Narrative Of Utah Railway Corporate Parent Activity
This page was last updated on April 12, 2008.
Utah Railway's parent corporation was United States Smelting Refining & Mining Co., or USSR&M. Almost all of Utah Railway's coal traffic came from the mines of United States Fuel Co., another USSR&M-owned company.
Contrary to numerous rumors, and information published in error, Union Pacific has never had any financial interest in Utah Railway. However, the two companies have always enjoyed a good working relationship because all of Utah Railway's interchange of most of its traffic at Provo with UP.
January 22, 1918:
United States Smelting, Refining & Mining Co., was incorporated in Utah. (Utah corporation records, index number 13150)
October 17, 1965:
United States Smelting, Refining & Mining Co., was merged with subsidiary Mueller Brass Co.; name changed back to USSR&M. (Utah corporation records, index number 13150)
1971:
United States Smelting, Refining & Mining Co. ended the operation of its lead smelter in Midvale, Utah. (United States v. Sharon Steel Corp.)
May 2, 1972:
Utah Railway's parent company, United States Smelting, Refining & Mining Company announced that it would change its name to UV Industries, Inc., its symbol on the New York Stock Exchange. The company was becoming more diversified and the longer name no longer reflected its "principle interests and direction." (New York Times, May 3, 1972, "yesterday")
September 1976:
As early as September 1976, Victor Posner's Sharon Steel Company held as much as 20 percent of UV Industries stock. (New York Times, September 17, 1976) Posner held the same percentage by early December 1977. (New York Times, December 9, 1977)
1977-1978:
Victor Posner began his hostile takeover by buying shares of UV Industries, following his pattern of buying interest in companies that were undervalued in relation to their stock price. By late 1978, he had accumulated 22 percent, and continued his attempt at control of the company. (McGinty)
August 17, 1977:
UV Industries announced that it had been approached by "several concerns with a view to a possible combination." (New York Times, August 19, 1977, "Wednesday")
December 19, 1978:
UV Industries announced that the company would sell its most profitable subsidiary, Federal Pacific Electric Co., which during 1978, had accounted for 60 percent of UV's revenues and 81 percent of its profits. During the same time, UV's "metal mining" activities, which included United States Fuel and Utah Railway, along with its Mueller Brass subsidiary, accounted for 13 percent of profits and 38 percent of revenue. This action was to make UV Industries less attractive to Posner's hostile takeover. (McGinty; United States v. Sharon Steel; Sharon Steel v. Chase Manhattan)
January 19, 1979:
UV Industries announced that it would liquidate all of its assets, again to stop Posner's hostile takeover. (Sharon Steel v. Chase Manhattan)
March 29, 1979:
UV Industries sold its Federal Electric subsidiary to Reliance Electric for $345 million in cash. On February 2, 1979, UV had announced to its shareholders its intended action to sell its subsidiaries and liquidate its assets. On March 26, 1979, the shareholders approved the intended actions. (Sharon Steel v. Chase Manhattan)
October 2, 1979:
UV sold its oil and gas properties to Tenneco Oil Company for $135 million in cash. (Sharon Steel v. Chase Manhattan)
November 1979:
The United States Fuel mine at Hiawatha, and the Utah Railway, along with other assets, were sold by UV Industries to Sharon Steel Co. UV Industries had been holding talks earlier with Reliance Group, but those talks broke down. A group of railroad employees had hoped to be able to buy the railroad. The announced sale brought those hopes to an end.
(Deseret News, November 27, 1979)
November 26, 1979:
Sharon Steel Corporation, a subsidiary of NVF Co., controlled by Posner, purchased the remaining assets of UV Industries, after a bidding contest between Sharon Steel and The Reliance Group, controlled by Saul Steinberg. Included in the sale were Mueller Brass Co., United States Fuel Co., and Utah Railway Co., along with UV's other mining properties. The sale was for $518 million, which included $107 million in cash and $411 million in Sharon Steel junk bonds that were set to mature in 2000, but which were valued at the time at 86 percent, or $353 million. (McGinty; United States v. Sharon Steel; Sharon Steel v. Chase Manhattan)
1979-1988:
In the 1979 to 1988, Posner was subject to Securities & Exchange Commission investigation and suit for his investment activities.
