PAGE 12 LEVEL 1 - 58 OF 136 STORIES San Antonio Business Journal March 22, 1991 SECTION: Vol 5; No 12; Sec 1; pg 3 LENGTH: 1229 words HEADLINE: Rosenberg No Longer Law Firm Shareholder BYLINE: Travis E. Poling DATELINE: San Antonio; TX; US BODY: Atter a year of speculation, San Antonio law firm Oppenheimer, Rosenberg, Kelleher & Wheatley Inc. has made official its business separation from name partner and real estate mogul Stanley Rosenberg. Rosenberg, who is now of counsel for the city's fifth-largest law firm, is no longer a shareholder or full-time lawyer at the firm, but his name will remain in the firm's title. Partners at Oppenheimer, Rosenberg say Rosenberg was relieved of partner duties and stripped of his shareholder status in February 1990, but the firm never announced it and only recently made the change on its stationery letterhead. Rosenberg, who has interests in a myriad of real estate partnerships and businesses, says the move is "really not much of a change" and that he will now devote more time to his business interests and spend less time in the management issues of the firm -- "which I didn't enjoy very much anyway," he says. Working from the same office he has occupied for years, Rosenberg says, "I'm still going to be very active in the practice of law." The change in Rosenberg's status with the firm "was an agreement between Mr. Rosenberg and the firm," says co-CEO Stanley Blend, adding that the move was not a way to phase the name partner out. The recent revelation of Rosenberg's status at the firm comes one year after the firm's best recognized name partner, Southwest Airline chief executive officer Herb Kelleher, formally resigned. Kelleher already had been on a leave of absence from the firm since 1981 when he took the job at Southwest Airlines. Kelleher's name also continues to be part of the firm's title. Partners say the changes at the firm are part of a move to let the younger partners manage the business and maintain the firm's competitiveness in the marketplace. Oppenheimer, Rosenberg was a big player in the real estate market before it went bust and has since tried to diversify its firm. The 40-lawyer firm is now managed by co-chief executive officers Stanley Blend and Reese Harrison. Firm founder Jesse Oppenheimer, while still active PAGE 13 San Antonio Business Journal 1991 UMI/Data Courier in the practice of law, says his role in the firm has diminished. "I'm out of administration. They kicked me upstairs. Next they kick me out of the office," he jokes. But Oppenheimer, who started the firm as a spinoff of Lang, Byrd, Cross, Ladon & Oppenheimer, says leaving the firm's management to younger staff frees the older partners to drum up business for the firm and practice law for long-time clients. What's more, the younger management is able to focus on building the shareholder and partner group -- like William Sessions Jr., son of FBI director William Sessions and a civil litigator in federal court -- who recently was elected as one of the firm's 17 partners and shareholders. "We're growing. We're very pleased," Oppenheimer says, adding that besides the tax and estate planning work and litigation, the firm added Ben Perry about 1-1/2 years ago for oil and gas law. Also, an environmental law section is being contemplated. But the firm's business interests is not the only reason Rosenberg was relegated to an of counsel position. His tangle of business interests and sevcral ill-fated ventures had put him in a precarious position at the firm. Last September, two Rosenberg ventures filed for Chapter 11 reorganization in U.S. Bankruptcy Court. MRD Joint Venture, in which Rosenberg, was a partner, had estimated assets and liabilities in excess of $ 1 million. And Culebra/1686 Ltd., a venture in which Rosenberg is general partner, was valued at about $ 2.5 million. In addition, last February, a $ 5.5 million property owned by Rosenberg was posted for foreclosure. The Danbury Square Apartments was foreclosed on in March by the lender on the property, Dallas thrift Sunbelt Savings. Besides Rosenberg, the principals in the partnership that owned that property, Kan-Mart Inc., are Oppenheimer, Rosenberg partner Kenneth Gindy and Raymond Schneider, a former member of the firm. In May, another of Rosenberg's investments went sour when River City Fair Inc., a development built on the ashes of the old Turtle Creek Country Club, filed for Chapter 11 reorganization less than a year after opening. Indeed, many of Rosenberg's business ventures keep him preoccupied. After a difficult few months, Rosenberg took his Express Cash International Corp. public in late December, with a 600,000 share offering for the pawnshop chain at $ 6 per share. The offering came just four months after two original partners of Express Cash, David Saks and Doyle Spruill, were indicted for alleged savings and loan fraud. The two, who resigned as directors of Express Cash in November 1989, have subsequently been convicted and sentenced. Law firm founder Oppenheimer says Rosenberg's involvement in a public corporation could create potential liabilities for the firm. "When you are in public businesses it creates conflicts," says Oppenheimer, adding that it is not uncommon in firms to remove the shareholder status of a partner with strong outside business interests. PAGE 14 San Antonio Business Journal 1991 UMI/Data Courier "When there is no interest in the profits, there is no liability or conflict" for the person's actions outside the firm, Oppenheimer says, adding that "it takes the liability away from the firm, but it also takes the firm's liability and losses away, so it works both ways." The firm acts as general counsel to Express Cash and has been paid more than $ 63,000 in fees since the company's inception, accordihg to a prospectus filed with the Securities and Exchange Commission. Express Cash seems to have begun a recovery from a $ 631,979 loss on $ 2.86 million in revenues in 1989. Recently the underwriter of the initial public offering exercised its option on 90,000 additional shares to cover over-allotments bringing in more than $ 4 million in capital for the company. Also, the company recently announced the opening of a new shop in San Antonio and one in Houston. Further plans include a commitment to at least two more in Houston and eventually the company plans to have 14 stores, double that it had before the NASDAQ offering. Meanwhile, despite the name partner shakeout, Oppenheimer, Rosenberg, continues to grow with a burgeoning 14-lawyer litigation staff and an eight-lawyer tax law and estate planning section. The real estate group, on the other hand, has shrunk from about eight attorneys to five and Oppenheimer admits that although they still have a good bit of real estate work, especially in relation to litigation, it is no longer a "huge part" of the firm as it once was. Oppenheimer, Rosenberg was named in a 1987 reference publication, "The Best Lawyers in America," as having some of the top lawyers in the country in their specialties. Included were J. David Oppenheimer for corporate law, name partner Seagal V. Wheatley and co-CEO Reese Harrison Jr. for business litigation, Stanley Blend and Richard Weinstein for tax and employee benefits law, Rosenberg and Kenneth Gindy for real estate law, Taylor Boone and Jesse Oppenheimer for trusts and estates and John H. Tate II for bankruptcy. The 40-lawyer Oppenheimer, Rosenberg made a name for itself in the practice of real estate law before the bottom fell out in the 1980s. At the forefront of that success in the 1970s and early last decade was name partner Rosenberg, the protege of firm founder Jesse Oppenheimer. GRAPHIC: Personal portrait SUBJECT: Law firms; Partnerships; Resignations; Southwest NAME: Stanley Rosenberg GEOGRAPHIC: Southwest Region; San Antonio; TX; US COMPANY: Oppenheimer Rosenberg Kelleher & Wheatley Inc; SIC: 8951 PAGE 15