Charter Company

Charter Company was a diversified American conglomerate founded in Jacksonville, Florida, in 1949 by Raymond Knight Mason. Its origins lay in the Mason Lumber Company, established in 1919, but Mason developed Charter around a broader group of Florida mortgage, banking and land-development businesses. The company benefited from relationships with influential Florida businessman Edward Ball and from transactions involving assets associated with the Alfred I. du Pont Testamentary Trust. Its early corporate offices were in Jacksonville's Universal-Marion Building. Charter's growth accelerated during the 1960s and 1970s as it pursued an aggressive acquisition strategy. In 1968 it bought a network of approximately 60 small gasoline stations. In 1970 it acquired a petroleum operation from the Signal Companies, including a refinery in Houston, a southeastern service-station network and tanker contracts. The same year it purchased the Florida National Bank Group after changes in federal law required the du Pont charitable trust to divest its banking interests. Charter also held a substantial interest in St. Joe Paper Company, and the two companies exchanged shares in 1972 as part of a proposed combination. The 1973 oil crisis temporarily made Charter's petroleum assets highly valuable. During the following decade, however, the group continued to broaden its portfolio. It bought Redbook magazine from Norton Simon in 1975, strengthened its interest in Downe Communications and acquired the publisher in 1978; Downe's portfolio included Ladies' Home Journal and, through an earlier acquisition, Sport. Charter also expanded its oil holdings through the 1979 purchase of Carey Energy Corporation and its 1980 decision to acquire Commonwealth Oil Refining Company and a large Puerto Rican refinery. These transactions exposed Charter to substantial commodity, financing and operating risks. By the early 1980s, Charter was organized principally around oil refining, insurance and communications. It had more than 180 subsidiaries and appeared in the Fortune 500 for 11 consecutive years beginning in 1974, ranking 61st in 1984. Reported sales were approximately $5 billion in 1981, but earnings were weakened by falling oil prices and the resulting oil glut. Management began reducing communications and publishing holdings in an effort to simplify the group. Charter reported net earnings of $53.89 million, or $2.01 per share, in 1983, but the following year brought a reported net loss of approximately $749.34 million, largely attributed to discontinued operations, bankruptcy-related costs and estimated losses on asset disposals. The company suffered a major management tragedy in July 1982 when a helicopter crash in Ireland killed president and chief operating officer Jack T. Donnell and three senior Charter Oil executives. Zeke Zechella succeeded Donnell as president. Charter also faced extensive environmental and toxic-waste litigation connected with the activities of Independent Petrochemical Corporation, a wholly owned Charter Oil subsidiary. IPC had arranged for disposal of dioxin-contaminated waste that was improperly mixed into used oil and sprayed on roads and other sites in Missouri. Government and private claims followed, and IPC ultimately entered settlements covering cleanup and related claims. Charter and 43 subsidiaries, including IPC, filed for Chapter 11 protection on April 20, 1984. The filing followed the collapse of oil prices, pressure on refinery economics and the loss of trade credit needed to buy crude oil. The company reduced its Jacksonville and Houston workforces and closed its Jacksonville headquarters. Raymond Knight Mason sold his Epping Forest estate and resigned as chairman in 1984, while Zechella retired the next year. Most subsidiaries were sold before Charter emerged from court protection in 1987; creditors received stock representing a controlling interest, and Carl Lindner acquired control through bankruptcy proceedings. The bankruptcy was discharged in 1988, after which American Financial Corporation moved the company to Cincinnati. By 1991 Charter's principal remaining asset was an 82 percent interest in Spelling Entertainment. Charter sold its remaining oil operations in a management buyout in early 1992 and agreed to merge with Spelling Entertainment later that year. On October 5, 1992, Charter was renamed Spelling Entertainment Group, Inc., and its NYSE ticker changed from CHR to SP. Blockbuster Entertainment later acquired a controlling interest in Spelling, followed by Viacom's acquisition of Blockbuster's stake and then the remaining Spelling shares. Charter Company therefore ceased to exist as an independent conglomerate. It was unrelated to the later American cable operator Charter Communications.

