L.A. Investor Wins Pact for Control of Todd Shipyards

A group led by Los Angeles-based investor Burton Borman has succeeded in a proxy battle to take over Seattle-based Todd Shipyards, which two years ago closed its San Pedro shipbuilding facility.

Todd and Borman announced that they had agreed on a slate of nominees for a board scheduled to be elected at a special shareholders’ meeting Sept. 16. Under the agreement, Borman is expected to replace David Wallace as chairman and assume the duties of chief executive from Hans Schaefer. However, Schaefer will remain as president and assume the responsibilities of chief operating officer.

Of the proposed board of nine, six are from the Borman side, including retired Adm. Elmo R. Zumwalt Jr., former chief of naval operations. Most of Todd’s senior executives and directors have announced that they intend to step down.

Earlier this month, the investment group headed by Borman and Hugh Maguire announced that they had acquired 5.1% of Todd’s shares and would run a number of candidates for the board.

Officials at Todd had no comment on the proposed board nor on future plans for the company. Stan Kay, a spokesman for Borman, declined to comment.

Todd emerged from Chapter 11 bankruptcy protection last December after industrywide difficulties in the shipbuilding and ship repair industry. With 85% of its work in military ships, Todd fared well during the naval buildup of the early 1980s, but faltered once government spending slowed.

Todd closed its 6,000-employee San Pedro facility in July, 1989, and its Galveston, Tex., yard in August, 1990.

Annual losses peaked at $84.8 million in 1989. After its filing for Chapter 11 bankruptcy in 1990, it showed a $5.2-million profit on revenue of $37.85 million for the fourth quarter of 1990.

Bio: Burton Borman

After a long career in the insurance industry, Borman is entering the shipbuilding business as a private investor as he prepares to become chairman of troubled Todd Shipyards of Seattle.

Age: 63

Born: Chicago

Education: Borman holds a BS from Ohio State and attended the Wharton Graduate School of Business.

Resume: Borman was president of PennCorp Financial Inc. from 1958 to 1986 and was concurrently president of Pennsylvania Life Insurance Co. and chairman of of Massachusetts Indemnity & Life Insurance Co. He has held senior positions in other insurance and finance firms.