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FINE CARPETS • SINCE 1964 • FINE RUGS

1/26
2001

14

4066 West Maple Road • Bloomfield Hills, Michigan 48301 • 248.647 5250

Hours: Mon.–Wed. and H. 10-5:30 • Thurs. 10-8:30 • Sat. 10-5

Claims Disputed

David Handleman stepped down on his own
accord, company leader says.

ALAN ABRAMS

Special to the Jewish. News

A

llegations by the grandson
of the founder of the Troy-
based Handleman
Company that his uncle,
David Handleman, was ousted from
power last week are being disputed by
the company's new board chairman.
Stephen Strome told the Jewish News
that "clearly, it was David's decision to
step down as chairman when he turned
85." The company is the world's largest
distributor of music tapes and compact
discs, and also distributes home videos.
Strome, president and chief execu-
tive officer since 1991, was elected
Handleman's successor. Both live in
Bloomfield Hills.
Handleman, also well known as a
philanthropist, had been serving as
non-executive board chairman; he wa s
elected chairman emeritus on Jan. 16.
The following day, Philip
Handleman, president of Birmingham-
based Handleman Filmworks, which is
unaffiliated with the Handleman
Company, issued an unusual press
release. It stated: "While David
Handleman's ouster from a position of
authority comes none too soon, it rep-
resents just one component of a more
comprehensive set of reforms needed
to restore the company's luster.
Added Philip Handleman, a
Birmingham resident: "Unfortunately,
the executives installed by my uncle,
who are largely responsible for the
abysmal [company] track record of the
last decade, have been elevated as a
result of my uncle's leaving. It is unac-
ceptable and contrary to common sense
for mismanagement to be rewarded for
substandard performance."
Philip Handleman said he had told
the board "his uncle was using his
name and position to perpetuate a
fiefdom chat rewards him and a hand-
picked clique in disi-egard for the com-
pany's status as a public corporation
accountable to its shareholders."
The company's stc-k is traded on
the New York Stock Exchange under
the symbol HDL. Philip Handleman's
grandfather, also named Philip, co-
'founded the company in 1934. Philip
is the son of the late Paul Handleman.
Strome said Philip Handleman, who
does not play an active role in the

"

company, actually has "a limited num-
ber of shares in his name — less than
one percent." Strome acknowledged it
is possible that Handleman could own
additional shares purchased under the
names of brokerages.
Strome said the board wanted to
recognize David Handleman's "many
years of service and his contributions
to the company and the industry —
he has been with the company since
the early 1940s. He played an impor-
tant role in starting us in the music
business in 1953-55. And in order to
demonstrate our appreciation, he was
elevated to chairman emeritus."
David Handleman was away from
the office this week and could not be
reached for comment.
Strome stressed that the directors of
Handleman Company function as "an
independent board by any definition,"
including those guidelines set forth by
the SEC.
He also disputed Philip Handleman's
allegations about the financial health of
the company, saying that both sales
and profits have steadily increased.
"We have just had our second best
year in the company's history," said
Strome. "Our balance sheet ... speaks
for itself," he added.
Strome said that contrary to Philip
Handleman's allegations, the company
announced the terms of their strategic
plan last November.
"These are the facts. The emotional
issues are a different story," said Strome.
Well known within the Jewish corn-
munity for his many philanthropies,
Handleman and his late wife Marion
are benefactors of: Marion and David
Handleman Hall and Auditorium at
the Jewish Community Center in West
Bloomfield, Handleman Hall at Temple
Beth El in Bloomfield Township, the
Jewish National Fund's Marion and
David Handleman Park in Israel, the
Marion and David Handleman
Scholarship Fund at Oakland University's
Meadow Brook Art Gallery, the Detroit
Institute of Arts' Marion and David
Handleman Gallery of Contemporary
Art and the Detroit Symphony
Orchestra's Marion and David
Handleman Scholarship and Capital
Fund. In addition, the Handlemans have
a rich legacy of supporting the Jewish
Federation of Metropolitan. Detroit
and its Annual Campaign. 7:

