Westgate-California Corporation (WCC, 1956–1982) was a public company and a vehicle for the business interests of C. Arnholt Smith (1899–1996), a San Diego banker, businessman, civic booster, political fundraiser and felon.
This led to the bankruptcy of WCC in 1974, which dragged on for eight years, at times causing significant disruption, at the end of which it liquidated in 1982.
[1][2] National Iron Works built some important San Diego structures, such as some of the plants in which Convair manufactured aircraft for World War II.
WCC ultimately owned the third largest tuna canning operation in the country, selling under brands like Carnation and Breast-O-Chicken [sic].
[19] In 1969, Wall Street Journal reporter Byron Calame wrote a takedown of WCC, Smith and USNB, Self-Dealing Tycoon: How a Californian Uses Publicly Owned Firms to Aid Private Ventures.
[20] Calame showed how Smith would buy a property or company for his own account, then mark it up and sell it to Westgate.
A steady drip of events and articles ensued, including indictment and imprisonment of one of Smith's long-time associates, and former WCC board-member, John Alessio.
[22] Meanwhile, banking investigators had uncovered more trouble at USNB, causing the Comptroller of the Currency to force Smith to step down.
[23] Finally, in October 1973, driven in part by an ongoing withdrawal of deposits,[24] the FDIC seized USNB, which by that time was the biggest bank in San Diego,[25] the 10th largest in California with over 60 branches[2] and $1.2bn in assets, based on continued self-dealing by Smith.
[29] In contrast, in modern Chapter 11 bankruptcy, unless malfeasance is proven, management remains in charge but is obligated to maximize the value of company assets.