Northview’s Auditors Cite Boesky Lawsuits

Northview Corp.’s outside auditors have qualified their opinion of the company’s annual report, citing the uncertain outcome of three shareholder lawsuits seeking more than $285 million brought against former Northview Chairman Ivan Boesky. Peat Marwick Mitchell & Co. said Northview has made no provision for possible successful claims.

The lawsuits were filed after Boesky paid a $100-million settlement in November on charges brought by the Securities and Exchange Commission that he engaged in illegal stock-trading activity. At the same time, Boesky resigned as Northview chairman, although his wife, Seema Boesky, remains a Northview director.

Northview also reported net income of $966,000 on revenues of $39.8 million for fiscal 1986, down from net income of $1.5 million on revenues of $41.3 million in 1985. The 1986 earnings reflect a $1.6-million gain on the sale of an office building, as well as a $3-million write-down to net realizable value of a hotel project in Costa Mesa.

Northview’s businesses consist mainly of operating Vagabond Inns and Beverly Heritage Hotels. The company also actively invests a portfolio of securities financed by Northview’s 1983 sale of $96.2 million in subordinated debentures. After Boesky resigned, Northview announced that it would disengage from all investment activities.