INTERGROUP CORP
PRE 14A, 1998-08-27
OPERATORS OF APARTMENT BUILDINGS
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                                 SCHEDULE 14A
                                (Rule 14a-101)

                    INFORMATION REQUIRED IN PROXY STATEMENT

                            SCHEDULE 14A INFORMATION

             Proxy Statement Pursuant to Section 14(a) of the Securities       
                  Exchange Act of 1934 (Amendment No. ___ )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[X] Preliminary Proxy Statement       [ ] Confidential For Use of
                                          the Commission Only (as
                                          Permitted by Rule 14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12

                          THE INTERGROUP CORPORATION
                  -----------------------------------------------
                  (Name of Registrant as Specified in Its Charter) 

                  -----------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act
    Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- -------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- -------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
- -------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------
(5) Total Fee Paid:
- -------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
 
(1) Amount Previously Paid:
- -------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- -------------------------------------------------------------------------
(3) Filing Party:
- -------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------
<PAGE>

                          THE INTERGROUP CORPORATION

                      2121 Avenue of the Stars, Suite 2020
                          Los Angeles, California 90067

                                 (310) 556-1999
                    
                    ----------------------------------------
                    NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
                          TO BE HELD ON OCTOBER 2, 1998


TO THE SHAREHOLDERS OF THE INTERGROUP CORPORATION:

      NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of The
Intergroup Corporation ("InterGroup" or the "Company") will be held on October
2, 1998 at 11:00 A.M. at 2121 Avenue of the Stars, Suite 2020, Los Angeles, 
California 90067 for the purpose of considering and acting on the following:

    1. A proposal to approve an amendment to the Certificate of Incorporation  
       of the Company to provide that (a) the total number of shares that the  
       Company is authorized to issue shall be 9,000,000 shares, of which      
       4,000,000 shares shall be Common Stock, $0.01 par value per share       
       ("Common Stock"), 2,500,000 shares shall be Class A Common Stock, $0.01
       par value per share ("Class A Common Stock") and 2,500,000 shares shall 
       be Preferred Stock, $0.01 par value per share ("Preferred Stock); (b)   
       each share of Common Stock shall be entitled to ten (10) votes per      
       share and each share of Class A Common Stock shall be entitled to one   
       vote per share; (c) following the initial issuance of Class A Common 
       Stock by the Company, each share of Common Stock shall be convertible
       into one share of Class A Common Stock at the option of the holder      
       thereof; and (d) the holders of the Class A Common Stock shall have the 
       same rights and privileges as the holders of the Common Stock, with the 
       exception of voting power.
        
    2. To transact such other business as may properly come before the
       Meeting, or any adjournments thereof.

       August 21, 1998 is the record date for determining which Shareholders
are entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof.      

       Your proxy is important to us whether you own a few or many shares. 
Please complete, sign, date and promptly return the enclosed proxy in the
self-addressed, postage paid envelope provided.  Return the proxy even if you
plan to attend the meeting.  You may always revoke your proxy and vote in 
person.

Dated: August 27, 1998

                                         By Order of the Board of Directors,
   
                                         /s/ Gary N. Jacobs
                                        
                                         Gary N. Jacobs
                                         Secretary


<PAGE>  

                          THE INTERGROUP CORPORATION

                      2121 Avenue of the Stars, Suite 2020
                          Los Angeles, California 90067

                                (310) 556-1999
                      

 
                          ---------------------------
                                 PROXY STATEMENT                              
                          ---------------------------

                         SPECIAL MEETING OF SHAREHOLDERS
                          TO BE HELD ON OCTOBER 2, 1998

       The Board of Directors of The Intergroup Corporation (the "Company" or
"InterGroup") is soliciting proxies in the form enclosed with this statement
in connection with the Special Meeting of Shareholders to be held on October
2, 1998 or at any adjournment or adjournments thereof. 

       This Proxy Statement and the accompanying Proxy are intended to be sent
to Shareholders on or about September 9, 1998.  Only shareholders of record at
the close of business on August 21, 1998 are entitled to notice of, and to
vote at, the Special Meeting.

       If you give us a proxy, you can revoke it at any time before it is
used.  To revoke it, you may file a written notice revoking it with the
Secretary of the Company, execute a proxy with a later date or attend the
meeting and vote in person.

       You may vote at the Special Meeting only shares that you owned of
record on August 21, 1998.  There were 1,415,950 shares of Common Stock
outstanding on that date.   A majority, or 707,976 of those shares will
constitute a quorum for the transaction of business at the meeting.  Each
share is entitled to one vote on each matter to be presented at the meeting. 
The affirmative vote of the majority of the issued and outstanding shares of
Common Stock of the Company is required to approve the amendment to the
Certificate of Incorporation of the Company.  

       In addition to mailing this material to shareholders, the Company has
asked banks and brokers to forward copies to persons for whom they hold stock
of the Company and to request authority for execution of the proxies.  The
Company will reimburse the banks and brokers for their reasonable out-of-
pocket expenses in doing so.  Officers of the Company may, without being
additionally compensated, solicit proxies by mail, telephone, telegram or
personal contact.  All proxy soliciting expenses will be paid by the Company. 
The Company does not expect to employ anyone else to assist in the
solicitation of proxies. 

<PAGE>

                   
        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

       The following table sets forth certain information with respect to
beneficial ownership of the Company's Common Stock as of August 21, 1998 by:
(i) each person known by the Company to own beneficially more than five
percent of the Company's outstanding Common Stock; (ii) each of the Company's
directors; (iii) each of the named executive officers; and (iv) all directors
and executive officers of the Company as a group.

<TABLE>
<CAPTION>

NAME AND ADDRESS OF                   AMOUNT AND NATURE OF         PERCENT OF
BENEFICIAL OWNER (1)                 BENEFICIAL OWNERSHIP (2)       CLASS (3)
- ------------------------------------------------------------------------------
<S>                                      <C>                       <C>
John V. Winfield                         616,873 (4)               43.6%

Josef A. Grunwald                         48,697                    3.4%

William J. Nance                          25,500                    1.8%

Mildred Bond Roxborough                    1,590                      *

Gary N. Jacobs                             1,500                      *

John C. Love                                   0                      *

Gregory C. McPherson                       5,554 (5)                  *

All Directors and Executive
Officers as a Group (7 persons)          699,714                   49.4%
</TABLE>
________________________

* Less than 1%

(1) The address for each person is c/o the Company at 2121 Avenue of the
Stars, Suite 2020, Los Angeles, CA 90067.

(2) Unless otherwise indicated, and subject to applicable community property
laws, each person has sole voting and investment power wit respect to the
shares beneficially owned.

(3) Based on 1,415,950 shares of Common Stock issued and outstanding as of
August 21, 1998.

(4) Includes 20,323 shares allocated to Mr. Winfield under the ESOP.  Does not
include an additional 21,309 shares held by the ESOP with respect to which Mr.
Winfield, as Trustee, would have the power to vote if voting instructions are
not provided by the participants on a timely basis.

(5) Includes 1,954 shares allocated to Mr. McPherson under the ESOP.

                                 
<PAGE>

                               PROPOSAL ONE

   APPROVAL OF THE AMENDMENTS TO THE COMPANY'S CERTIFICATE OF INCORPORATION

     The Company's Certificate of Incorporation, as currently in effect,
authorizes 1,500,000 shares of Common Stock, $0.01 par value per share, and
100,000 shares of Preferred Stock, $0.10 par value per share.  None of the 
Preferred Stock is issued and outstanding.

     On December 5, 1995 the shareholders of the Company approved a proposal
to amend the Company's Certificate of Incorporation to increase the number of
authorized shares of Preferred Stock from 100,000 to 2,500,000 shares,
increase the number of authorized shares of Common Stock from 1,500,000 to
4,000,000 shares and divide the Common Stock into two series designated as
1,500,000 shares of Class A Common Stock, consisting of the Company's existing
Common Stock and 2,500,000 shares of Class B Common Stock, which would be 
identical to the Class A Common Stock, except it would have had one-tenth vote 
per share.  That amendment was to become effective only upon filing with the 
Delaware Secretary of State and the Board was granted the right to determine 
not to file that amendment, which it elected not to file.

