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History of Resource America

History of Resource America

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Published by thefactorbook

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Published by: thefactorbook on Oct 07, 2010
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10/13/2010

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“…Energy is not the business of Resource America. Neither is real estate. Our true business is providinginvestment opportunities for the individual investor.”
-Edward E. Cohen, 2001
thefactorbook.blogspot.com
 
History of Resource America
Founded in 1966 as SMTR Corp., an oil and natural gas company. Changed its nameto Resource Exploration, Inc. in 1970. Initially focused on drilling in Ohio andPennsylvania, but was operated out of Shreveport, Louisiana by oilman J.C. Trahan.
In 1977, the company fell into distress and was taken over by Willard E. White, anOhio oilman who also served as Vice President of Atlas Energy Co. of suburbanPittsburh, Pennslvania.
thefactorbook.blogspot.com
 
Acquired as a penny stock in 1988 by current Chairman Edward Cohen and a groupof investors, including Jack Dorrance, patriarch of the Campbell’s Soup dynasty. Thegroup acquired a one-third stake in the company for $5.6 million.
Cohen saw tax-shelter benefits and undervalued assets; became Chairman andCEO, and renamed the company Resource America, Inc. in 1989.
 
An Opportunistic Investment Vehicle
According to current CEO Jonathan Z. Cohen, Resource America specializes inseizing “opportunities that are relevant to the time.”
Instead of reinvesting in the energy business in the early 1990s, Edward Cohen ran-off Resource America’s existing reserves, earning roughly $10 million in three years.He then began allocating capital to higher return investments: 
thefactorbook.blogspot.com
cqure sresse commerca rea esae oans w a ace vaue o . onfollowing the S&L crisis; earned roughly 35% annualized yields for the rest of thedecade. Capitalized on Japan’s economic slump in the late ’90s as distressedJapanese banks liquidated their U.S. holdings in leasing and real estate.
In 1995, acquired FML Leasehold for $1.4 million from Fidelity Mutual Life InsuranceCo. Built into Fidelity Leasing and sold to ABN AMRO Bank for $583 million in 2000.After-tax net proceeds to Resource America: $112 million.

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