SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported) July 28, 1997
THE INTERGROUP CORPORATION
DELAWARE 1-10324 13-3293645
(State or other (Commission File No.) (IRS Employer I.D. No.)
jurisdiction of
incorporation)
2121 Avenue of the Stars, Suite 2020, Los Angeles, Calif. 90067
(Address of principal executive offices)
Registrant's telephone number: (310) 556-1999
<PAGE>
Item 6. Resignation of Registrant's Directors
On July 3, 1997, following receipt of serious criticism of his
job performance by the registrant's Chairman Chief Executive
Officer and President, John V. Winfield, Howard A. Jaffe, who was
at that time General Counsel, an officer and director of the
registrant, sent a letter to registrant's Board of Directors
which purported to detail certain alleged improprieties
pertaining to Mr. Winfield and certain other personnel of
registrant and which made certain demands on registrant. On July
10, 1997, registrant's counsel responded to such letter asking
Mr. Jaffe to specify such alleged improprieties and to explain
how they could have occurred while Mr. Jaffe was serving as
registrant's Chief Operating Officer and General Counsel and why
he had not raised them earlier. On July 17, 1997 Mr. Jaffe
responded to such letter and made further allegations of
improprieties. On July 24, 1997, Mr. Jaffe tendered his
resignation as an officer of the registrant.
On July 25, 1997, the Board of Directors of registrant (with Mr.
Jaffe not in attendance) authorized its Audit and Finance
Committee and Administrative and Compensation Committee
(comprised of the registrant's directors other than Messrs.
Winfield and Jaffe) (collectively the "Committee") to conduct a
thorough independent investigation of Mr. Jaffe's allegations and
Mr. Jaffe's job performance.
On July 28, 1997, after being informed of the Board's action, Mr.
Jaffe tendered his resignation as a director of registrant. On
July 29, 1997, Mr. Jaffe advised the Board that all of the issues
he wished to raise were set forth in his prior correspondence.
The registrant believes that Mr. Jaffe is a disgruntled former
employee of the registrant who has made demands for substantial
payments from the registrant and that Mr. Jaffe's allegations of
improprieties are without merit.
The Committee has commenced its investigation and on completion
will report its conclusions to the Board of Directors.
<PAGE>
Item 7. Exhibits
17.1 Memorandum dated July 3, 1997 from Howard Jaffe to the Board
of Directors of registrant.
17.2 Letter dated July 10, 1997 from Patricia L. Glaser to Howard
Jaffe.
17.3 Letter dated July 17, 1997 from Howard Jaffe to Patricia L.
Glaser.
17.4 Letter dated July 24, 1997 from Howard Jaffe to the Board of
Directors of registrant.
17.5 Letter dated July 24, 1997 from Howard Jaffe to the Board of
Directors of registrant.
17.6 Memorandum dated July 28, 1997 from Howard Jaffe to
registrant.
17.7 Memorandum dated July 29, 1997 from Howard Jaffe to
registrant.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
THE INTERGROUP CORPORATION
Date: August 4, 1997
/s/ John V. Winfield
John V. Winfield
Chairman, Chief Executive
Officer and President
<PAGE>
EXHIBIT INDEX
Exhibit Page
17.1 Memorandum dated July 3, 1997 from
Howard Jaffe to the Board of
Directors of registrant E-1
17.2 Letter dated July 10, 1997 from
Patricia L. Glaser to Howard Jaffe E-5
17.3 Letter dated July 17, 1997 from
Howard Jaffe to Patricia L. Glaser E-7
17.4 Letter dated July 24, 1997 from
Howard Jaffe to the Board of
Directors of registrant E-15
17.5 Letter dated July 24, 1997 from
Howard Jaffe to the Board of
Directors of registrant E-16
17.6 Memorandum dated July 28, 1997 from
Howard Jaffe to registrant E-17
17.7 Memorandum dated July 29, 1997 from
Howard Jaffe to registrant E-18
<PAGE>
E-1
Howard A. Jaffe
2131 Century Park Lane #315
Los Angeles, California 90067
(310) 277-2052
To: Members of the Board of Directors of the InterGroup Corporation
From: Howard A. Jaffe
Date: July 3, 1997
John V. Winfield has purported to terminate me today as Chief
Operating Officer of InterGroup. He had me removed by the
security services of our office building because I refused to
adhere to his directive not to communicate with you except under
specified parameters or accept the termination. His reasons for
doing the above are so that I can no longer be in a position to
disclose his actions which are detrimental to you and to our
shareholders. They include providing a no show job for his
sister at company expense, maintaining and charging a housekeeper
at company expense, trading for his own account and that of his
father, sister and others at company expense, usurping both
profit and personnel of the company belonging to shareholders for
his personal use, depriving shareholders of substantial profit
through improper trading and other actions, incurring large
travel and entertainment expenses for personal use and having the
company carry and/or expense it at shareholder cost, improper SEC
reporting and directing company employees to do illegal acts. He
has also lied to me, and I believe others, about compensation
packages and criteria, dealt with third parties in dishonorable
and dishonest ways harming InterGroup's reputation and resulting
in threatened or actual third party litigation against InterGroup
and concomitant expense for defense. His personal conduct toward
the company's employees is rude and demeaning and has cost the
company the loss of competent personnel. In short, John V.
Winfield is using InterGroup and its personnel as his personal
property.
<PAGE>
E-2
The following steps should be taken immediately:
1. Our accountants should be commissioned and directed to
examine and company John V. Winfield's trading for himself,
family members, and friends with his trading for InterGroup.
Allocations of new securities issues should also be examined.
Such records should be reviewed with independent outside SEC
counsel to determine the amount of reimbursement Winfield and his
family members should make to the company. His actions, I
believe, have apparently been going at least five years and
probably longer.
2. David Gonzalez should be removed and replaced at once as the
company's controller because he also serves as John Valenta
Winfield's personal accountant, Tamar Valenta's personal
accountant and Frank Valenta's personal accountant. In such
capacities, Mr. Gonzalez has had to be aware of Mr. Winfield's
securities activities, and those of his family, as well as other
misappropriations of corporate assets.
3. Mr. John V. Winfield should be requested to take a leave of
absence from the company while the matters I have enumerated are
investigated by our outside accountants and special SEC counsel.
A committee of the remaining directors should be entrusted to
vote his shares, and those of his family members while the full
extent of his defalcations are determined.
4. Should Mr. John V. Winfield decline to step aside and allow
the investigation to be made in a fair fashion, I believe the
board has no alternative but to institute legal action against
Mr. John V. Winfield and members of his family in the name of the
corporation, and make appropriate disclosures to both the SEC and
IRS.
Mr. John V. Winfield, I have reason to believe, is following
similar practices with regard to his securities trading and
conduct at Portsmouth Square, Inc. and Santa Fe Financial, which
<PAGE>
E-3
could result in liability to InterGroup and its Board of
Directors for placing him in a position to do so in such
companies. Several of you are exposed to liability for any
improper actions of his in such companies in your capacities as
directors of such entities.
Enclosed is a copy of Mr. John V. Winfield's July 3, 1997,
memorandum to me, as well as a copy of a letter that demonstrates
his face to the world. Mr. John V. Winfield's allegations in
such memo, that I am not the Chief Operating Officer of
InterGroup since I was not elected as such for the past fiscal
year, is absurd. Officers continue to serve until their
successors are elected and qualify. His claim as to my
performance in the two cases mentioned in his memo are without
foundation and a product of his effort to lay a record to
discredit me and serve as a basis for future termination.
Needless to say, my compensation should be continued while the
accountants and outside counsel confirm what I have charged to be
essentially true.
I will be pleased to discuss the issues raised in this letter, as
well as any other issue that you may desire to speak to me about
in greater detail. I can be reached at (310) 277-2052 until
further notice because, based on past allegations made by third
parties against John V. Winfield and my own personal
observations, I am concerned for my safety in the corporate
offices.