     On August 20, 1998, The Company's Board of Directors authorized, subject
to shareholder approval, an amendment to the Company's Certificate of
Incorporation to provide that (a) the total number of shares that the Company
is authorized to issue shall be 9,000,000 shares, of which 4,000,000 shares
shall be Common Stock, $0.01 par value per share, 2,500,000 shares shall be
Class A Common Stock, $0.01 par value per share and 2,500,000 shares shall be
Preferred Stock, $0.01 par value per share; (b) each share of Common Stock
shall be entitled to ten (10) votes per share and each share of Class A Common
Stock shall be entitled to one vote per share; (c) following the initial 
issuance of Class A Common Stock by the Company, each share of Common Stock
shall be convertible into one share of Class A Common Stock at the option of
the holder  thereof; and (d) the holders of the Class A Common Stock shall
have the same rights and privileges as the holders of the Common Stock, with
the exception of voting power.

     Upon adoption of Proposal One, Article Fourth of the Company's
Certificate of Incorporation would be amended and restated in its entirety to
read as follows:

                                FOURTH

          "The total of shares of stock which the Corporation shall have the
          authority to issue is Nine Million (9,000,0000) shares, of  which
          Four Million (4,000,000) shares shall be Common Stock, $0.01 par
          value per share,  Two Million Five Hundred Thousand (2,500,000)
          shares shall be Class A Common Stock, $0.01 par value, and Two
          Million Five Hundred Thousand (2,500,000) shares shall be
          Preferred Stock, $0.01 par value per share.
          
          Holders of the Common Stock shall have the right to cast ten (10)
          votes for each share held of record and holders of Class A Common
          Stock shall have the right to cast one vote for each share held of
          record on all matters submitted to a vote of the holders of common
          stock.  The Common Stock and the Class A Common Stock shall vote
          together as a single class on all matters on which stockholders
          may vote, including the election of directors, except when class
          voting is required by applicable law.

<PAGE>
          
          Following the initial issuance of Class A Common Stock by the 
          Company, each share of Common Stock shall be convertible, at the 
          election of the holder thereof, into one share of Class A Common 
          Stock.
          
          Holders of Class A Common Stock shall be entitled to the same
          rights, privileges and opportunities (other than voting rights) as
          holders of Common Stock in any merger, reorganization,
          recapitalization or similar transaction to which the Corporation
          is a party.  The Corporation shall not support any tender offer or
          exchange offer which treats Class A Common Stock differently
          (except in respect of voting rights) from Common Stock.
          
          The Preferred Stock may be issued from time to time in one or more
          series.  The Board of Directors of the Corporation is hereby
          expressly authorized to provide by resolution or resolutions duly
          adopted by it prior to issuance, for the creation of each such
          series and to fix the designation and the powers and preferences,
          rights, qualifications, limitations and restrictions relating to
          the shares of each such series.  The authority of the Board of
          Directors with respect to each series of Preferred Stock shall
          include, but not be limited to, determining the following: 
          
                   a.  the designation of such series, the number of
              shares to constitute such series and the stated value if
              different from the par value thereof;
              
                   b.  whether the shares of such series shall have voting
              rights, in addition to any voting rights provided by law
              and, if so, the terms of such voting rights, which shall be
              general or limited;
              
                   c.  the dividends, if any, payable on such series,
              whether any such dividends shall be cumulative and, if so,
              from what dates, the conditions and dates upon which such
              dividends shall be payable, and the preferences or relation
              which such dividends shall bear to the dividends payable on
              any shares of stock of any other class or any other series
              of Preferred Stock;
              
                   d.  whether the shares of such series shall be subject
              to redemption by the Corporation and, if so, the times,
              prices and other conditions of such redemption;
              
                   e.  the amount or amounts payable upon shares of such
              series upon, and the rights of the holders of such series
              in, the voluntary winding up, or upon any dissolution of the
              assets, of the Corporation;
              
                   f.  whether the shares of such series shall be subject
              to the operation of a retirement or sinking fund and, if so,
              the extent to and the manner in which any such retirement or
              sinking fund shall be applied to the purchase or redemption
              of the shares of such series for retirement or other
              corporate purposes and the terms and provisions relating to
              the operation thereof;
<PAGE>
              
                   g.  whether the shares of such series shall be
              convertible into, or exchangeable for shares of stock of any
              other class or any other series of Preferred Stock or any
              other securities and, if so, the price or prices, or rate or
              rates of conversion or exchange and the method, if any, of
              adjusting the same, and any other terms and conditions of
              conversion or exchange;
                            
                   h.  the limitations and restrictions, if any, to be
              effective while any shares of such series are outstanding
              upon the payment of dividends or the making of other
              distributions on, and upon the purchase, redemption or other
              acquisition by the Corporation of, the common stock or
              shares of stock of any other class or any other series of
              Preferred Stock;
              
                   i.  the conditions or restrictions, if any, upon the
              creation of indebtedness of the Corporation or upon the
              issue of any additional stock, including additional shares
              of such series or of any other series of Preferred stock or
              of any other class; and
              
                   j.   any other powers, preferences and relative
              participating, optional and other special rights, and any
              qualifications, limitations and restrictions, thereof.
              
