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There's been a change in control at Merisel Inc., the $3.5 billion-in-sales El Segundo-based computer hardware wholesale distributor, and Russ Belinsky of Chanin & Co., the Westside boutique investment banker, is in the background of events.

Belinsky represented an unofficial bondholders' committee, which has pretty much taken over at Merisel. The $125 million (face value) of corporate IOUs will be exchanged for an 80 percent equity stake in Merisel, and a controlling number of seats on the board, Belinsky confirmed last week.

It might be surprising that a giant like Merisel couldn't come up with $125 million, or even the annual interest thereupon, and thus fell to its knees before bondholders.

But the company had lost $140.4 million on revenues of $5.5 billion in 1996. Revenues this year are being projected in the $3.5 billion range, with the expected drop-off being due primarily to divestitures.

"Distributors work on very skinny margins," said Belinsky, in explaining how such a large enterprise has not been able to honor relatively minor debts. "You're looking at a penny or less on a dollar of sales."

Merisel's bonds had traded down as low as 60 cents per dollar of face value last year a classic junk bond of the fallen-angel variety and that's when "distressed situation" investors, sometimes called "vulture funds," began accumulating bonds. Belinsky used to work at Drexel Burnham Lambert Inc., the now-defunct brokerage, so he knows all about junk bonds and distressed situations.

Merisel, in an ill-fated move, had originally issued the bonds to help finance an acquisition of a computer retailing chain, Pleasanton, Calif.-based ComputerLand Inc. The plan was to gain a captive market for Merisel products, but making money at retailing was harder in reality than on paper. The venture was an expensive bust.

Belinsky was zip-lipped about the identity of the vultures, and said the new board members have not been selected.

According to a Merisel spokeswoman, the new board will be mutually agreed upon by the bondholders and present management.

Dispute settled

Fearsome business litigator Patricia Glaser, of Century City-based Christensen White Fink Jacobs Glaser Weil & Shapiro, has emerged victorious once again.

Glaser, assisted by colleague Eric Landau, represented an offshore investor, Zenga Investments Inc., against Beverly Hills-based Dabney/Resnick/Imperial LLC, the brokerage house.

Last year, Zenga had invested $2.4 million into a deal brokered by Dabney/Resnick, and lost the whole sum within five months, as we reported earlier.

Zenga purchased debt and equity in a trio of East Coast furnishing manufacturers, which were being merged.

Dabney/Resnick had a loan outstanding to the furnishings company, which was repaid when it arranged for the Zenga investment.

Zenga alleged that Dabney/Resnick's ulterior motive was to recoup its loan, by arranging for Zenga to invest. Dabney/Resnick denied the civil charges.

Zenga retained Glaser and Landau, and went into federal court. Last week, Landau, who specializes in securities law, confirmed that a jury voted 8-0 that Dabney/Resnick was liable for securities fraud, and that Zenga was entitled to its money back, plus interest. Punitive damages, if any, were yet to be determined.

In a settlement between the litigating parties, the jury verdict was "vacated," although the terms of the settlement are not public, said Landau.

A lawyer for Dabney/Resnick said the terms of the settlement prevented him from discussing the case.

"The settlement was confidential, but the jury verdict was vacated as part of the settlement," said Robert Mangels, of the Century City-based Jeffer Mangels Butler & Marmaro.

Young venture capitalist

In business about a year-and-a-half, and just 28 years old, nevertheless Lorne Goldberg has raised $18.5 million for local companies needing growth capital. He likes to specialize in smaller situations, where $1 million to $5 million is needed to fuel growth.

"This is a real niche market, but there is a real need for financing at this level," said Goldberg, who founded West Coast Capital LLC in West Los Angeles in 1995. "And there are willing investors. In fact, there are not enough deals for the money out there."

But very few people specialize in raising such relatively paltry sums of money indeed, with the pension funds now allocating billions to venture capital managers, many venture financiers will not consider deals under $20 million.

But Goldberg is active: he has raised money for Pink Dot Inc., a delivery service; Color Me Mine Inc., a do-it-yourself pottery shop acquired by Koo Koo Roo Inc.; Jakks Pacific Inc., a toy importer that went public; Rosti Inc., the eight-unit restaurant chain; and P.S. I Love You Inc., a company that produces personalized musical cassettes for birthdays, Mother's Days and other events.

Goldberg comes out of real estate investor Heitman Financial Inc.'s Beverly Hills office, and hold's a business degree from Temple University in Philadelphia. He built up contacts there he thought could be redeployed into the venture capital world.

But a warning to those who are seeking venture capital for growth: Goldberg's investors want equity (an ownership stake), and they want to have their investment increase by 250 percent in a three- to five-year horizon.

Quickies

Chatsworth-based COHR Inc., providor of services to hospitals, has been rated a "buy" by Oppenheimer & Co. Inc., the New York-based brokerage house.

COHR is yet another "roll-up" story; it is acquiring other hospital supply companies coast-to-coast. Growth is expressed by revenues, which are projected to reach $92.2 million in 1997, compared with $66.3 million in 1996. However, earnings-per-share are projected flat, at 89 cents

Standard & Poor's publication, The Outlook, notes that the number of public companies in the first quarter putting through dividend increases is at a 16-year high, but it still recommends that investors put 30 percent of assets into bonds, 25 percent into cash, and only 45 percent into stocks.

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