Elder Kuttner in trouble
On June 17, 2005, Tyco CFO and Albemarle County land baron Mark Swartz was convicted for embezzling millions of dollars from Tyco, and now– almost exactly a year later– a private corporate investigation has an even tighter Charlottesville connection. Reports today from Reuters and the AP indicate that Charlottesville-based businessman Ludwig Kuttner has been forced out of his role as CEO of the New York-based Hampshire Group pending a financial investigation.
The reports indicate that the company, the Hampshire Group Limited, has placed Kuttner and several other top executives on administrative leave for alleged "misappropriation of assets for personal benefit" as well as alleged accounting deficiencies, improper tax reporting, and deficient expense reimbursement. Reps for the company did not return the Hook's call.
Kuttner is best known locally as the owner of Central Place on the Downtown Mall, as well as the sprawling Frank Ix building off Elliott Avenue. With his son, Oliver, Kuttner was instrumental in developing The Terraces on the Downtown Mall, which has been owned by the Hampshire Group.
Kuttner and his wife, artist Beatrix Ost, are known to split their time between his 500-acre Esmont-area estate, Estouteville, and a pied-a-terre in Manhattan. The latter was memorably featured in a 2003 New York Times Magazine cover story.
Coincidentally, Kuttner and convict Swartz were once nearly next door neighbors, each owning adjacent historic Coles family estates, Kuttner with Estouteville and Swartz with the much larger– and at a $17 million purchase price– Enniscorthy.
Although Kuttner himself did not return calls seeking comment, one close to him says he doesn't believe he engaged in wrongdoing. "I think my father is very, very smart, a very hardworker," says son Oliver Kuttner, a real estate developer. "I don't see him being a crook; I really don't. I know that when we came over to this country, my father took over a company that was destined to be closed," says the younger Kuttner.
A manufacturer of sweaters, the Hampshire Group was formed from two unrelated firms in 1977 and went public in 1992, according to its website. "He fought very hard trying to not have the company go under the way a lot of textile companies did," says the younger Kuttner.
Indeed, although the company stock has lost nearly 30 percent of its value since January to close at $15.44 today, over the last five years, it has quintupled from approximately $5 per share in late 2001 to a high of $24 per share in January.
"That doesn't happen by accident," says Kuttner of his father. "He must have done something to run a company in a fairly profitable fashion." And, he adds, Ludwig is not someone prone to extravagance, as the elder Kuttners's own choice of automobile is a Chrysler Concourse.
"He's really proud of the Chrysler because he thinks we should all be driving American," says Kuttner, who believes his father will be cleared of any wrongdoing. "He has a Ferrari, the auto enthusiast son admits, "but that's only because I pushed him into that."