Alan Gerry Leaves, Harry Rhulen
Steps Down in Frontier Shakeup
By John Emerson and Dan Hust
ROCK HILL February 25, 2000 -- In the wake of last weeks layoffs, Frontier Insurance Group announced Wednesday that billionaire Alan Gerry has resigned from the companys board of directors and Harry Rhulen has stepped down as the companys chairman.
Jacob Billig, vice-president for investor relations, said yesterday that Gerrys resignation was based on greater demands being placed on members of the board and the additional time commitment that would be needed to fill those demands. He said Gerrys departure from the board and the arrival of Jerry Goldress, who will serve as the new chairman, marked a significant step in transforming the company and returning it to profitability.
Just this week, Frontier announced a net loss of $44.7 million in the fourth quarter. Although thats down from the companys $99.4 million net loss this time last year, Frontier has lost nearly $188 million in 1999 alone, as compared to a net loss in 1998 of $50 million.
Thats why Frontier officials are counting on Goldress to restore crucial financial strength and credibility.
Goldress, who is a corporate turnaround specialist, is president of a Nevada-based company that specializes in taking struggling companies and rescuing them. Billig said the action was fully endorsed by Rhulen, who will retain the titles of President and Chief Executive Officer within the company.
[Goldress] is a master of the turnaround, said Billig. As the chairman, hes going to be working with the other directors and the management team to effectuate changes that will restore Frontier to its prior level of credibility. Hes going to be rolling up his sleeves and getting to work, and Harry is looking forward to working with him.
Commenting on Gerrys resignation, Billig said when Gerry was appointed to the companys board, Walter Rhulen was running the company, and things were very stable. He said the conditions at that time did not require a large commitment of time from board members, but as the companys fortunes have declined, additional burdens have been added.
Alan resigned because there are going to be greater time demands placed on board members, and it was in the best interests of the company and of his own business interests that he should resign, Billig said. He continues to be a big supporter of Frontier and is a valued advisor to the organization. We fully expect to maintain those ties in the future.
Billig himself is resigning next week to take another job elsewhere. And hes not the only one. While Executive Vice-President and Chief Investment Officer Richard Seyffarth will take over Billigs duties, another executive v.p., Ted Rupley, has already resigned. Other shifts include executive vice-presidents Jim Satterfield and Pat Kenny becoming the executive v.p. of e-commerce and the chief financial officer, respectively. Frontiers former CFO, Mark Mishler, is now in Rupleys position.