American Guaranty Corporation records

American Guaranty Corporation (AGC) was a small company founded in Providence, Rhode Island in 1920 by Dominic J. Perri. AGC started as a sales financing company that advanced loans to commercial firms to finance terms of sales to their customers. In 1959 the company began equipment leasing, eventually becoming a pioneer in that market with offices in New York and California.

AGC filed for Chapter 11 bankruptcy in 1963 and formed the subsidiary American Guaranty Company in 1966. American Guaranty Company was able to conduct continue its leasing operations and secured a $500,000 loan while AGC, its parent company, was under bankruptcy restrictions. AGC was able exit bankruptcy on June 29, 1967. AGC then absorbed American Guaranty Company, assuming its assets, leases, and liabilities. AGC’s Chapter 11 filing was, at the time, the largest in New England and one of the largest in the country.

AGC began an acquisition program in 1967 to increase profitability, acquiring the companies Science & Engineering Institute, Inc. of Waltham, Mass. and Fred R. Holden, Inc. of Barre, Vt. In 1977 the SEC charged Howard N. Feist, AGC’s majority stockholder, with failure to disclose to the other stockholders information about transactions between AGC and other companies that Feist controlled or owned: Shepard Company, Mayflower Inn, Inc., Denholm & McKay Company, and Waltham-Hampden, Inc. The bankruptcy of Shepard Company and Denholm & McKay, combined with lease rental losses of the other companies caused AGC to sustain a $1 million loss. Feist, who owned 80% of AGC’s common stock and 58% of the preferred stock, was removed as a director and did not receive dividends on his stock for three years.

Stockholders approved a reorganization plan in 1980 that converted their preferred and common stock into solely common stock of a new company, Newco American Guaranty Corporation. This reorganization eliminated $568,050 in unpaid preferred stock dividends that resulted from AGC’s earlier bankruptcy. After the reorganization, Newco American Guaranty Corporation changed its name back to American Guaranty Corporation.

AGC transformed from a publicly owned company to a privately owned company in 1982, when its stockholders approved a reverse stock split that made Paul R. Judy, a Chicago investment banking executive who had acquired 54.3% of AGC’s shares from Howard N. Feist, the sole owner of the company.