Very truly yours,
Howard A. Jaffe
<PAGE>
E-4
InterGroup
Corporation
Memorandum
Date: July 3, 1997
To: Howard A. Jaffe
From: John V. Winfield
Re:
As of the beginning of Intergroup's new fiscal year, please be
apprised of the following:
1. Other than addressing the Board orally or in writing at its
request, no executive officer, other than the President, shall
communicate directly with the Board.
2. As you know, the Board did not elect you as the Chief
Operating Officer for either the past fiscal year or the coming
fiscal year. Accordingly, you are not the Chief Operating
Officer of InterGroup and you should not refer to yourself as
such. You have been and continue to be general counsel of
Intergroup and you should refer to yourself in this capacity.
3. Furthermore, you are aware of my great disappointment with
your performance in connection with the collection of monies owed
to InterGroup by Aura and the real estate purchase in Houston
which was of major strategic importance to InterGroup. You were
specifically told to have it close before June 30, 1997, and, of
course, such closure has yet to occur because of purported
environmental problems which as a result of my diligence proved
to be non-existent.
Howard, you know of other issues and concerns I have expressed to
you in the past and if you wish to discuss them further, please
see me.
<PAGE>
E-5
July 10, 1997
BY HAND DELIVERY AND U.S. MAIL
Howard A. Jaffe, Esq.
2131 Century Park Lane #315
Los Angeles, California 90067
Re: Intergroup Corporation
Dear Mr. Jaffe:
This office represents InterGroup Corporation. Please address
all further correspondence regarding Intergroup to my attention.
We have received and reviewed your letter to InterGroup's Board
of Directors dated July 3, 1997. This letter contains some
serious accusations of wrongdoing on the corporation's part,
including improper SEC reporting. It also accuses Mr. John
Winfield of major improprieties, such as usurpation of corporate
opportunities and misappropriation of corporate funds.
Curiously, however, none of these accusations is spelled out with
any specificity.
Having made such serious charges, you must be prepared to back
them up. You must explain exactly what improper SEC reporting
has taken place and what improprieties have occurred. When you
make this explanation, you will, of course, want to explain how
this improper reporting and these improprieties could have
occurred while you were InterGroup's Chief Operating Officer,
General Counsel, and a member of its board, that is, while you
were supposed to be advising the company about its legal rights
and responsibilities and making sure that the company operated
according to the law. Or, failing that, you will want to explain
why you have not raised these concerns until now, despite having
had every opportunity to communicate them to other members of the
board, both at regular meetings and at any other time.
<PAGE>
E-6
As you are a member of the California and New York bars, you will
naturally recognize the liability you have created for yourself
by libeling Mr. Winfield to the board. If this letter is
published further, Mr. Winfield's damages will multiply
exponentially. More to the point, if his ability to operate in
the securities market is impaired because of your unfounded and
malicious charges, InterGroup's ability to operate is likewise
impaired, and the corporation will also be damaged. Given the
scale of the corporation's trading, I am sure that you will
appreciate the seriousness of the predicament in which any
further dissemination of this letter will place you.
Moreover, as a member of the bar, you will no doubt recognize the
peculiar position you occupy when you urge the board to sue Mr.
Winfield, for whom you have done a great deal of personal legal
work. You appear to have breached your duties as a lawyer both
to the corporation -- by condoning and even participating in the
improprieties you allude to in your letter -- and to Mr. Winfield
as his personal attorney.
I expect to receive a full and detailed account of the
accusations made in your July 3, 1997, letter by close of
business on July 18, 1997. If no such account is forthcoming, we
will assume that you have nothing with which to substantiate the
charges. In any event, we will proceed to exercise the
corporation's rights. We will be addressing your employment
situation in the immediate future.
Nothing herein should be interpreted as a waiver of our client's
rights, all of which are hereby expressly reserved.
