After a fatal shooting, a $1.5 billion jury award, bankruptcy and a festering family feud, the two brothers who run U-Haul International say the nation's largest truck rental company is poised for a comeback.
Mark and Joe Shoen, who have avoided interviews in the eight years since they wrested control of the company from their father, made a rare public appearance Wednesday before 400 business leaders.With the resolution of a massive family lawsuit against them awaiting a judge's approval, the brothers said it was time to focus on U-Haul's growth.
"We want people to know it's OK to work for U-Haul," Joe Shoen, chairman of the rental company's corporate parent, Amerco Inc., said in response to reporters' questions at a "power breakfast" sponsored by the Greater Phoenix Economic Council.
Amerco, based in Reno, Nev., earned $60 million in the fiscal year ended in April, up from $2.2 million when the brothers took over in 1987. Revenue rose 9.3 percent in the past year to $1.2 billion.
Joe and Mark Shoen rescued Amerco when they took it over in 1986 at a time when the company was losing focus in the self-move industry, said Thomas Kmiotek, an assistant vice president at Duff & Phelps in Chicago.
Settling the bankruptcy case will give the company's directors the ability to concentrate on the future, he said.
"They have some assets on their balance sheet which normally they might have otherwise sold," Kmiotek said. "They're really well-set to move forward once the settlement gets approved."
In trading Wednesday on the Nasdaq Stock Market, Amerco rose 2.5 percent, or by 50 cents, to $20.25 a share.
The drama surrounding Phoenix-based U-Haul began in 1986 when the Shoen brothers took control of the company and forced their father, Leonard, into early retirement. The move split the family into warring factions.
The father wanted the company to diversify into the general rentals business while the sons insisted on focusing on its core moving business.
The story moved from the business pages to tabloid TV in 1990, when Eva Berg Shoen, the wife of another Shoen son, Sam, was shot to death at the family's cabin in posh Telluride, Colo.
At the time, Leonard Shoen made statements to reporters linking Joe and Mark to the killing, accusations that later became the focus of a libel lawsuit. In November 1994, a New Mexico man was sentenced to 24 years in prison for shooting Eva Shoen in a botched robbery.
A federal jury in April denied damages to Mark and Joe Shoen, who claimed their father had libeled them. The decision is beingappealed.
Leonard Shoen's accusation was what really blew open the gap between father and sons, Mark Shoen said Wednesday.
"Even the parents of (serial killer) Jeffrey Dahmer maintained their son's innocence," he said softly, his face turning bright red.
The brothers said they no longer have any contact with their father, who founded the company in 1945.
"He has a new vocation," Joe Shoen said of his 79-year-old father. "And that is to destroy what he created in the first half of his life."
Gil Shaw, a Phoenix attorney who represented Leonard Shoen in the takeover case, called the brother's claims "outrageous."
"Leonard Shoen had the company poised to expand and to become incredibly diversified." Shaw said.
Shaw said Amerco's turnaround is not a result of a change in strategy for U-Haul, the company's largest division. He attributed the earnings growth to the sale of property and a profitable insurance division.
The family battle culminated in October 1994 when a Maricopa County Superior Court jury ordered the faction led by Joe and Mark Shoen to pay $1.48 billion to the "outsiders" that include Leonard Shoen and the remaining siblings.
A judge later lowered that award to $461 million. Claiming they could not shoulder the judgment, directors of Amerco filed as individuals for bankruptcy court protection from creditors in February. The brothers say the reorganization plan, which provides for meeting the judgment, should be approved within the month.
Mark, Joe and their younger brother, Jim, are the only children who work for Amerco. Nearly all the other children will split up the bankruptcy settlement money with their father. Under the jury award, the other siblings must sell their 47.2 percent stake in the company.