Charter Company

The Charter Company

Company type	Public
Industry	Conglomerate (Oil refining, insurance, communications)
Founded	1949
Founder	Raymond Knight Mason
Defunct	1999
Fate	Acquired and rebranded as Spelling Entertainment Group Inc.
Headquarters	Jacksonville, Florida , United States
Key people	Raymond Knight Mason (Founder), Jack T. Donnell (Former President and COO), Zeke Zechella (President)
Products	Oil refining, insurance services, communications, publishing

The Charter Company, based in Jacksonville, Florida, was a diversified conglomerate encompassing more than 180 subsidiaries. It appeared on the Fortune 500 list for eleven consecutive years beginning in 1974, achieving a peak ranking of 61st in 1984. The company sought bankruptcy protection toward the end of 1984, ultimately divesting all its business units and acquiring Spelling Entertainment Inc. to establish Spelling Entertainment Group Inc in 1992.

History

Established in Jacksonville in 1949 by Raymond Knight Mason, a local entrepreneur, The Charter Company evolved from the Mason Lumber Company, which had been founded in 1919. Mason received guidance from Edward Ball, a prominent Florida businessman who managed the assets of the Alfred I. duPont Testamentary Trust for many years.

Initially, Charter operated Florida-based mortgage, banking, and land development enterprises, with its headquarters located in the Universal-Marion Building at 21 West Church Street. The company expanded its operations in 1968 by acquiring a network of 60 gas stations.

In 1970, Charter acquired a petroleum business from the Signal Companies for $70 million. This acquisition included a refinery in Houston that required modernization, gas stations throughout the Southeast, and tanker transportation agreements. The company leveraged this position during the 1973 oil crisis four years later.

That same year, Charter took over the Florida National Bank Group after regulatory reforms compelled the du Pont Trust to divest its banking holdings. Additionally, Charter owned an 8.4% interest in the St. Joe Paper Company, which itself held a 22% stake in Charter; both companies exchanged shares in 1972 with plans to merge.

Senator Joseph Tydings, who had invested $2 million since 1964, was once the largest external shareholder of Charter. A Life article from 1970 speculated on possible influence by Tydings; however, no legal wrongdoing was ever established.

Charter broadened its media interests by acquiring Redbook magazine from Norton Simon Inc. in 1975 and purchasing Downe Communications—publisher of Ladies' Home Journal—in 1978. Downe Communications had previously acquired Bartell Publications, known for magazines such as Sport.

In 1979, the company relocated its corporate headquarters to the Universal-Marion building (later renamed JEA Tower).

During the late 1970s, Charter disclosed conversations involving two oil executives and fugitive financier Robert Vesco, who was connected to investigations involving President Carter’s brother and Libya.

Also in 1979, Charter acquired Carey Energy Corporation—possessing assets valued at $550 million—for $4 million in cash along with $16 million in convertible preferred stock and a consulting agreement with Edward M. Carey at $200,000 annually. Carey Energy’s principal holdings included a Bahamas refinery (65% ownership) and New England Petroleum Company, a fuel distributor along the Atlantic coast.

In 1980, Charter purchased Commonwealth Oil Refining Company’s refinery located in Puerto Rico for $650 million; this facility processed crude oil daily. The company also planned to build an Alaskan refinery capable of processing daily volumes of North Slope crude allocated to them.

Operations

The organization operated through three primary divisions: oil refining, insurance services, and communications.

Year	Revenue	Net earnings	Earnings per share
1973	$481,900,000	$20,500,000	$4.61
1974	$1,170,000,000	$40,300,000	$10.71
1975	$1,046,200,000	$5,400,000	$.19
1976	$1,190,900,000	$16,900,000	$.81
1977	$1,481,600,000	$20,000,000	$1.00
1978	$2,046,300,000	$23,300,000	$1.17
1979	$4,296,400,000	$365,300,000	$14.83
1980	$4,421,100,000	$50,200,000	$1.59
1981	$4,966,200,000	$7,700,000	$.06
1982	$4,017,200,000	$35,300,000	$1.04
1983	$5,656,800,000	$61,700,000	$2.35
1984	($29,800,000)	($71,100,000)	$0
1985	$1,559,700,000	$1,300,000	$0
1986	$1,136,300,000	$153,200,000	$3.23
1987	$1,042,600,000	$46,900,000	$.98
1988	$479,600,000	$58,600,000	$1.22
1989	$665,100,000	$5,300,000	$.10

Raymond Knight Mason

Mason was recognized for his unconventional behavior yet admired for his distinctive approach to leadership. Among his notable real estate holdings were two prominent estates obtained via his partner Ed Ball: Epping Forest in Jacksonville, formerly owned by Alfred I. du Pont and Jessie Ball du Pont, and Ballynahinch Castle located in County Galway, Ireland.

