Robert Wynne - Business Career

Business Career

Returning to private life, Wynne was appointed president of the First National Fire Insurance Company when it formed in February 1912 through the merger of the Continental and Munsey insurance companies. In October 1912, First National Fire purchased a half-interest in the Southern Office Building at 15th and H Streets NW. Trust deeds of $800,000, $450,000, and $325,000 attached to the building. First National Fire was sued by its stockholders for incurring this debt. In January 1912, the company was the focus of a congressional investigation into fraud committed by insurance companies.

Wynne was ousted as president in April 1914 over the Southern Building acquisition. Suspicious that proxy votes had been withheld from the count, Wynne successfully sued to have personal mail which had been delivered to the company (and which the company had seized) returned to him. As he expected, many proxy votes had not been counted. When they were counted, Wynne was reelected president of the company on June 17, 1914.

The Commercial Fire Insurance Company of Baltimore, Maryland, the co-owner of the Southern Building, tried to force a merger with the First National in August 1914. Wynne resisted the merger, and demanded that the Southern Building be partitioned so that First National could extricate itself from its business arrangements with Commercial Fire. The partition effort was unsuccessful, but in December 1914 Commercial Fire sold its interest in the structure. Commercial Fire went bankrupt days later.

On February 10, 1915, businessman William Tryson and others formed the Allan E. Walker Company to buy the Southern Building. Nine days later, First National Fire sold the building to the Walker Company for an undisclosed amount. This allowed the $450,000 and $325,000 trusts to be paid and released. On March 18, the Walker Company sold the building back to First National, incurring a trust deed of $600,000. This triggered more stockholder lawsuits, which argued that Wynne was attempting to hide the company's financial distress.

Although the stockholder suits were not successful, the reputation of First National Fire Insurance was severely damaged. On February 7, 1917, a stockholders meeting approved the refinancing of the Southern Building. The structure was sold again to the Walker Company on February 14, and the Walker Company sold it back to First National on February 28 (now subject to a single trust deed of $900,000). On March 7, First National's board of directors agreed to form a new company—the Southern Realty Corporation, with Wynne as its president—to buy the Southern Building. On March 10, First National's shareholders were advised to trade their stock on a one-to-one basis for stock in the Southern Building, with any excess proceeds from the sale returning to First National stockholders as a dividend. But on May 18, the Walker Company offered to buy the building for $1.8 million (to be paid with a first mortgage of $900,000, a second mortgage of $677,000, and the remainder by First National stockholders who wanted shares in the Walker Company). First National agreed to the Walker Co. sale, leading to a struggle for control of the Southern Building among the three entities.

First National filed for voluntary bankruptcy on August 13, 1917. Wynne continued as president of the Southern Realty Corporation, which remained solvent. The bankruptcy led to extensive litigation, as shareholders who did not invest in the Walker Company sued to recover their investment in First National and the Walker Company fought to gain ownership of the Southern Building from the Southern Realty Corporation. During this litigation, First National's title to the building was reaffirmed, First National's deal to sell the building to the Walker Company was annulled, the sale of the building by First National to Southern Realty affirmed, and tenants sued over skyrocketing rents at the building. Southern Realty's investors unsuccessfully sued in July 1920 to have the firm declared bankrupt, but it quickly became apparent that Southern Realty was bankrupt as well. Additional court hearings in late July 1920 led to the sale of the Southern Building to the Walker Company in late August 1920. with the Walker Company assuming full control by October. Southern Realty was liquidated in July 1921.

Wynne had long defended First National's financial health. The company's liquidation largely proved him correct: Few of the stockholders in First National lost money.

Wynne was also an incorporator, vice president, and director of the Washington and Southern Bank. He helped form the bank in April 1912, and remained with it until August 1913.