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A major investor in Tumbleweed Inc. now says he has no plans to sell his shares in the Louisville-based restaurant company, after threatening last summer to auction them off.
Gerald Mansbach, the retired owner of an Ashland, Ky., scrap-metal-recycling business, said last week that he is "comfortable with the position" he's in and intends for now to hold onto the 2.3 million Tumbleweed shares he acquired through a settlement filed last month.
"I have a lot of confidence in Tumbleweed's management," and particularly in current chairman, president and CEO Terry Smith, said Mansbach, who also owns another 98,002 shares.
In all, Mansbach owns 41 percent of Tumbleweed's stock. "I think we have the company going in the right direction, so I'm in no big rush to do anything at this moment," he said.
Smith, for his part, said a turnaround is under way at Tumbleweed, with customers returning to the company's 65 stores and same-store sales starting to grow again.
"We're running phenomenal sales increases," Smith said in a pre-Christmas interview. "We came from being down into major negative sales, and now we're in a very positive area."
Matt Higgins, president of TW Indiana LLC, Tumbleweed's largest franchisee, echoed Smith's comments.
"We have seen a tremendous improvement in overall operations and in the environment of the company since Terry arrived" in August 2000, said Higgins, whose company owns and operates six stores in Southern Indiana and one in Lexington.
"We are trending 5 to 7 percent up in comparable sales, and so is the company," he said. "It speaks very loudly for Terry's management."
As for the Mansbach deal, Higgins said, it "could not have worked out better than if a genie had come out of a bottle."
Higgins said he believes Mansbach will hold onto his shares for now and let the new management at Tumbleweed, which includes chief financial officer Glennon "Buddy" Mattingly, "grow the company."
Agreement settles $4 million loan
Mansbach, whose sister, Minx Auerbach, sits on Tumbleweed's board of directors, won a court judgment last August declaring a group of former Tumbleweed executives, including former Tumbleweed president and CEO Jack Butorac, in default on a $4 million loan Mansbach made to the group in late 1998.
The loan allowed the...