I look forward to your prompt response.
Very truly yours,
PATRICIA L. GLASER
<PAGE>
E-7
Howard A. Jaffe, Esq.
2131 Century Park Lane #315
Los Angeles, CA 90067
(310) 277-2052
July 17, 1997
Certified Mail -- R.R.R.
Patricia L. Glaser, Esq.
Christensen, White, Miller,
Fink, Jacobs, Glaser & Shapiro
2121 Avenue of the Stars
18th Floor
Los Angeles, CA 90067
Re: InterGroup And Your Letter of July 10, 1997
Dear Ms. Glaser:
By letter dated July 3, 1997, I wrote to the Board of Directors
of the InterGroup Corporation ("InterGroup") expressing my
concerns with respect to the conduct of John V. Winfield. In
that letter I reported how I had been forcibly removed in
retaliation for my complaints about Winfield's historic and
ongoing breaches of fiduciary duty.
In response to that letter, l have received yours of July 10,
1997. In your response you request details from me with respect
to the improprieties. However, the majority and, indeed the
thrust, of your letter is clearly directed at silencing me and
threatening me. Please understand that I am beyond being silenced
and I will not be threatened. Your tactics may work with others.
But they will not work with me.
By this letter I am going to go into some detail with respect to
my charges. The information contained in this letter is
supported by both third party witnesses and documents. I have
<PAGE>
E-8
those documents in my possession. Because you have taken upon
yourself the mantel of outside corporate counsel I am requesting
that you provide our exchange of correspondence to the Securities
& Exchange Commission and to NASDAQ. You also have, I believe, a
duty to inform InterGroup's independent outside certified public
accountants of my charges and your response so that an audit can
be made to substantiate my charges and ascertain what further
corporate opportunities were taken by Winfield and family for the
fiscal year ended June 30, 1997 and prior years not covered in my
examination.
Mr. Winfield has utilized corporate personnel, corporate space,
corporate equipment (leased and owned) and corporate time to
trade securities for himself, his father, and his sister in such
a manner as to enrich himself and his family at corporate
expense. He has among other things, front run the corporation in
securities trades, taken preferential allocations of prime
securities at corporate expense, obtained new issues personally
or for his family, which were corporate opportunities. For the
five year period ended June 30, 1996 a comparison between the
return earned by Intergroup and Mr. Winfield and his family show
an approximately fourteen million dollar difference in both
realized and unrealized gain favoring Mr. Winfield and family in
spite of the fact that Winfield and family began the trading
period with substantially less funds than Intergroup. Your
attention is directed to Exhibit A which summarizes such trading
and was extracted from the trading records for such accounts,
some 15 thousand trades in all.
Evidencing my charge that Mr. Winfield has appropriated
corporately paid employees for his and his family's personal use
as well as the knowledge of and central role played by Mr.
Gonzalez in Mr. Winfield's defalcations, I direct you to Mr.
Gonzalez' deposition taken on April 17, 1997, in case No. 95-CI-
12385 Nancy Marie Thompson vs. InterGroup Summit Hills Inc., a
copy of which you should find in InterGroup's records. Mr.
Gonzalez testified, I recall, at pages 5 through 7, that as part
of his duties for InterGroup he does all of the accounting of the
Company, its President, the President's father, and the
<PAGE>
E-9
President's sister. My other charges with regard to Mr.
Winfield's use of other InterGroup employees for his personal
affairs are equally true.
When I joined Intergroup it was for the purpose of running every
aspect of the company except its securities operation which was
to remain within the exclusive control and direction of Mr.
