WEINGLASS EXITS MGR
Byline: Carol Emert
WASHINGTON — Leonard (Boogie) Weinglass resigned as chairman of Merry-Go-Round Enterprises Inc. Wednesday, ending his 26-year association with the company he founded in 1968.
Thomas Shull, MGR’s chief executive, will replace Weinglass as chairman. James Kenney, formerly MGR’s executive vice president and chief operating officer, is assuming the president’s title from Shull and continuing as chief operating officer. He will also join the board, replacing former president Michael Sullivan.
“It’s really with mixed feelings we send [Weinglass] off to the next chapter of his life, but we’re very confident in [merchandisers] Lou Spagna and Frank Tworecke to fill the void,” Shull said. “Boogie picked them and he made very wise choices.”
Spagna, president of the Menz division, and Tworecke, president of the Merry-Go-Round division, are “very strong candidates” to replace Shull and Kenney when the company emerges from Chapter 11 protection, Shull added. He said he hopes to pull the company out of bankruptcy as early as this summer.
Twelve years ago, Weinglass left the day-to-day operations of Merry-Go-Round. He remained chairman and returned in November 1993 to lead the firm out of a sales slump, but MGR was forced to file Chapter 11 two months later, in January 1994.
“It was a very sad and emotional day for me [Tuesday] when I made that decision,” said Weinglass, speaking by telephone from Aspen. “I just had enough. After 26 years, it was just not the same, and a lot of our friends are gone. Merry-Go-Round to me was always a family-type atmosphere, always lots of fun. But when I went back this last time, the fun was gone. It was strictly dollars and cents.”
Wilbur Ross, senior managing director of Rothschild Inc., which is advising shareholders in the bankruptcy, said Weinglass had planned all along to phase out his role with the company.
His departure coincided with another turn in the Joppa, Md.-based company’s bankruptcy. According to a published report here, MGR is questioning whether Bear, Stearns & Co., a major creditor, acted on insider information when trading MGR stock this month.
Hannah S. Burns, managing director of corporate communications at Bear Stearns, denied any wrongdoing in the trading of a total of 53,000 MGR shares on Jan. 5 and 9, when stock prices had soared following the company’s Dec. 30 announcement that all parties had reached agreement on a reorganization plan.
Wednesday’s Washington Post quoted a letter from MGR to Bear Stearns saying, “It has come to our attention that…Bear Stearns may have traded in the securities of Merry-Go-Round Enterprises Inc…. It is assumed that all such trades were not based on material, nonpublic information and that Bear Stearns has created an effective Chinese wall” to prevent the use of information gleaned during the bankruptcy process from being used to make trades.
MGR asked Bear Stearns to sign a confidentiality agreement, which would restrict its trading in MGR stock. All other investment banks involved in the case have signed such agreements and halted trading.
In a letter released by Bear Stearns Wednesday, the firm denied analyst Steven Gidumal, who helped negotiate the reorganization, had been given sensitive information during the talks.
In addition, the letter said, “We firmly believe and are convinced that the trader who sold the shares acted solely and exclusively upon publicly available information and her own analysis of such information.”
MGR stock closed Wednesday at 1 5/8, up 1/4 on the NYSE.