To some people in town, Steven Roth is best known as a former Hollywood player, an agent and producer who worked with everyone from Robert Towne to Michael Douglas and was in on the ground floor of the Creative Artists Agency. To others, he is a patron of the arts, a contemporary art collector who’s been a trustee at both LACMA and MOCA.

But for most of his life, the foundation of Roth’s wealth has come from a family business – the multibillion-dollar South Gate company World Oil Corp., founded by his father, Bernard Roth. Now that both parents have recently died, he is locked in a family feud for its control.

Industry insiders say the fight comes down to a struggle between Steven and his older brother, World Oil President Robert Roth, over various parts of the company, which is one of the largest privately held companies in Los Angeles County.

“There’s infighting between Steven and Robert,” said Bob van der Valk, a petroleum industry analyst in Terry, Mont. “Robert’s trying to buy Steven out. I think Robert wants to combine the whole thing as one company and just be able to run everything under one banner.”

The fight has become public as Steven has begun a legal battle against Robert and a third brother, another former Hollywood player, film producer Richard Roth, alleging that the two are squeezing him out of World Oil’s oil and waste recycling subsidiary, DeMenno-Kerdoon.

The Compton subsidiary alone is worth about $225 million, according to court documents, and is the largest such business in the Western United States. But it’s only a fraction of parent World Oil, which reported nearly $2.4 billion in revenue to the Business Journal last year, ranking it No. 11 on the publication’s list of the county’s largest private companies.

Despite the fighting, Steven and Robert continue to work together at the company, even sharing a secretary.

Tim Hamilton, a petroleum industry consultant in McCleary, Wash., said such squabbling is typical after the parents in a family business die.

“When there’s a fight like this it’s always over the same thing – the economic value of the asset and how to divide those assets,” he said. “It’s all just human nature. It’s the fact that it’s a billion-dollar company that makes it interesting.”

Richard and Robert Roth declined to comment through their attorneys. Steven Roth did not return calls and e-mails for comment. His attorney declined to comment.

Pioneering company

Despite its billions in revenue, World Oil is a small player in the national petroleum industry, where it is best remembered as a major pioneer of the self-service gasoline station.

The company’s early success hinged on that one innovation. In 1938, Bernard Roth opened his first gas station in South Los Angeles. It struggled, until he introduced the idea of customers pumping their own gas. By doing away with attendants, he was able to lower prices.

Major oil retailers fought the concept, and it wasn’t until the oil price shocks of the 1970s that the model caught on. By then, the company had grown to about 30 gas stations, most of them branded with such company names as Arco and Chevron. Roth bought the underlying real estate each time.

Later, the company diversified, expanding into asphalt production, trucking, marine terminal operations and real estate development. In the 1980s, it bought an 80 percent stake in oil recycler DeMenno-Kerdoon out of bankruptcy.

As of last year, the company reportedly operated about 80 gas stations in Los Angeles County and 40 elsewhere.

During the time of the company’s diversification, Robert Roth served as president. The other two brothers have had varying degrees of involvement.

During the late 1970s and 1980s, Steven and Richard made their names in Hollywood. Steven joined a group of former agents from William Morris Agency to become one of the first partners at the agency CAA, while Richard became a producer of films including “Julia,” “The Way We Were” and “Blue Velvet.”

Screenwriter Joe Eszterhas, a former client of Steven’s at CAA, described him in his autobiography as “a free spirit drawn to long getaway weekends with people like Debra Winger.” But the brother also displayed shrewd business acumen. A chapter about the early days of CAA in Mark Litwak’s “Reel Power” describes how Steven would aggressively sell movie packages even if the attached directors and stars said no.

“He could make the deal so rich that no sentient human being would be able to pass on it,” screenwriter David Freeman was quoted saying.

Steven left CAA to become a producer, then became a vice chairman at rival agency International Creative Management, only to return to producing yet again. His list of credits includes the Bill Murray vehicle “Scrooged” and the Arnold Schwarzenegger film “Last Action Hero.”

During the 1990s, Steven turned his focus to the family business as the executive vice president of World Oil.

He also continued the family’s efforts in philanthropy. He was a board member at the Museum of Contemporary Art, Los Angeles from 2006 until this year, and in 2010 joined the board at the Los Angeles County Museum of Art, where his parents have a gallery named after them. He sponsored an exhibit at LACMA last year and has purchased works for the museum at the request of its director, Michael Govan.

“He’s been fantastic,” said Terry Morello, vice president of external affairs at LACMA. “He’s really rolled up his sleeves and participated in a lot of committees and fundraising events.”

While Steven became more involved in family affairs, Richard moved to New York and has mostly stayed out. Robert, meanwhile, had been handed the reins as president.

From the outside, things seemed to run fine until the death of Bernard Roth last year, at age 95.

Family feud

Bernard’s death was followed in July by that of his wife Florence, who helped him build the company.

According to industry analyst van der Valk, the parents wanted the company to stay in the family, and have structured it in such a way that makes it financially impractical to sell to an outside buyer, and also makes it difficult for the brothers to buy each other out.

Indeed, Steven’s lawsuit, filed last month in Los Angeles Superior Court, describes how the father set up a trust in 1997 that prevents any of the brothers from selling their shares in DeMenno-Kerdoon without approval from the other two. It also prevents any decisions related to the subsidiary without approval from at least two brothers.

But within weeks of his mother’s death, Steven alleges in his lawsuit that the other two brothers began hatching a backdoor move to exclude him. The lawsuit alleges that Richard is planning to sell his stake in the subsidiary for $60 million back to the company, which would give Robert 63 percent of the family’s voting power and unilateral control.

He also alleges his older brothers are keeping him out of decisions, including discussions about a potential $110 million acquisition he opposes. His lawsuit seeks to block the acquisition and the sale of Richard’s stake, and to force his brothers to give him greater access to documents. If he cannot get those things, he wants the subsidiary dissolved.

DeMenno-Kerdoon recycles hazardous waste and oil into fuel oil, asphalt and other petroleum-based products. It even recycles the seepage of tar and water from the La Brea Tar Pits. The lawsuit states that its earnings before interest, taxes, depreciation and amortization are between $17 million to $34 million a year.

DeMenno-Kerdoon has responded in court that Steven has sabotaged potential moves by threatening litigation against a potential lender for the acquisition.

Larger fight

The fight could be a sign that a larger one looms over the whole company. Van der Valk said Steven and Robert run different parts of the business, and that now with their parents gone, there is a conflict for control. Adding to the tension are some grandchildren of Bernard who also work for the company, he said.

Industry consultant Hamilton said conflicts can arise when a company has several parts, some of them more lucrative than others.

“If you had a good truck and a bad car and two brothers, you’d probably have the same fight,” he said.

Both said that the retail side of the business was likely the big prize.

Michael Geibelson, an attorney who’s not involved in the case but reviewed it for the Business Journal, said that he expects Steven will be granted greater document access, but that much of the rest of the case would depend on what’s presented in court.

Most recently, a Superior Court judge denied a temporary restraining order sought by Steven to stop his brother’s stock sale back to the company and the acquisition. The brothers had argued that the sale and acquisition were not imminent.

How the rest of the case goes is unclear given how little evidence has been presented. However it turns out, the brothers’ relationship may have been permanently damaged.

“While it sounds like a plot from a Shakespearean drama,” Steven’s lawsuit states, “unfortunately it is not fiction.”

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