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.
Peter and Steven Halmos found SafeCard.
SafeCard goes public. In December 1989 it's listed on the NYSE.
Revenues hit $134 million. Earnings jump to $27 million. Peter Halmos steps down as chairman and becomes a consultant.
Did the SafeCard board receive downbeat earnings projections?
Peter Halmos' tenure as a consultant to SafeCard ends.
With no CEO and a two-man board, director Robert Dilenschneider (right) fills the vacuum. He brings Eugene Miller on as a director.
Paul Kahn (left) hired as CEO of SafeCard.
Kahn gets rid of old SafeCard manage-ment team, including Steven Halmos.
Peter Halmos begins attacking management. He runs full-page ad in The Wall Street Journal questioning the condition of SafeCard's business.
Kahn brings in own management and three directors, including Tom Petway, and Jeb Bush in January '95.
Kahn promises 45% revenue growth in the next few years, up from his earlier estimate of 20%.
Dilenschneider gets Museum Art Properties contract from SafeCard.
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.
SafeCard begins marketing Vatican artwork reproductions and launches PGA Tour credit card.
SafeCard starts Family Protection Network.
At annual meeting, management fails to disclose that the new products are falling far short of its expectations. Shareholders approve Ideon Exchange offer.
Company announces that response to PGA Tour card and FPN is ''significantly lower than expected.'' Stock drops 44%.
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.
Halmos begins soliciting CUC International to acquire SafeCard.
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.
SafeCard hires Lazard Frres & Co. to shop the company.
Board ousts Kahn, paying severance of $2.3 million.
CUC announces agreement to buy company for $375 million. Sets up a $125 million reserve to settle Halmos and class-action litigation.
CUC completes purchase of SafeCard.
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