Charter Company developed from the Mason Lumber Company, founded in 1919, and was formally established in Jacksonville in 1949 by Raymond Knight Mason. Mason initially assembled mortgage, banking and land-development interests in Florida. His association with Edward Ball, who managed assets connected with the Alfred I. du Pont Testamentary Trust, helped place Charter near important regional financial and industrial networks. The company became an acquisition-driven conglomerate. Its 1968 purchase of approximately 60 gasoline stations marked a major move into energy. In 1970 Charter bought petroleum assets from the Signal Companies and acquired the Florida National Bank Group after legal changes required the du Pont trust to dispose of its banking interests. Charter and St. Joe Paper exchanged shares in 1972 in connection with a proposed merger, illustrating the interlocking ownership arrangements surrounding the company during its expansion. The oil crisis of 1973 increased the value of Charter's petroleum operations, but later volatility exposed the risks of its strategy. Charter entered publishing with its 1975 acquisition of Redbook and expanded through Downe Communications, whose properties included Ladies' Home Journal. It also bought Carey Energy in 1979 and pursued Commonwealth Oil Refining Company and its Puerto Rican refinery in 1980. These deals gave Charter a broad presence in refining and fuel distribution but placed substantial demands on capital and trade financing. During the early 1980s Charter operated through oil refining, insurance and communications divisions and controlled more than 180 subsidiaries. It was a Fortune 500 company for 11 years beginning in 1974. Falling oil prices reduced earnings, while management sought to dispose of less central publishing and communications assets. The death of president Jack T. Donnell and three Charter Oil executives in a 1982 helicopter crash caused a significant leadership disruption. Charter's financial and legal problems intensified. Independent Petrochemical Corporation, a Charter Oil subsidiary, became involved in litigation concerning the improper disposal of dioxin-contaminated waste in Missouri. On April 20, 1984, Charter and 43 subsidiaries filed for Chapter 11. The company laid off personnel in Jacksonville and Houston, closed its Jacksonville offices and sold most subsidiaries during the reorganization. Charter emerged from court protection in 1987, with creditors receiving stock that gave them a controlling position. Carl Lindner acquired control, and American Financial Corporation later held a majority interest and moved the company to Cincinnati. The bankruptcy process was discharged in 1988. Charter's final corporate phase centered on Spelling Entertainment. It acquired an 82 percent stake in Spelling in 1991 and sold its remaining oil businesses in early 1992. Charter and Spelling agreed to merge, and on October 5, 1992, Charter was renamed Spelling Entertainment Group, Inc. The former Charter enterprise was subsequently absorbed into the corporate history of Spelling, Blockbuster and Viacom. Charter Company should not be confused with Charter Communications, the later cable company, which is unrelated.

• 1992

  Renamed Spelling Entertainment Group

  [1]Charter Companyen.wikipedia.org

  Charter merged with Spelling Entertainment and changed its corporate name and ticker.

• 1987

  Emergence from bankruptcy protection

  [1]Charter Companyen.wikipedia.org

  Most subsidiaries had been sold and creditors received controlling Charter stock as the company emerged from court protection.

• 1984

  Chapter 11 filing

  [1]Charter Companyen.wikipedia.org

  Charter and 43 subsidiaries filed for bankruptcy protection.

• 1982

  Senior executives killed in helicopter crash

  [1]Charter Companyen.wikipedia.org

  Four senior executives died in an Irish helicopter accident, including president Jack T. Donnell.

• 1978

  Downe Communications acquired

  [1]Charter Companyen.wikipedia.org

  Charter acquired the publishing company behind properties including Ladies' Home Journal.

• 1975

  Redbook acquired

  [1]Charter Companyen.wikipedia.org

  Charter purchased Redbook from Norton Simon.

• 1974

  Fortune 500 presence begins

  [1]Charter Companyen.wikipedia.org

  Charter began an 11-year run in the Fortune 500.

• 1970

  Expansion into petroleum and banking

  [1]Charter Companyen.wikipedia.org

  Charter bought petroleum assets from the Signal Companies and acquired the Florida National Bank Group.

• 1968

  Entry into gasoline retailing

  [1]Charter Companyen.wikipedia.org

  Charter acquired approximately 60 small gasoline stations.

• 1949

  Charter Company established

  [1]Charter Companyen.wikipedia.org

  Raymond Knight Mason founded Charter Company in Jacksonville, Florida.