Winfield. Mr. Winfield, himself, managed the staff consisting
of, at all times, a trader, at times one or more security
analysts and Mr. Gonzalez, the corporate controller. He
expressly forbade examination of or questions regarding his
personal portfolio by me or other officers of Intergroup on pain
of instant dismissal. During my first year or so at Intergroup I
busied myself with cleaning up its real estate operations and
other pressing problems. Mr. Winfield, during this period and
subsequently, boasted to all who would listen, inside and outside
the company, that he was achieving 100% to 300% returns annually
on his own securities trading. Yet the raw numbers I was seeing
internally did not support that premise at all. Indeed, there
appeared to be a severe cash shortage by virtue of his trading
for the company and InterGroup's securities results appeared to
be doing very poorly when compared to the general performance of
the stock market. I tentatively concluded that Winfield was so
enmeshed in the volume of his trading for Intergroup (that was
creating enormous brokerage commissions and charges) that he was
unable to recognize the dismal performance that was reflected in
the numbers. As an aside, the monies utilized for Winfield's
stock trading of Intergroup largely came from the real estate
operations, the property of which was heavily mortgaged to supply
funds for securities trading. Mr. Winfield insisted that the
problem causing the Company's money shortfall was the poor
operation of the real estate division and that his securities
operation, on behalf of the Company, was carrying the Company. I
had several public screaming matches with him when I told him
that the problem with the Company was its securities performance
and that his frenzied trading activity on behalf of the company
was expensive and non-productive and that he was expending his
energies for naught. Little did I know then that this frenzied
churning and concomitant expense to the company permitted him to
<PAGE>
E-10
get new issues, which he appropriated for himself and his family.
Mr. Winfield publicly rebuked me in vulgar and outrageous terms,
publicly humiliated me, told me that I didn't know what I was
talking about, claimed that I didn't understand the financials
and that the securities trading was carrying the company and
giving it its value. A point finally came when the Securities
and Exchange Commission required the company to disclose its
security performance. This gave me the opportunity to utilize
company personnel to examine and document InterGroup's
performance over a five and ten year period - an action which
would have cost me my position had I undertaken this task
earlier. As a result of the InterGroup's staffs' efforts, Mr.
Winfield's true performance in managing InterGroup's securities
portfolio became known and has since been reported regularly and,
I believe, accurately, in the Company's filings with the
Commission. Winfield bitterly attacked me and members of the
Company's staff in rude and intemperate language for developing
these numbers and claimed that they were part of a plot to
embarrass him, were unfair and incorrect from an accounting point
of view in that Company expenses had been improperly allocated to
the securities division he headed, and threatened to terminate us
all for being stupid and seeking to harm him and the Company. I
immediately turned to our Treasurer and director, William Nance,
for assistance. Mr. Nance is a certified public accountant and a
long-term friend of Mr. Winfield. He, together with Joseph
Grunwald, had been part of the take-over team that took control
of the Company in a hostile proxy contest in 1984/85. Mr. Nance
confirmed the numbers but my efforts to get Mr. Winfield to
reduce his trading for Intergroup were met with screams, curses
and further claims that his securities results were yields in the
100 to 300% per year range. These claims were made both
internally and to third parties in efforts to get them to merge
their operations into Intergroup so that they would gain the
benefits of Mr. Winfield's trading acumen. At the point I was
concluding that Mr. Winfield was delusional as to his performance
for the Company, I received word from some members of his staff
that he did very well in his trading for himself and his family
and that he was utilizing company personnel, equipment, etc., to
trade for his family and himself from company premises in a
<PAGE>
E-11
manner which favored him and his family over Intergroup. This
information and Mr. Winfield's fabulous reports as to his trading
prowess led me to initiate an internal examination of his
activities over a multi-month period which has not as yet been
totally concluded. I had neither staff nor funds nor could I
obtain them without risk of immediate termination, which would
have precluded me from unearthing the truth for our shareholders.
As I indicated above, approximately 15,000 trades in several
accounts had to be reviewed, absorbed, compared and analyzed to
determine the scope of the benefit taken by Mr. Winfield and his
family. Even now, I do not know what was diverted from the
Company prior to the period covered in my analysis, or, for that
matter, what was diverted in the fiscal year ended June 30, 1997
- - which was a very good year for new issues. In order to cover
himself, Mr. Winfield recently demanded that I write him a letter
stating that if the Company has no money available, he could buy
new issues for his own account and asked me to state that this
was true in the past as well. The reality is that the Company
always could and did have money available to buy new issues. Mr.
