The Palm Beach Post from West Palm Beach, Florida • Page 35

The Palm Beach Post PAGE 5B Busin More business news: Page 11B Court facing a cash crane WEDNESDAY, AUGUST 8, 1990 Hotel's owners file suit, allege fraud $404,000 in additional operating money during the late spring and early summer, BCI sent only $40,000. Then Harrison said no more money would be available from BCI, the suit said. Harrison could not be reached for comment Tuesday. The owners have asked the court to force BCI to account for the money and put it into an escrow account until the suit is settled. Harrison also is said to have defrauded the owners by requiring $192,000 in lease payments be paid to another of his companies for renting his house, located next to the hotel.

The house was not rented by the hotel or its guests. death. It was sold to Harrison and his partner for $7.2 million and underwent a $15 million renovation before reopening in 1986. The Brazilian Court's owners allege that BCI did not keep their money separate from other sources as required. In late 1989, BCI demanded that Horizon take money from the hotel's operations account at Flagler National Bank and put it into a BCI account at Morgan Guaranty Trust in New York City.

Between January and March 1990, the suit said, Horizon deposited $470,000 of the hotel's money into the BCI account. Even though Semadeni repeatedly asked for BCI to provide actor Gary Cooper and former President Richard M. Nixon. But the hotel gained notoriety in April 1984 as the site of the drug-related death of David Kennedy, son of the late Sen. Robert F.

Kennedy. After buying the hotel from Harrison and his partner, the present owners hired Harrison's company to be their agent in 1985. The investors sued the sellers and Sunbelt Savings in 1988, alleging the hotel was overpriced and illegally marketed when it was split into condominiums. The status of those suits could not be determined late Tuesday. The hotel at 301 Australian Ave.

closed shortly after Kennedy's By JANE VICTORIA SMITH Palm Beach Post Staff Writer The Brazilian Court's principal owners say their agent misappropriated $470,000 of the Palm Beach hotel's operating fund and left it without enough money to meet payroll or pay expenses, according to a lawsuit filed Tuesday in Palm Beach County Circuit Court. The owners are asking the court to appoint a receiver to take control of the 134-room hotel, alleging that "fraud, waste and mismanagement" by agent Brazilian Court Innkeeper Inc. of Dallas and its president, Clifton Harrison, are devaluing the hotel. Horizons Hotels which BCI hired to run the hotel, was not named in the suit. The hotel remained open Tuesday night, and general manager David Semadeni refused to comment on the lawsuit or its impact on the hotel's operations.

"We believe we continue to enjoy the trust and confidence of both the staff and customers here at the Brazilian Court," he said. The lawsuit said the value of the hotel is "far below the debt" owed. The majority owners are investors who bought individual rooms as condominium units in 1985. Sunbelt Savings of Dallas, which also holds a $25 million mortgage on the hotel, owns four units. Together, the investors control 75 percent of the rooms.

The 64-year-old hotel, one of Palm Beach's original luxury inns, has sheltered the wealthy and the well-known, including cereal heiress Marjorie Merriweather Post, Ml ortgage rates shoot up amid 'U I rv' i ideast crisis joy FundAmerica 'considering' Chapter 11 Palm Beach Post Staff and Wire Reports FundAmerica is "seriously considering" a Chapter 11 bankruptcy reorganization, the company's new president told investors on a hot line for recorded news updates. Mitchell Blumberg said in Tuesday's message that the possibility of bankruptcy, "coupled with the fact that we have the assurance of additional extremely substantial funding," could enable the company to pay its bills and resume paying sales commissions that have been frozen by a lawsuit against the company. Blumberg took over the president's post Monday from financial adviser Howard Ruff, who said he was fired after one week as head of the Irvine, Calif sales organization. FundAmerica is accused by Florida officials of being an illegal pyramid scheme. Ruff said he was let go because he disclosed last week that Fund-America founder and former president Robert Edwards received $5.6 million in salary and wired more than $11 million to businesses in Hong Kong and the Netherlands.

Florida Comptroller Gerald Lewis on Tuesday warned consumers who might be tempted to invest money with FundAmerica Inc. that company assets may have been raided by Edwards. "We wanted to issue a warning to the public, saying if these guys are back-stroking you and placating you and saying everything's fine, you still have to be careful," said Terence McElroy, a spokesman for Lewis in Tallahassee. "The comptroller basically regards the company as something to be wary of." Florida authorities ordered the company on July 19 to stop conducting what Lewis called an illegal pyramid scheme. Edwards was arrested in Delaware and is free on $1 million bail.

