Wall Street can be a vengeful mistress. Take a look at Wayne Snavely, past chairman and chief executive of Torrance-based Imperial Credit Industries Inc., a diversified business lender. He resigned Aug. 2, after his initial successes running Imperial Credit devolved into a string of losses. Only a few seasons ago, Snavely was the toast of local financial circles. A former Marine and vintner, the affable Snavely was confident to the end, many times vowing to right the ship at financially struggling Imperial Credit indeed, even heartily demanding that reporters who chronicled bad quarters to remember to call him when times were good again. But good times never came again.

Instead, losses just kept piling up at Imperial Credit over the past two years, including huge loan write-downs in the second quarter ended June 30, due to sour telecom debts and one large tech loan that went south due to “possible fraud (by the borrower),” the company said.

Previously, Imperial Credit had blamed loan problems on ill-considered decisions to enter dicier parts of the consumer-lending business in the mid-1990s, such as sub-prime auto loans. By 2000, Imperial Credit had backed out of consumer markets to go back to its core lending business, but by then, regular business IOUs started souring, too.

Shareholders got a roller coaster ride from Snavely, and are right back where they started. When Snavely took over Imperial Credit as chairman and chief executive in 1991, the stock traded in the $2-a-share range. Snavely turned the company into a mini-conglomerate, entering everything usually by acquisition from investment banking (through subsidiary Imperial Capital) to consumer auto loans to film finance to financing buyouts of fast-food joints by franchisees.

For a while the hodgepodge of lending was tremendously successful, and under Snavely the stock jumped to $24 by 1997, a 12-fold increase in six years. But much of what had been acquired contained land mines (in the form of bad debt), and writedowns became a quarterly fact of life.

In that regard, Imperial Credit was similar to many other industry roll-ups, in which the acquiring company, on something of a rampage, ends buying a few bombs that gut earnings from within. As a result, by last week Imperial Credit traded in the 80-to-90-cents-a-share range, down 97 percent from its all-time high.

There is no analyst coverage on Imperial Credit, but company officials are putting up a brave face.

The new chief executive is board member Michael McGuire, a 33-year industry veteran and former chief executive of Affinity Bank in Ventura. In a prepared statement, McGuire said, “I am confident the talented and highly experienced operating team … will quickly address the remaining operational and regulatory issues and add value across all of our core business lines.” McGuire was out of town last week, and unavailable for comment. Paul Lasiter, company controller for the last 11 years, last week said the lender has submitted a new capital plan for its main subsidiary, Southern Pacific Bank, to banking authorities, and anticipates approval.

Recently, Imperial Credit traded outstanding bonds for new stock in the company, diluting existing shareholders but wiping out much debt.

Yeast Matters

Behind the scenes of the recent sale of La Brea Bakery to Ireland-based IAWS Group was Scott Adelman, managing director at Century City-based Houlihan Lokey Howard & Zukin and 15-year veteran of the firm. Adelman not only advised La Brea on the $68.5 million deal and found the buyer, but has been consulting with La Brea for several years, helping the company grow, raise capital and prep for the sale to the big leagues.

“This is one of the fairy tales of investment banking,” said Adelman last week. “This is the way you want them all to work out. When we got involved with this company five years ago, it was an emerging growth company, but sold its product purely locally, and had outgrown the restaurant with which it was affiliated.”

First, HLHZ helped raise capital and find new investors to push La Brea Bakery as a stand alone bakery operation, and then solicited a larger player to take La Brea national. The sale price was very rich, hinted Adelman. “I will confirm that we got double-digit times EBITDA,” he said, referring to earnings before interest, taxes, depreciation and amortization.

Due to the reluctance of banks to finance corporate purchases, and the soft economy, most businesses today sell for between five and eight times EBITDA.

But Adelman also credited La Brea’s unique product. “There are very few, premium, branded baked-goods companies in America,” said Adelman. “This is one, and we had it for sale.”

Quick Takes

Pacific Palisades-based Acorn Technologies Inc. has acquired Intellectual Capital Management Group Inc., a Palo Alto-based consulting group that specializes in intellectual property. Under the terms of the transaction, ICMG will become a wholly-owned subsidiary of Acorn and will retain its Bay Area headquarters. In a statement last week, Acorn said that the acquisition would benefit the company by giving it access to the relationships forged by ICMG. Acorn’s business model is to invest in and assist companies, academic and research institutions and individuals in developing and commercializing their technology. They gain revenue by sharing in the fees generated from licensing deals, usually on a 50/50 split with the inventor.

NetZero Inc., the Westlake Village-based provider of free Internet service, will give away only 10 free hours a month and start running the meter thereafter. NetZero stock threatens to be true to its name; it traded last week in the 66-cents-a-share range, off from an all-time high near $37. It is the latest confirmation that advertising-supported Web services are a tough business. …

Rep. Jane Harman, D-Redondo Beach, has co-sponsored legislation that would grant tax relief to those who exercised but never sold stock options, which then plummeted in the 2000 tanking on Wall Street. Under current law, taxpayers are nicked for the value of the options when exercised, not the long-term capital gains or losses.

Contributing columnist Benjamin Mark Cole writes about the local investment community for the Los Angeles Business Journal. His new book is “The Pied Pipers of Wall Street: How Analysts Sell You Down the River,” published by Bloomberg Press. He can be reached at [email protected].