Winfield's professed inability to invest several hundred thousand
dollars of Company money in vacant land in Pasadena, Texas by
June 30, 1997, which he complains of in his letter of July 3,
1997, may, upon examination of his trading records, be an effort
to explain his acquisition of prime securities during such period
for his account rather than the Company's.
When my investigation of Mr. Winfield's activities were underway
but not completed, I spoke to two of my fellow directors with
regard to Mr. Winfield's trading activities. When I broached the
subject with our Treasurer and director, Mr. Nance, he
immediately responded, "You mean his new issue allocations to
himself? He was doing that when I was here." (Mr. Nance worked
as an in-house Treasurer at InterGroup in the early 90's.) When
I responded that he was apparently favoring himself and his
family in trading as well, Mr. Nance replied that "At least I was
unaware of that as Jim Fox was handling the trading for
InterGroup then." He continued and said, "If John wants to do
these kind of things, he should take the Company private." "I
have advised him several times to go private." Recognizing my
<PAGE>
E-12
error in confiding in him, I responded that I agreed that such
kind of conduct should not occur in a public corporation. I next
brought my investigation of Mr. Winfield's stock trading and new
issue allocation practices to the attention of director Grunwald
in December of 1996. I suggested that millions of dollars could
be involved although I had no firm number at that point. Mr.
Grunwald told me to stay on, complete my examination and advise
him of my findings by Summer, at which point he would sue if
necessary to remedy the situation. I advised him, at that time,
that Mr. Nance has been aware of the situation, in part, for some
time. We also discussed Tamar Valenta's no-show position and
other excesses by John Winfield. We both determined that it was
more important to determine how much money had been diverted from
the Company than to attack Winfield over these other issues at
this time. As an aside, the Tamar Valenta situation had been
reported, in writing, to the Board by a departing employee at a
time when my investigation of Mr. Winfield's trading activities
were already underway. In any event, I continued my
investigation reviewing and analyzing documents such as Mr.
Gonzalez' deposition referred to earlier and interviewed
corporate personnel in the expectation that upon conclusion of my
investigation I would have the support of Mr. Grunwald and Ms.
Roxborough, an original pre-Winfield director of the Company and
one whom I was confident would act honestly when presented with
my report. I also believed that Mr. Nance, when recognizing the
liability Mr. Winfield had exposed him to, both at Intergroup and
its affiliated companies, would consider the situation and do
what was right.
In the Spring of 1997, I became aware of a number of actions that
Mr. Winfield was either contemplating or taking to isolate me
from the corporate staff and affairs. He barred corporate
personnel from going to lunch with me or discussing any corporate
business except in his presence or that of David Gonzalez.
Moreover, he sought to take over alone or with Mr. Gonzalez'
assistance the real estate operations as well as the
entertainment operations - such as they were. He directed the
staff to record and track my attendance, the parties to whom I
<PAGE>
E-13
spoke, my whereabouts and to eavesdrop on and record my
conversations. In an attempt to procure my silence, he directed
me to perform mini-tasks as his supposed counsel, such as
pursuing an insurance claim for damage to his old home and making
a demand on a former decorator. In examining the origin of this
spate of activity on his part, I discovered that my consultations
with our directors as to his wrongdoing had been reported to him
and that he was seeking to limit further damage and immunize
himself from exposure. Mr. Winfield clearly never discussed nor
confided in me with regard to his trading practices and indeed
barred me from involvement on pain of dismissal. His attempted
use of me as a personal attorney came after he became aware of my
investigation and/or to insure himself against pursuit of one.
The July 3, 1997, letter of Mr. Winfield came in response, I
believe, to my attempt to schedule a meeting with Mr. Nance on
that same day for the purpose of providing him with the results
of my investigation and asking him to join me and Mr. Grunwald
and Ms. Roxborough in bringing Winfield's actions to an end. Mr.
