Plan for $48 million 'low vote' stock issue by Sunland-based Cherokee Group stalls.Plan for $48 million 'low vote' stock issue by Sunland-based Cherokee Group stalls A plan to issue up to $48 million worth of nearly voteless stock by debt-ridden Sunland-based apparel manufacturer Cherokee Group has been seriously stalled stall 1 n. 1. A compartment for one domestic animal in a barn or shed. 2. a. A booth, cubicle, or stand used by a vendor, as at a market. b. , either on its own merits or due to the Iraqi crisis. Cherokee, a $169.4 million-in-sales maker of popular young women's clothing, in June filed papers with the Securities and Exchange Commission to issue the stock, in a deal to be underwritten by brokerage houses PaineWebber, The First Boston First Boston Corporation was a New York-based investment bank, founded in 1932 and acquired by Credit Suisse in 1988, when it became 'CS First Boston'. Globally referred to as Credit Suisse First Boston after 1996, the First Boston part of the name was phased out in 2006. Corp., and Donaldson, Lufkin & Jenrette. The offering was ill-received from the start in the investment community, with the Standard & Poor's investment advisory house giving the proposed stock a thumb's down in July. S&P told investors that Cherokee's large debt burden and the jumpy garment trade were a combination to risky for investment. Cherokee, which manufactures more than 90 percent of its product in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. -- and much of that in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. -- was founded in 1973 by James P. Argyropoulos, former chairman and chief executive. The company first issued stock in 1983, and was financially successful. In 1988, after a bitter fight, Argyropoulos left Cherokee and the company was taken private by Jeffrey Deutschman, 33, a Westside merchant banker then associated with Drexel Burnham Lambert Drexel Burnham Lambert was a major Wall Street investment banking firm, which first rose to prominence and then was driven into bankruptcy in the 1980s by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken. , the now-bankrupt investment banking firm. Company officials Robert Margolis, chief executive, Cary Cooper Cary Cooper CBE is an American psychologist and Professor of Organisational Psychology and Health at Lancaster University Management School. Prior to working at Lancaster University, Cooper was Head of the Manchester School of Management (UMIST) from the early 80s, In 1995 , chief financial officer, and Jay Kester, president of apparel, participated in the buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. . Drexel underwrote $164.2 million worth of junk debt to finance Deutschman's buyout of Cherokee, and Drexel investment partnerships took a majority stake of Cherokee's privately held stock. The new stock Cherokee proposed to offer had only one-tenth of a vote each, and would have been called Cherokee "class B" stock, meaning new shareholders would have contributed equity but no say-so to the company. |
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