Sunday, July 14, 2024

Regional Report Charlotte April 2010


It’s not whom you know — but what they can tell you 

With prominence comes privilege, often in the guise of access to powerful people. But as one branch of Charlotte’s prestigious Harris clan discovered, rubbing shoulders with fellow power players doesn’t get you the kind of counsel you think you deserve — sometimes only sensible-sounding bad advice that can send a portfolio plummeting.

That’s what Cameron Harris says happened to him. He, wife Dee-Dee and son Gary, longtime Wachovia Corp. shareholders, accuse former CEO Ken Thompson and several other executives of making misleading public — and private — statements about the bank’s health not long before it had to be rescued by regulators and sold on the cheap. Their lawsuit seeks unspecified damages that could reach into the millions.

Harris, grandson of a governor and part of the family that developed much of south Charlotte, says he confided to Thompson on a hunting trip in February 2008 that he was worried about the burgeoning housing crisis and Wachovia’s withering stock price — then about $12. Thompson talked him out of selling, the suit alleges, even though the CEO unloaded some shares that same month, reaping more than $500,000.

The bank’s board booted Thompson that June, but Wachovia continued to struggle until San Francisco-based Wells Fargo & Co. acquired it at the height of the banking crisis. Each Wachovia share fetched less than a fifth of a Wells Fargo share, which meant it was under $6 when the deal closed at year-end. The Harrises owned about 900,000 shares during the period covered by the suit. Many came from Wachovia’s purchase of Cameron M. Harris & Co., an insurance brokerage, in 2002. Harris launched a new brokerage last year.

The suit has some people scratching their heads: What else would Harris expect Thompson to do, give him inside information? For its part, Wachovia contends the family gave up its right to sue in return for the bank stopping collection proceedings in December 2008 after the Harrises fell behind on $12.9 million in debt — part of about $24 million borrowed over the years — and has asked the court to dismiss the case. One thing that had been propping up the loan was the poor-performing Wachovia stock.

The Harrises say the no-sue pact pertained only to the loan. Their attorney, C. Richard Rayburn, says he was assured they weren’t giving up their rights as shareholders. The suit quotes an e-mail from Wachovia lawyer Terri Gardner: “Honest Rick, the Bank would have a most difficult time with any Court in trying to enforce this release in any context other than this loan.”

Siemens generates energy jobs

Charlotte’s largest manufacturing expansion in more than 30 years will bring 825 jobs, a $135 million investment and a big building block for the city’s growing energy sector. Combined with a smaller expansion announced last year, Siemens Energy Inc., part of German industrial giant Siemens AG, will have 1,800 workers in the Queen City within five years, making it Mecklenburg County’s largest manufacturer. The new jobs at its gas-turbine factory will pay an average of $64,000 a year, compared with the county average of $48,776. Some will be taken by transfers from a Siemens plant in Hamilton, Ontario, which will close by the middle of next year. Since late 2007, companies have announced plans for more than 2,000 energy-related jobs in the county.



CHARLOTTE — Legendary hoops star Michael Jordan bought a majority stake in the Charlotte Bobcats National Basketball Association franchise for $275 million. Former majority owner Bob Johnson bought the team in 2003 for $300 million.

MATTHEWS — For the first time, Wal-Mart Stores copped the biggest share of grocery sales in the six-county local market, pushing aside homegrown Harris Teeter. The Bentonville, Ark.-based discount chain had 29.1% of sales during the third quarter of 2009. Harris Teeter fell from first to second, slipping to 26.5% from 29.1% in the same quarter of 2008.

CHARLOTTEGMAC closed two offices, eliminating about 115 call-center and collections jobs as it shifted work to larger offices. The Detroit-based bank now has about 400 employees here.

CHARLOTTE — Developer Crescent Resources filed a plan that would cut its secured debt by two-thirds — leaving $465 million — and allow it to emerge from Chapter 11 bankruptcy by summer. Secured creditors would get all the company’s equity. Crescent is a joint venture of Duke Energy and New York-based Morgan Stanley Real Estate Funds.

STATESVILLEKewaunee Scientific, which makes furniture and equipment for laboratories, will spend $13 million to expand its 380,000-square-foot factory by 32,000 feet by 2015. It plans to add about 100 jobs, giving it about 570 employees.

CHARLOTTE — Federal officials plan to spend more than $100 million here to redesign tracks to accommodate high-speed passenger and freight trains.

ALBEMARLE — Dallas-based Palm Harbour Homes plans to close its local factory this month, idling about 110, and consolidate production elsewhere.

CHARLOTTE — Former Bank of America and Wachovia executives filed with regulators to start Blue Ridge Holdings. It will buy failed banks in the Southeast. Milton Jones, who was president of BofA’s Georgia market, would be CEO.

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