FundAmerica, which has about 100,000 members in eight states, has been conducting business in Florida since April. The company has denied any wrongdoing and is expected to challenge the Florida cease-and-desist order. By CHARLES ELMORE Palm Beach Post Staff Writer The invasion of a tiny desert country on the other side of the world made buying a house in America suddenly more expensive this week. Iraq's invasion of Kuwait jacked up oil prices, which raised inflation fears, making nervous lenders tack extra fees onto mortgages faster than a home buyer could say Saddam Hussein. At NCNB National Bank, for example, the 30-year fixed rate shot up to 10.13 percent Tuesday morning from 9.75 percent Friday.

For someone borrowing $150,000, that represents a difference of more than $41 a month, or close to $15,000 over 30 years. "Unfortunately, home buyers found themselves stuck in the middle of world events," said Sheila Tshinkel, research director for the Federal Reserve Bank in Atlanta. The average 30-year fixed mortgage rate among 67 lenders in Palm Beach and Martin counties dipped last week to 9.96 percent, according to a weekly survey by Bank Rate Monitor of North Palm Beach. It was the first time the region's average dipped into single digits since January. But it now appears the visit below 10 percent may be brief.

People who shopped for a mortgage last week have awakened to rapidly rising rates in the past two days. Rates have jumped as much as a quarter of a percentage point daily. "It's really a shame," said Les Grene, vice president for NCNB in Palm Beach County. "The rise in interest rates isn't really warranted as far as the economy goes. It's because of what's going on." The "Kuwaiti gamble" confronting home buyers is whether to "lock in" a rate this week, figuring rates may keep heading north because of oil-related turmoil, or wait a couple months before closing the sale hoping rates will settle.

'Sticker shock' At Secor Bank, some customers suffered "sticker shock," said loan production manager Doris Jackson. Last week, Secor offered a 9.88 percentage rate. But this week the lender more than doubled the. points add-on fees paid at closing to 2.63 from 1.25, Jackson said. One point equals one-hundredth of the total loan amount.

The lowest rate in last week's area survey of 30-year fixed rates belonged to Goldome Savings at 9.38 percent with 2.25 points. As of Tuesday, Goldome's lowest rate was 9.75 percent with 2.75 points, a West Palm Beach loan officer said. Long-term mortgage rates usually parallel the yields on long-term Treasury bonds, which have climbed nearly half a point since Monday. FILE PHOTO Dixon Ticonderoga plans to shift 80 to 100 employees, including 40 from Vero Beach, to Orlando during the next three months. Dixon Ticonderoga to move from Vero Beach to Orlando Dixon Ticonderoga headquarters To l-S 8 Beachl Safer mfp a Osceola Blvd.

Mem BaiOerl Ml Bridge I By KENNETH BOHANNON Palm Beach Post Staff Writer One day after reporting $1.6 million in losses for the third quarter, pencilmaker Dixon Ticonderoga Co. said Tuesday it will move its Vero Beach headquarters to Orlando to consolidate operations and improve airport access. The company will shift 80 to 100 employees including 40 from the Vero Beach headquarters to Orlando during the next three months as it begins the second phase of its consolidation plan. In the first phase, the company merged and modernized manufacturing plants. "We've offered all of our employees the chance to move to officers will not move until early 1991.

The company's employees in Vero Beach, Sandusky, Ohio, and Shelbyville, were notified Friday of the company's plans, Pala said. Dixon Ticonderoga employs about 1,100 people worldwide. Pala said the headquarters needed to be closer to a major airport because of the company's international connections. "We have manufacturing facilities in Mexico and Canada, and some of our biggest customers are in the Chicago, New York and Cleveland areas." Pala said company officers considered Jacksonville and Please see DIXON 1 IB Miles Market slide slows: Dow loses 5.70 INDIAN RIVER CO. St.

lucie cor ny president. "We're not sure how many of our employees will come. We may have to get part of our work force from Orlando." The move should be completed before the new fiscal year begins in October, but corporate Orlando," said Gino Pala, compa- Staff writer Ken Ibold to this story. Texans hope '80s oil bust goes boom New York Times News Service NEW YORK The stock market continued to react nervously to Mideastern events Tuesday but halted the steep three-day slide precipitated by Iraq's invasion of Kuwait last week. Fears over higher oil prices and inflation were still very much on investors' minds, as the Dow Jones industrial average fluctuated within a 65-point range.

The Dow average ended the day down 5.70 points, to 2,710.64, but the broader Standard Poor's 500 stock index was up 0.40, to 334.83. Volume was 231.58 million shares, with the total number of stocks declining only slightly ahead of those gaining. In the credit markets, an early rally in bond prices evaporated and prices fell sharply in midafternoon. But a rally late in the day halved the losses. The yield on the Treasury Department's benchmark long bonds the 8.75 percent issue maturing in 2020 rose to 8.83 percent from 8.79 percent the day before.