            The powers, preferences and relative, participating, optional or
          other special rights of each series of Preferred Stock, and the
          qualifications, limitations or restrictions thereof, if any, may
          differ from those of any and all other series at any time
          outstanding.  All shares of any one series of Preferred Stock
          shall be identical in all respects with all other shares of such
          series, except that the shares from any one series issued at
          different times may differ as to the dates from which dividends
          thereof shall be cumulative.
          
          Subject to the protective conditions and restrictions of any
          outstanding Preferred Stock, any amendment to this Certificate of
          Incorporation which increases or decreases the authorized capital
          stock of any class or classes may be adopted by the affirmative
          vote of the holders of a majority of the outstanding shares of the
          voting stock of the corporation."
           
     
 
     The Certificate of Incorporation of the Company, as currently in effect,
authorizes only 1,500,000 shares of Common Stock.  Based on 1,415,950 shares
of Common Stock issued and outstanding as of August 21, 1998, only 84,050
shares of Common Stock are authorized and available for future issuance.  The
Board of Directors has determined that the current number of authorized shares
of Common Stock is inadequate for the Company to meet its general corporate
needs, including, but not limited to, achieving and maintaining full
compliance with The Nasdaq Stock Market's new public float maintenance
requirements for National Market System ("NMS") companies. 

<PAGE>

     The Board has proposed the amendments to assure an adequate supply of
authorized but unissued shares and to provide the Company with more
flexibility for general corporate needs including, but not limited to, the
issuance of stock dividends, the raising of additional capital, and the 
issuance of shares for financing the acquisition of other businesses or 
properties.  The Company has no present plans or arrangements relating to the
issuance of any shares of The Class A Common Stock or the Preferred Stock.  
The Company does plan to issue additional shares of Common Stock through stock
dividends, or otherwise, in order to achieve and maintain full compliance with
the new public float requirements for Nasdaq NMS companies.

     If this proposal is adopted, the additional shares of Common Stock, Class
A Common Stock and the Preferred Stock may be issued at the discretion of the
Board of Directors at such times, and in such amounts and upon such terms as
the Board of Directors may determine, without further approval of the
stockholders unless, in any instance, such approval is expressly required by
regulatory agencies or otherwise.  Shareholders have no preemptive rights to
purchase additional shares.  The rights, preferences or privileges with
respect to each share of existing Common Stock will not be changed by the
proposed amendments other than to entitle each share of Common Stock to ten
(10) votes per share.  The adoption of the proposal will not of itself cause
any change in the capital accounts of the Company.  However, the issuance of
additional shares of Common Stock, Class A Common Stock and/or Preferred Stock
could dilute the existing shareholders' equity interest in the Company. 
Approval of the proposed amendment to the Certificate of Incorporation would
also result in the Common Stock becoming convertible, at the option of the
holder thereof, into Class A Common Stock, should any Class A Common Stock be
issued in the future. Any such conversion would result in an immediate,
substantial reduction in the converting shareholder's voting power.

     In considering the Amendment, shareholders should consider the possible 
effects on the holders of the Company's Common Stock, including: (a) dilution
of the proportionate voting power of the existing Common Stock depending on 
the number of shares of Common Stock, Class A Common Stock or Preferred Stock
issued; (b) the dilution of the rights of holders of Common Stock to share in
the Company's assets upon liquidation; and (c) the reduction of the amount 
otherwise available for the payment of dividends on existing Common Stock, to
the extent that dividends are payable on any issued shares of Common Stock, 
Class A Common Stock or Preferred Stock.

     Shareholders should also consider that an increase in the number of
authorized shares could strengthen the position of the Board of Directors and
may make removal of the Board more difficult even if such removal would
generally be beneficial to Shareholders.  The authorization to issue 
additional shares of Common Stock, Class A Common Stock and/or Preferred Stock
could also provide the Board the capacity to discourage, delay or prevent an
acquisition or change in control of the Company.