• 1919

  Mason Lumber Company founded

  [1]Charter Companyen.wikipedia.org

  The business lineage that later developed into Charter Company began with the Mason Lumber Company.

A highly acquisitive, diversified American conglomerate whose portfolio combined energy, financial services, insurance and media assets.

• Petroleum refining and distribution · 1970

  Charter Oil

  Charter Oil was the group's principal energy operation. Its assets included a Houston refinery, southeastern gasoline stations, tanker contracts, interests in refinery operations in the Bahamas and a major Puerto Rican refinery acquired through the company's expansion strategy.

• Banking · 1970

  Florida National Bank Group

  The Florida National Bank Group represented Charter's banking interests after the company acquired it in 1970 from interests associated with the Alfred I. du Pont Testamentary Trust.

• Magazine publishing · 1975

  Redbook

  Redbook was Charter's principal named magazine acquisition, purchased from Norton Simon in 1975 as the conglomerate expanded into communications and publishing.

• Magazine publishing · 1978

  Downe Communications publications

  Through Downe Communications, Charter owned publishing assets including Ladies' Home Journal and properties connected to Downe's earlier acquisition of Bartell. These holdings were part of Charter's communications division before later rationalization.

• Television production · 1991

  Spelling Entertainment investment

  Spelling Entertainment became Charter's final major operating interest. Charter held an 82 percent stake before the two companies merged in 1992, ending Charter's identity as a standalone conglomerate.

• 1983

  Dioxin waste disposal litigation

  Independent Petrochemical Corporation, a wholly owned Charter Oil subsidiary, faced government and private claims after dioxin-contaminated waste was improperly mixed into used oil and sprayed at sites in Missouri. The litigation involved more than 1,600 private plaintiffs as well as federal and state authorities. IPC later entered settlements covering the claims and cleanup obligations.

  Source

• 1978

  Questions concerning contacts with Robert Vesco

  Charter acknowledged that two oil executives had discussions with fugitive financier Robert Vesco in 1978 and 1979, following earlier business discussions involving Vesco and Raymond Knight Mason. The matter attracted attention amid congressional investigations into Vesco's connections with other political and business figures; the cited material states that no laws were broken.

  Source

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• 1992

  Merge with Spelling EntertainmentM&A

  Background

  After disposing of its remaining oil operations, Charter's principal asset was its majority interest in Spelling Entertainment.

  Action taken

  Charter merged with Spelling and changed its name to Spelling Entertainment Group, Inc.; its NYSE ticker changed from CHR to SP.

  Aftermath

  The Charter Company name disappeared, and the remaining enterprise later became part of the corporate history of Blockbuster and Viacom.

  Source

• 1984

  File for Chapter 11 protectionOther

  Background

  Falling oil prices, weak refining economics and the loss of trade credit left Charter unable to finance crude purchases and support its diversified structure.

  Action taken

  Charter and 43 subsidiaries filed for Chapter 11 protection on April 20, 1984.

  Aftermath

  The group closed offices, reduced staff, sold most subsidiaries and transferred control to creditors and later Carl Lindner.

  Reported net loss. $53.89 million net earnings in 1983 → $749.34 million net loss in 1984 (1983-1984)

  Source

• 1980

  Pursue Commonwealth Oil Refining CompanyM&A

  Background

  Charter continued to enlarge its refining platform despite increasing exposure to oil-price and financing cycles.

  Action taken

  It decided to buy Commonwealth Oil Refining Company and its Puerto Rican refinery, while also planning a refinery in Alaska.

  Aftermath

  The expansion increased Charter's scale but intensified the capital and operating pressures that later contributed to its collapse.

  Proposed acquisition price. $650 million (1980)

  Source

• 1970

  Acquire Signal petroleum operationsM&A

  Background

  Charter sought to build a major energy business alongside its existing Florida financial and land-development interests.

  Action taken

  It purchased a petroleum operation from the Signal Companies, including a Houston refinery and gasoline stations.

  Aftermath

  The transaction gave Charter significant exposure to petroleum markets and produced benefits during the 1973 oil crisis, but later contributed to financial vulnerability.

  Purchase price. $70 million (1970)

  Source

1. 1Charter Companyen.wikipedia.org