Performance

In 1981, the company generated close to $5 billion in revenue but posted a modest earnings per share of only $0.06, primarily due to the downturn in oil prices caused by the surplus supply. With Jack Donnell assuming leadership that year, Charter refocused its operations by divesting from communications and publishing sectors to concentrate on its primary business units. By 1983, net income had risen to $53.89 million, equating to $2.01 per share. Nevertheless, 1984 saw a substantial net loss of $749.34 million, largely driven by costs related to discontinued operations and bankruptcy proceedings.

Trouble

The early part of the 1980s experienced a steep drop in profitability that deteriorated further as time passed.

Helicopter crash

On July 29, 1982, a helicopter accident in Ireland tragically resulted in the deaths of four top executives: President and COO Jack T. Donnell, along with three key Charter Oil officers—Dudley K. Parker (president), Barry L. Green (executive vice president), and Jay L. Lammons (senior vice president). In the wake of this loss, Zeke Zechella was appointed president to guide the company through its ensuing difficulties.

Toxic waste lawsuit

On December 16, 1983, Charter Oil Company of Jacksonville—operating under The Charter Company’s trade name—was among four defendants named in a lawsuit demanding over $1.8 billion in damages. Independent Petrochemical Corporation (IPC), a fully owned subsidiary of Charter Oil, had contracted with Northeastern Pharmaceutical & Chemical Company (NEPACCO) for the disposal of dioxin, a cancer-causing residue from hexachlorophene manufacturing. IPC subcontracted waste handler Russell Bliss, who improperly combined dioxin with used motor oil and sprayed it on Missouri dirt roads as a dust control measure over a period exceeding two months.

This improper handling prompted legal actions from federal authorities, the state of Missouri, and more than 1,600 private claimants seeking $4 billion in compensatory and punitive damages. IPC resolved all claims by settling, including paying over $100 million for federal cleanup efforts at affected sites in Missouri.

Bankruptcy

Edward M. Carey’s sale of Carey Energy Corporation to Charter in 1979 came with his metaphor: "Being in the oil business is like holding onto a bear’s tail—you must keep feeding it." His company had difficulty securing crude supplies for its refinery operations. By 1984, collapsing oil prices coupled with restricted trade credit pushed Charter into Chapter 11 bankruptcy protection.

On April 20, 1984, Charter along with 43 related subsidiaries—including IPC—filed for Chapter 11 status. The company reduced its Jacksonville office workforce by nearly half (around 200 employees) and similarly cut staff in Houston while shutting down offices located in the Universal-Marion building. Chairman Raymond Mason sold Epping Forest to Herb Peyton and stepped down; President Zeke Zechella retired the following year.

Before emerging from bankruptcy in 1987, most subsidiaries were divested. Creditors received stock amounting to a 50.5% ownership stake; control was acquired by Carl Lindner Jr. through bankruptcy court proceedings. Notably uncommon for bankruptcy cases, shareholders retained a significant portion of equity value—a fact highlighted by attorney Stephen Busey.

A prolonged conclusion

Following Charter's bankruptcy resolution in 1988, American Financial Corporation, led by Carl Lindner and holding a 53% ownership in Charter, shifted the company’s headquarters from Jacksonville to Cincinnati, Ohio.

In early 1992, Charter divested its remaining oil assets through a management buyout, maintaining an 82% ownership in Spelling Entertainment, which it had acquired on April 6, 1991. Known for producing numerous acclaimed drama series, Spelling was a television production firm. On March 31, 1992, Charter and Spelling consented to a merger. Subsequently, on October 5, 1992, Charter rebranded as Spelling Entertainment Group, Inc., and its NYSE ticker symbol changed from "CHR" to "SP". The following year, Blockbuster Entertainment gained controlling interest in Spelling. In 1994, Viacom acquired Blockbuster’s shares and completed the purchase of the remaining equity in 1999, fully absorbing the last segment of Charter Company into its corporate framework.

It is important to note that the present-day American cable company Charter Communications has no connection to the original Charter Company.