VOTE REQUIRED
     
     The affirmative vote of the majority of the issued and outstanding shares
of Common Stock of the Company present or represented by proxy and entitled to
vote at the Special Meeting is required for approval of the proposal.
 
RECOMMENDATION OF BOARD OF DIRECTORS

     The Board of Directors unanimously recommends that stockholders vote FOR
approval of this proposal to amend the Company's Certificate of Incorporation.

<PAGE>  



                        SHAREHOLDER PROPOSALS

     The next Annual Meeting of Shareholders is expected to take place on or 
about December 8, 1998.  The deadline to submit shareholder proposals to be 
included in the Company's proxy statement and form of proxy for that meeting
was June 30, 1998.  No shareholder proposals were received by the Company.  The
deadline for submitting shareholder proposals for inclusion in the Company's
proxy statement and form of proxy for its 1999 Annual Meeting will be
calculated in the manner provided in Rule 14a-8.


                          ANNUAL REPORT ON FORM 10-KSB

     A copy of the Company's Annual Report on Securities and Exchange
Commission Form 10-KSB for the fiscal year ended June 30, 1997 including the
financial statements and financial statement schedules, will be furnished free
of charge, upon written request, to each person entitled to vote at the
Special Meeting.  Such request should be directed to John V. Winfield,
President and Chairman, 2121 Avenue of the Stars, Suite 2020, Los Angeles,
California 90067. 

                             OTHER BUSINESS

     Management of the Company does not intend to present any business at the
Special Meeting other than as set forth in Item 1 of the attached Notice of
Special Meeting of Shareholders, and it has no information that others will
present any other business at the Special Meeting.  However, if any other
matters are properly raised, the persons named in the accompanying proxy
intend to vote in accordance with their judgment on such matters. 

                                     By Order of the Board of Directors

                                     THE INTERGROUP CORPORATION
  

                                     GARY N. JACOBS
                                     Secretary
Dated: Los Angeles, California
       August 27, 1998

<PAGE>
<PAGE>
                              
PROXY                                                            PROXY
                         THE INTERGROUP CORPORATION
         SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 2, 1998
          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby (a) acknowledges receipt of the Notice of Special
Meeting of Shareholders of The Intergroup Corporation to be held on October 2,
1998 and the Proxy Statement in connection therewith, each dated August 27,
1998; (b) appoints Gary N. Jacobs and John V. Winfield, or either of them, as
Proxies, each with the power to appoint a substitute; (c) authorizes the
Proxies to represent and to vote, as designated on the reverse, all the shares
of Common Stock of The Intergroup Corporation held of record by the
undersigned on August 21, 1998, at the Special Meeting of Shareholders to be
held on October 2, 1997 or any adjournment(s) thereof; and revokes any proxies
heretofore given.


1. Approval of amendment to the Certificate of Incorporation of the Company to
provide that (a) the total number of shares that the Company is authorized to
issue shall be 9,000,000 shares, of which 4,000,000 shares shall be Common
Stock, $0.01 par value per share, 2,500,000 shares shall be Class A Common
Stock, $0.01 par value per share, and 2,500,000 shares shall be Preferred
Stock, $0.01 par value per share; (b) each share of Common Stock shall be
entitled to ten (10) votes per share and each share of Class A Common Stock
shall be entitled to one  vote per share; (c) following the initial issuance 
of Class A Common Stock by the Company, each share of Common Stock shall
be convertible into one share of Class A Common Stock at the option of the
holder thereof; and (d) the holders of the Class A Common Stock shall have the 
same rights and privileges as the holders of the Common Stock, with the
exception of voting power.    

          [  ] FOR        [  ] AGAINST        [  ] ABSTAIN


                 (IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE)


- ------------------------------------------------------------------------------


<PAGE>
 
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL 1 AND, IN THE DISCRETION OF THE PROXIES, ON ANY OTHER BUSINESS.

Please sign exactly as your name or names appear. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give your full title as such. If a corporation,
please sign in full corporate name by President or other authorized officer. If
a partnership, please sign in partnership name by authorized person.

                                        
                                         Dated: _______________, 1998
                                                                               
                                         ____________________________
                                         Signature

                                         _____________________________
                                         Signature if held jointly
 
                                         Please mark, sign, date and     
                                         return the proxy card promptly  
                                         using the enclosed envelope.


                           



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