A district court judge has called a conference this Friday to meet with representatives of five different lawsuits against Marriott Corp.
Judge Alexander Harvey 2d will conduct the conference in U.S. District Court for the District of Maryland, sources famillar with the various cases said. Some sources described the meeting as a "status conference."
All five suits name Marriott Corp. and officials J. Willard Marriott Jr., Richard E. Marriott, and Stephen F. Bollenbach as defendants. The suits were filed following Marriott's Oct. 5 announcement to split into two companies, with one company, Host Marriott, being saddled with most of the debt.
PPM America Inc.'s suit represents nine institutions. The others all appear to be class action suits, one source said. They are brought by Edmund Tomlinson, United Apple Sales Inc., Howard W. Bleiman, and Harvey Levy.
The PPM America suit, which represents holders of more than $100 million of Marriott senior securities, charges that the company failed to disclose its plan to split in two when it issued $400 million of senior notes in April and May, and withheld information from the secondary market as late as September.
In other news, Cooper Cos. Inc. Friday said Louis A. Craco had resigned as a company director "in order to avoid any appearance of a conflict of interest between his duties as a director and his continuing legal representation of Steven G. Singer, the company's chief operating officer in connection. with a civil enforcement action recently initiated by the Securities and Exchange Commission."
Craco is a senior partner of the New York law firm of Willkie Farr & Gallagher.
The SEC recently filed action against Singer, his brother, and Cooper Cos. alleges junk-bond trading improprieties.
In secondary activity Friday, investment-grade bonds ended unchanged in quiet trading. One trader noted, however, that spreads tightened by about five basis points on the week. High-yield bonds closed up 1/4 point.
Chase Manhattan Corp. issued $200 million of 7.50% subordinated notes due 1997. The noncallable notes were priced at 99.92 to yield 7.518%, or 152 basis points over comparable Treasuries. Moody's Investors Service rates the notes Baa3, while Standard & Poor's Corp. rates them BBB. Merrill Lynch & Co. lead managed the offering.
Manor Care issued $150 million of 9.5% senior subordinated notes due 2002 at par. Callable after five years at a premium, the notes were rated Ba2 by Moody's and BB-plus by Standard & Poor's. Dillon, Read & Co. lead managed the offering.
Fifth Third Bancorp late Thursday issued $125 million of 4.25% convertible subordinated notes due 1998. Noncallable for three years, the notes convert into common stock at $63.625, a 24.75% conversion premium. Moody's rates the offering A2, while Standard & Poor's rates it A-plus. Goldman, Sachs & Co. and J.P. Morgan Securities Inc. co-lead managed the offering.
Sea Containers Ltd. issued $100 million of senior subordinated 12.5% debentures due 2004. Callable after seven years at 106.25, the debentures were priced at 97 to yield 13%. Moody's rates the offering B1, while Standard & Poor's rates it. BB-minus. Lazard Freres managed the offering.
Standard & Poor's has downgraded NWA Inc.'s $200 million of 8 5/8% senior unsecured notes to CCC-plus from B-minus and put the rating on CreditWatch with negative implications.
Standard & Poor's also placed the B rating on subsidiary Northwest Airlines Inc.'s $7.7 million Los Angeles Regional Airport Improvement Corp. special revenue bonds on CreditWatch for a possible downgrade.
"The downgrade of the senior unsecured notes reflects further erosion of the equity base, due to ongoing losses, and the bondholders' standing as unsecured creditors of the holding company, which places them in an essentially subordinate position," a rating agency release says, "NWA is engaged in discussions with unions, banks, shareholders, and other parties regarding a program to cut operating costs, restructure debt, and raise new capital."