Nance cancelled such meeting on the morning of July 3 because he
stated an employee was injured and he had to accompany him to the
hospital. I believe the meeting was cancelled or Mr. Winfield
issued the letter because our conversation was intercepted and
reported to him by either Carol Pearson or Anna Barcello. From
his letter and its directive seeking to restrict my
communications with our directors, I recognized that my ability
to move the directors to do what they should do in a quiet
fashion and in a manner in which their reputations as well as
InterGroup's would be preserved, was so compromised as to compel
me to write my July 3 letter to bring these charges publicly and
officially so that they would have to act or I would be released
to act.
I am confident that given your predilections and historic defense
of Mr. Winfield personally that the details set forth in this
letter will not have any appreciable effect upon you. I
therefore suggest that in addition to your putting the SEC and
NASDAQ on notice, that I accompany you and the lawyer of my
choice to the local office of the Securities and Exchange
<PAGE>
E-14
Commission for a full and open discussion of these issues. I am
available to do so at a mutually convenient time. If you prefer
that I go to the Securities and Exchange Commission or NASDAQ
without corporate counsel also present, then please let me know
and I will be guided accordingly.
Howard Jaffe
<PAGE>
E-15
Howard A. Jaffe
2131 Century Park Lane
Apartment 315
Los Angeles, California 90067
(310) 277-2052
July 24, 1997
To the Members of The Board
of Directors of The Intergroup Corp.
From: Howard A. Jaffe, Esq.
Members of the Board
Enclosed you will find a letter addressed to you.
The Notice of Meeting sent by Mr. Winfield on July 21, 1997 for
July 25, 1997 at 10 A.M. I believe to be defective because it
fails to state a purpose for such meeting as required by the By-
laws of Intergroup. By virtue of my enclosed letter a further
corrected notice will not be appropriate insofar as I personally
am concerned.
H. Jaffe
<PAGE>
E-16
Howard A. Jaffe
2131 Century Park Lane
Apartment 315
Los Angeles, California 90067
(310) 277-2052
July 24, 1997
Board of Directors
InterGroup Corporation
2121 Avenue of the Stars
Suite 2020
Los Angeles, CA 90067
Members of the Board:
Having been heretofore removed from (and/or replaced in) the
offices of Chief Operating Officer and Corporate Counsel of the
InterGroup Corporation by John V. Winfield for bringing certain
matters to your attention as members of its Board of Directors,
both orally and by letters dated July 3, 1997, and July 17, 1997,
addressed either to you or to Ms. Glaser, Esq., as your corporate
counsel, I hereby resign, effective immediately, as Vice Chairman
of the Board of Directors of the InterGroup Corporation as
Secretary thereof and from any and all positions I may hold in
any of its affiliates or subsidiaries.
This resignation is made necessary because, based on Ms. Glaser's
response to my letter of July 3, 1997, and conversations I have
had with the Board, I believe I have been and will be unable to
move you to address the very serious matters relating to Mr.
Winfield's conduct and its impact on our shareholders that I have
brought to your attention. I recognize that you have been long-
term associates of Mr. Winfield and may be reluctant to act, but
I nevertheless urge you to do your duty.
Very truly yours
Howard A. Jaffe
<PAGE>
E-17
July 28, 1997
From: Howard A. Jaffe
To: The InterGroup Corporation's John Winfield
Greg C. McPherson & David Gonzalez
I will be providing you with a statement relating to my
resignation as a director for including in the required SEC
filing late today or tomorrow morning.
<PAGE>
E-18
July 29, 1997
From: Howard A. Jaffe
To: InterGroup's SEC Report Filers
I fully apprised the Board of my reasons for resignation in two
letters with extensive attachments. Rather then provide a short
statement which would not do the issues justice I have concluded
that it would be best to bring my issues in a direct and complete
fashion in a forum that could examine my contentions and act on
them.
