The Family Jewels

In life, Paul Kalmanovitz controlled every business decision related to his $500million brewery/real estate dynasty.He even made detailed plans forthe governance of his estateafter he died. So why is the Kalmanovitz fortune the center of two vituperative

Truth is surely the first casualty of any legal action. But the Kalmanovitz estate war is exceptionally hard to untangle. The trustees won't talk. Numerous requests for interviews were turned down. Many more phone calls went unreturned. And those on the other side, the relatives and the former employees, are too cryptic, too paranoid, too full of bile and impossible stories to fully believe. After wading in the muck of the Kalmanovitz legacy awhile, an observer is left with an unavoidable notion: Maybe everyone's lying. If so, it raises an ever more disturbing set of queries: How could such a powerful, willful man as Mr. Paul leave behind such a frail legacy? What happened to leave the estate so vulnerable to attack, so exposed to misrepresentation and manipulation?

In addition to the mausoleum, the other most manifest reminder of the Kalmanovitz legacy lies on Paradise Cay in Tiburon: Mr. Paul's manor. Seven homes and 20-some vacant lots.

A dimple of land jutting from the coastline, Paradise Cay has two distinct advantages: It affords its residents a sweeping view of the bay and the luxury of parking their yachts and sailboats at their back doors. Looking down the hill on the outcropping of homes, with its canals and landings, it's hard not to imagine alighting from sailboat to back patio, from first mate and mizzen to maid and martini. American flags fly from several of the homes.

The cay is a far cry from where Mr. Paul began his life. Born two days after Christmas 1905, Mr. Paul took the advice of his father, Solomon, and at the age of 21 left Poland.

"His father told him, 'I don't like things here,' " Orsi said in court. "Go find a better life." The Nazis were still mere beer-hall thugs at the time. Only later would Solomon Kalmanovitz's warning take on a tragic prescience.

Mr. Paul traveled to Palestine and Egypt, where he learned to work on cars in a motor pool. On the advice of friends, he went to France to board a ship for America. "They told him there was a lot of U.S. trade with France," Orsi said. There he boarded the Grenoble, a coal ship sailing for Philadelphia.

Once docked in the States, Mr. Paul feigned illness and won a shore pass. Told to stay nearby, he instead fled to New York, where he sold his peacoat for cash and met his future wife, Lydia Kohnen, an immigrant herself from Hamburg, Germany. The couple married in 1927 and traveled to Chicago, but the city was too cold for them. "Mr. Paul kept seeing postcards of California with palm trees," Orsi testified. "So he went to Los Angeles."

In Los Angeles, Mr. Paul worked as a handyman and later as a driver for movie mogul Louis B. Mayer. Eventually he turned his sights to nightclubs. During World War II, he hooked up with Nathan Sherry, the "S" in S&P, who at the time was a newspaper delivery driver for the now-defunct Los Angeles Examiner. Soon enough, the two owned all the bars around Union Station, a beehive of thirsty soldiers on their way to the Pacific theater. All told, Mr. Paul owned about 27 clubs, according to Orsi. He was the first white club owner to give Nat King Cole a break.

He also began to develop the reputation as a controlling boss. Orsi said in court that Mr. Paul used to put chalk marks on all the liquor bottles in his nightclubs. At closing time, Mr. Paul would send an employee around to check the level of liquor in each bottle to see how much had been sold and to make sure none was being absconded with by the help.

In 1958, Mr. Paul entered the brewery biz by buying Maier Brewing Co., in Los Angeles. For the next three decades he acquired brewery after brewery, often enacting ruthless consolidations where scores of employees were fired. He would routinely buy struggling, older breweries and move their operations to the three S&P plants in Milwaukee, San Antonio, and Tumwater, Wash. He would then dismantle the older plants and build shopping malls and office buildings.

So renowned was his cost cutting that Falstaff Brewing's St. Louis headquarters flew its flag upside-down at half-staff in 1975 when employees learned Mr. Paul had acquired the company. "He went through Falstaff like Grant went through Richmond," Lutz Issleib told Forbes this year.

Mr. Paul's crowning business acquisition, the purchase of Pabst Brewing Co. in 1985 -- a $63 million purchase in which he assumed the brewery's debt in a hostile takeover -- was made bittersweet by a concurrent diagnosis of prostate cancer. Two years later, he was dead at age 81.

Today, the holdings of S&P, according to Forbes and Orsi's testimony, are staggering.

The sixth largest brewer in America -- the company brews Pabst, Olympia, Hamms, Falstaff, Lucky Lager, Pearl, Regal Pale, and Grace Brothers -- S&P has expanded itself into foreign countries in the past few years, penetrating China, Taiwan, and Hong Kong and becoming the largest beer exporter to Vietnam.

S&P also boasts vast real estate holdings from New Jersey and Rhode Island to Texas, Louisiana, and Illinois. In California, the company owns numerous shopping centers, warehouses, and apartment complexes. With more than 500 tenants, S&P rakes in $18.5 million a year in rent payments.

« Previous Page
Next Page »
My Voice Nation Help
San Francisco Concert Tickets
©2014 SF Weekly, LP, All rights reserved.