thus, investors and the leasing com-
panies both got stiffed.
 In April The Dry Cleaner filed for
bankruptcy protection. According to
the bankruptcy trustee, Donna Bum-
gardner, the value of The Dry
Cleaner's assets is ''probably less than
$50,000,'' while the liabilities will
exceed $3 million. A new Schreiber
company, Dryclean Depot, of Boca
Raton, continues to peddle dry clean-
ing investments.
 Last year, as he was swindling peo-
ple with the dry cleaning racket,
Schreiber got a loan from General
Motors Acceptance Corp. to acquire
Mead Classic Motor Co., a dealership
in Grand Junction, Colo. Last fall
state motor vehicle authorities re-
voked Mead's license after Schreiber
allegedly sold traded-in cars without
paying off the loans due on them.
 In May Schreiber filed for personal
bankruptcy in Denver, listing assets of
$1,588 and liabilities of $49.9 mil-
lion. Schreiber is an old hand at bank-
ruptcy. In the wake of a 1980 bank-
ruptcy filing, he walked away from
over $8 million in unpaid debts.
 Why isn't this man in jail?
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