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The Rise and Fall of a Company

The story of SafeCard demonstrates how directors and managers with the best of credentials, and their equally blue-chip advisers, can't always be counted on to look out for shareholders.

JUNE 1969
Peter and Steven Halmos found SafeCard.

NOVEMBER 1977
SafeCard goes public. In December 1989 it's listed on the NYSE.

1990
Revenues hit $134 million. Earnings jump to $27 million. Peter Halmos steps down as chairman and becomes a consultant.

OCTOBER 1992
Did the SafeCard board receive downbeat earnings projections?

DECEMBER 1992
Peter Halmos' tenure as a consultant to SafeCard ends.

JANUARY-DECEMBER 1993
With no CEO and a two-man board, director Robert Dilenschneider (right) fills the vacuum. He brings Eugene Miller on as a director.

DECEMBER 1993
Paul Kahn (left) hired as CEO of SafeCard.

APRIL-JUNE 1994
Kahn gets rid of old SafeCard manage-ment team, including Steven Halmos.

MAY 1994
Peter Halmos begins attacking management. He runs full-page ad in The Wall Street Journal questioning the condition of SafeCard's business.

APRIL-DECEMBER 1994
Kahn brings in own management and three directors, including Tom Petway, and Jeb Bush in January '95.

SEPTEMBER 1994
Kahn promises 45% revenue growth in the next few years, up from his earlier estimate of 20%.

NOVEMBER 1994
Dilenschneider gets Museum Art Properties contract from SafeCard.

DECEMBER 1994
SafeCard changes to a calendar year, creating a stub period in which it would later write off $65 million pretax and some $45 million aftertax.

MARCH 1995
SafeCard begins marketing Vatican artwork reproductions and launches PGA Tour credit card.

APRIL 1995
SafeCard starts Family Protection Network.

APRIL 1995
At annual meeting, management fails to disclose that the new products are falling far short of its expectations. Shareholders approve Ideon Exchange offer.

MAY 1995
Company announces that response to PGA Tour card and FPN is ''significantly lower than expected.'' Stock drops 44%.

JULY 1995
Company announces it is discontinuing FPN and scaling back PGA Tour card. Dilenschneider and Miller form board committee that takes over management control of the company.

SEPTEMBER 1995
Halmos begins soliciting CUC International to acquire SafeCard.

DECEMBER 1995
SafeCard posts a $4.7 million profit for fourth quarter ended Dec. 31, 1995, by reversing some second-and third-quarter write-offs, alleges shareholder suit.

JANUARY 1996
SafeCard hires Lazard Frres & Co. to shop the company.

FEBRUARY 1996
Board ousts Kahn, paying severance of $2.3 million.

MARCH 1996
CUC announces agreement to buy company for $375 million. Sets up a $125 million reserve to settle Halmos and class-action litigation.

AUGUST 1996
CUC completes purchase of SafeCard.


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Updated June 15, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.
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