In the stock market, the Dow average opened the trading session up 18.56 points over Monday's close of 2,716.34. The index climbed as much as 34 points during the morning. But the market rally was quickly blunted when CBS reported that President Bush was ordering troops and planes to Saudi Arabia to defend against any attack. "If you have followed what has been happening in the markets since the middle of July, you'll have noticed that many market participants have become event watchers rather than analysts," said Robert H. Stovall, president of StovallTwenty-First Advisers a New York investment management firm.

Texaco was the most widely traded issue Tuesday with 11.4 million shares exchanged. By MIKE WARD Palm Beach Post-Cox News Service BORGER, Texas Longtime oilman Clovis Boren figures the bumper sticker he once saw on a beat-up pickup sums up things best: "Lord give us one more boom. And we won't screw it up." Ever since Iraq invaded Kuwait last week, driving up oil prices, folks in Texas' threadbare oil patch have been waiting with anticipation to see if the good times will return. "The people in our area are so hungry, this could spark something," said Boren, 45, an independent producer who has been in the business since he was 18. jobs, more people with more money to spend in local stores.

"I don't think you're gonna see people getting all teared up over Arabs fighting Arabs. After all, they're the ones that've been putting us through the wringer with their OPEC price fixing," said Mamie Dowd, a 46-year area resident whose family is in the oil business. "But we are concerned about the possibility the United States may have to go to war and about what the higher oil prices could do to the rest of this country." Ever since Thursday, Iraq and oil and Please see OIL TOWN1 1 "Most everybody, including myself, would like to see the price of oil go up. But I don't think anybody really wants to see the world blow up so they can make a couple of bucks." Unlike the rest of the world, Texas stands to profit handsomely from the Iraqi aggression and higher oil prices. For every dollar per gallon that oil prices rise, state coffers alone will see an additional $50 million in revenues, Texas officials say.

Since the Iraqi attack, prices have jumped about $2 a barrel. What that means to Borger, where oil has been king since the first strike in 1926, is simple: More cash for oil means more business, more Markets At A Glance W. Palm median home price rises 12.5 to $108,200, survey shows INDEXES: Dow Jones Industrial Avg. 2,710.64 American Stock Exchange 339.84 Standard Poor's 500 334.83 0.40 NASDAQ Composite 402.08 2.04 Toronto Composite 3,470.00 NYSE: 183.45 0.13 Gainers740 Unchanged: 449 Losers: 845 COMMODITIES (New York Commodity Exchange): Median Home Prices Prices for 2nd quarter of 1 990 Median change Area Price from 1989 Daytona Beach $63,800 5.8 Fort Lauderdale 92.200 13.3 Fort Myers 69,900 5.7 Jacksonville 73.000 7.7 Melbourne 71.300 1.9 Miami 89.000 1.0 Orlando 83,300 5.8 Tampa 70.400 West Palm Beach 1 08.200 12.5 SOURCE: National Association of Realtors 1.50 Silver: $4,857 Gold: TREASURY BILLS. MONEY RATES: By JANE VICTORIA SMITH Palm Beach Post Staff Wnter The price of an existing home continued to climb nationally during the second quarter of 1990 and rose 12.5 percent to $108,200 in greater West Palm Beach, according to a National Association of Realtors survey released Tuesday.

In Florida, the Fort Lauderdale region showed the highest gain in the median price of a home sold: a 13.3 percent increase, to $92,200, from the second quarter of 1989. But most other regions of Florida, including Miami, showed only single-digit percentage-point increases. The Florida slowdown is an adjustment that follows strong price increases, said John A. Tucillo, NARs chief economist But, he said, markets in the state still have high growth potential. Nationally, the median home price for the second quarter was $96,200, up 3 4 percent from 1989, the Realtors survey said.

Honolulu registered the highest home median sales price at $345,000. The real estate group surveyed existing home sales in 98 metropolitan statistical areas. The West Palm Beach statistical area covers Palm Beach County. A median price is the midpoint at which half the homes sell for more and half sell for less. While home prices increased nationally in many areas during the second quarter, fewer regions registered an increase in the number of sales.

Nationwide, existing home sales fell 0.5 percent in the second quarter compared to the same period of 1989, the Realtors said Tuesday. Sales dropped 2.7 percent from the first quarter to the second this year. In the second quarter, 24 states and the District of Fed Funds: 8 Prime: 1 0 3 86 FOREIGN EXCHANGE (Quotations eoual S. $11- .5328 1.1493 150.35 .20 1.5830 .0050 British Pound: Canadian Dollar: Japanese Yen: W. German Deutschemark: Columbia reported higher levels of existing home sales, including a I 2 pet cent increase in Florida and a 33 9 percent rise in Idaho..