1982-1983:
U. S. Fuel lost $4 million during 1982. The April 1983 Thistle slide forced U. S. Fuel to postpone its call back of 289 workers until July 1st. Survival of the company depended on a production figure of 20 tons per man shift. (Coal Age, Volume 88, number 6, June 1983, p. 33, "Coal in Brief, Utah Mudslide")
1987:
Sharon Steel's Midvale smelter site was designated as an EPA Superfund site in 1987, and the United States brought suit against Sharon Steel for it to clean up the site. Opening arguments were heard on April 10, 1987. A week later, Sharon Steel filed for Chapter 11 bankruptcy. (United States v. Sharon Steel)
April 17, 1987:
Sharon Steel declared Chapter 11 bankruptcy. (Mueller Industries, SEC Form 10K, 1993; Wall Street Journal, July 19, 1988, p. 10)
1988:
Posner pleaded "no contest" to the SEC charges and investigation, setting the stage for the reorganization of his Sharon Steel company.
December 30, 1988:
United States Fuel Company laid off 66 miners because of reduced amounts of coal going to Nevada Power, and to the Intermountain Power Plant at Delta. The reduction would shut down King No. 6, leaving King No. 4 as the only operating mine of United States Fuel. Each of the mines used a continuous, longwall mining machine to produce its coal. (Salt Lake Tribune, December 24, 1988, p. 6B)
December 28, 1990:
Sharon Steel was reorganized as Mueller Industries, a new corporation incorporated in Delaware for the purpose on October 31, 1990. Sharon Steel sold its steel business to Sharon Steel Specialties Co., retaining all of its other non-steel properties. The now-smaller Sharon Steel then merged with the new Mueller Industries, a name selected to reflect the now-dominant Mueller Brass interests. The new company's assets included all of the former Mueller Brass Co., along the assets of United States Fuel Co., Utah Railway Co., and all of the other former USSR&M mining properties and natural resource assets. All assets other than those of Mueller Brass were placed under the umbrella of a new company titled Arava Natural Resources Co., of which United States Fuel and Utah Railway were direct subsidiaries. (Mueller Industries, SEC Form 10K, 1993)
March 1993:
United States Fuel Co. stopped producing coal from its Hiawatha mine (King No. 4), the last of its operating coal mines. In 1994 the company completed negotiations to sell its 12,700 acres of coal property (10,000 owned and 2,700 leased), but by 1995 the sale was not yet completed. The sale was completed in 1997. (Mueller Industries, SEC Form 10K, 1995, 1996, and 1997)
August 28, 2002:
Mueller Industries sold its Utah Railway subsidiary to Genesee & Wyoming Inc. for $55.4 million. (Mueller Industries, SEC Form 10Q, 3rd Qtr. 2002)
Sources:
DiBartolomeo,
Kim. Mergers and Acquisitions.
(http://www.stfrancis.edu/ba/ghkickul/stuwebs/btopics/works/merger.htm)
McGinty, Park. Twilight of Fiduciary Duties: On the Need For Shareholder Self-Help in an Age of Formalistic Proceduralism
(http://els413.law.emory.edu/ELJ/volumes/win97/mcginty_fn.html)
Mueller Industries. Form 10K annual reports to Securities and Exchange Commission. 1993 through 2002.
Sharon Steel Corp. v. Chase Manhattan Bank, N.A., United States Court of Appeals for the Second Circuit, Case 691 F.2d 1039, 1982
United States v. Sharon Steel Corp., District Court of Utah, Case No. C-86-0924, August 18, 1987
Watkins, Thayer. Summary of Benjamin Stein's License To Steal: The Network of Junk Bond Financiers.
(http://www.sjsu.edu/faculty/watkins/lts.htm)
