Rothenberg Stacking New Bank With Influential Board Members
Alan Rothenberg, the Los Angeles lawyer who founded Major League Soccer, has received preliminary approval from regulators to open his lending start-up, 1st Century Bank, which will be based in West Los Angeles.
The bank is expected to raise an estimated $17.5 million by early next year, according to the conditional approval letter from the federal Office of the Comptroller of the Currency.
The OCC and the Federal Deposit Insurance Corp. both gave preliminary green lights last month for the national charter. A prospectus filed with regulators must be approved before officers can begin selling stock to private investors.
The new bank boasts a high-powered board, including Alan D. Levy, chairman and chief executive of commercial developer Tishman International Cos.; Lewis N. Wolff, chairman of Maritz Wolff & Co., an investment fund with a stake in the Fairmont Hotels; and Marshall S. Geller of merchant banking firm Geller & Friend Capital Partners Inc.
“There hasn’t been this much buzz about a bank since 1st Business Bank,” said Ed Carpenter, principal at Carpenter & Co., an investment banking firm in Irvine, referring to the Los Angeles bank that was founded in 1981 by lawyer-entrepreneur John Anderson and later sold to Mellon Corp. It is now called Mellon 1st Business Bank.
Rothenberg is expected to use his extensive contacts in L.A.’s legal and entertainment communities to drum up business for 1st Century.
Richard S. Cupp, whose previous stints include Hemet Federal Savings and Loan Association, First Bank and Imperial Credit Industries, will be president and chief executive of the new bank, while Jeffrey M. Waston, formerly of Hemet Federal and Pacific Century Bank, will be executive vice president and chief operating officer.
West Coast Asset Management tends to operate in a low-key manner similar to that of its co-owner, Kinko’s cofounder Paul Orfalea.
But the Ventura-based money manager found itself playing a more public role during a five-month bidding war for a specialty drugmaker that ended earlier this month.
Normally, West Coast quietly manages its $110 million portfolio, which includes a 2.2 percent stake in Compton-based Arden Group, the parent of the Gelson’s supermarket chain. Orfalea, who founded West Coast three years ago after leaving Kinko’s, shares investment decisions with his cousin Lance Helfert, a former Wilshire Associates analyst.
West Coast uncharacteristically went public with its complaints in August when Minnesota-based Cima Labs Inc., in which it holds a 2.5 percent stake, became the target of a bidding war between rivals aaiPharma which already agreed to buy the company for $22 and Cephalon, which offered $4 per share more.
Attacking both bids as being “well below its intrinsic value,” West Coast claimed in an August press release that Cima’s shares were worth at least $32 after taking into account its “vast real estate,” $135 million in cash and its OraVescent technology for creating easier-to-dissolve drug coatings.
“Cima was going to stick with the aaiPharma bid, but they couldn’t get anyone to sign on. After we complained about the Cephalon bid, they couldn’t possibly accept the Cephalon bid either,” said Helfert.
After complaints from other shareholders and a third bid, Cima accepted a sweetened $34-per-share offer from Cephalon on Nov. 5. West Coast, which bought its stake at $22 per share, stands to reap a $4.4 million profit for its clients.
“We never want to go public,” said Helfert. “Paul and I are just long-term investors, not ones to stir things up. We just want the full value.”
The Color of Money
Four months after taking Digital Theater Systems’ spectacular public debut, its earliest investors are looking to reap a windfall.
The Agoura Hills-based maker of sound systems, which counted director Steven Spielberg as one of its earliest investors, made a splash on Wall Street in July when its shares reached a high of $23.90 during its first day of trading on Nasdaq. Since then, Digital Theater shares have climbed to $25.63, a 50 percent premium over its initial offering price of $17 a share.
In a secondary offering that was announced last week, early investors will sell 3 million shares along with 1.5 million newly issued ones.
Among the sellers are General Electric Co.’s Universal City Studios, which will trim its stake to about 7 percent from 11.7, and money manager Westin Presidio Partners, DTS’ largest shareholder, which will reduce its holdings to just over 13 percent from 22.3 percent by selling nearly 1 million shares.
Spielberg, whose DreamWorks SKG uses DTS equipment, will be joining the sellers. He’s an investor in Forth Investors LLC, which will reduce its holdings to 6.6 percent after the offering from 11.7 percent.
US Bank wants to steal the crown held by Bank of America as the leading provider of SBA loans in Los Angeles.
Sure, US Bank loaned $95 million to small businesses for the fiscal year ended Sept. 30 nearly double the $55 million made by Bank of America in the same period.
The problem is, the Small Business Administration ranks SBA lenders by number of loans, not dollar volume. With 1,468 loans, Bank of America beats US Bank’s 168 borrowers by a landslide.