Storymania - This Little Piggy by Matt Crisci

This Little Piggy (27)
Matt Crisci

“ Bob, I was delighted with the results of the Consumer Electronics Show CES,” said an upbeat Phil. “How about you?”
Bob grimaced.
“Michael did one hell of a job harnessing our cowboys. It looks like your vision of one plus one will add up to three,” continued Scarborough.
“Are we ready to order Mr. Scarborough?”
“Gabriel, give us a few more minutes.”
“Phil, about the results of the CES Show, I’m not so sure I …”
“Bob,” said an upbeat Scarborough, unaware he had accidentally interrupted Bob’s planned cheap shot, “did you ever read Jimmy Breslin’s novel ‘The Gang that Couldn’t Shoot Straight?’”
“No, why?” (Bob hadn’t read a piece of literature since he graduated from Wharton twenty-six years prior).
“The disheveled cast of characters in the book has amazing similarities to our off-beat band of multi-millionaires. Every member of the gang did things their way, but somehow it worked.”
Bob had to chuckle.
“I don’t know how Michael maintains his sanity dealing with those guys day after day,” smiled Scarborough shaking his head.
“Which reminds me Phil, I know you’re fond of Michael. I am too, but some performance issues have begun to emerge.”
Scarborough knew Bob was now on agenda. He also knew if there was one person that could be trusted, unequivocally, it was Michael.
“Really?”
“He’s incapable of keeping expenses under control, which as you can appreciate is fatal for the chief operating guy. He also seems insensitive to our thin cash flow position, given the truncated private placement.”
“Obviously, you’ve got some specifics?”
Bob remained on agenda. His agenda. “I thought spending four hundred thousand dollars on marketing and promotion for CES business development activities was pretty excessive.”
“Really? I was under the impression that the managements of our companies thought the package was gangbusters and our return on investment exceeded expectations.”
Bob surprised at Scarborough’s command of the facts.
“And, what other issues are there?”
“Well, it’s a lot of little things,” said Bob. “Nothing that I can put my finger on specifically.”
“Frankly Bob, I’m concerned we’re beginning to throw stones at the only person that’s focused on growing the business.”
Bob tried to back peddle. “Let’s make sure we don’t have any misunderstandings. My objective is to identify areas for improvement, not engage in character assassination.”
“Well then, I have some suggestions.”
“Great, fire away.”
“Bob, what initiatives have you taken to obtain additional lines of credit and reduce our cash flow crunch? After all you’re supposed to be the experienced pro.”
“Well Ahhh…”
“Perhaps we should consider devoting a little less energy to pursuing new acquisitions until we’ve fully absorbed the first group?” glared Scarborough. “I also heard some rumor you were talking to a major banking executive about that far-fetched Barter Bank idea. Tell me it’s not true?”
“With all due respect Phil, the Barter Bank is not far fetched and…”
“Bob we do realize solving our SEC redline problem is also a major priority. Unless we bring that issue to closure, I see zero opportunity to raise another dime for additional acquisitions, Barter Banks or whatever.”
Bob was off. “In all my years. The SEC conduct is an outrage. It’s libelous, it’s defamatory. The nerve. We’re just trying to build a business with shareholder value…”
“Bob, please. This is Phil. Enough with the bullshit. There is only one-way to cut through the SEC redlining. Show them they’re wrong. Make the Company an operating success, deliver some solid operating profits. You know,” sneered Scarborough, “like in building real shareholder value.”
Bob nodded.
“At the moment, it would appear, only one of you is focused on that!”
Scarborough thought his message was crystal clear. As he would discover, it wasn’t.
                                                                             *
BOB FLEW TO LOS ANGELES to meet Franklin Jason Garrett for dinner at the bustling, trendy Palomino Restaurant on Wilshire in Beverly Hills. A conservative lending officer by day at United Pacific Bank, Garrett was anything but on the L.A. night scene.
Wearing in a black silk sport jacket, beige silk shirt and slacks and slick black hair, Garrett looked like Nicholas Cage on the prowl as he scanned the bar for fresh flesh while half listening to Bob do his ITI promotional song and dance.
“Franklin, according to our projections, we only need about twenty million in additional lines. Since we’ve worked together successfully before, I thought I’d give you first shot at the business.”
“Bob, I appreciate your loyalty,” said a sarcastic Garrett. “But the Bank’s got a long memory.”
“What are you talking about?”
“You were a great customer at United, no question about it. And we made a lot of money. But when you sucked us into that Chicago Clearing House business we lost everything, plus some.”
“Franklin you know that wasn’t the Bob Goldstrom from United Medical.”
“Bob, I’m well aware of that, but the Bank doesn’t discriminate between losses created by drug-crazed CEO’s who make irrational decisions and squeaky clean CEO’s who make bad decisions. The only way I can give you the twenty million is with a personal guarantee.”
“Franklin, I’m just not in that position right now.”
“Are you telling me you blew the whole fucking thing? You were filthy rich. You had it all.”
Bob was pathetically silent. Garrett threw him a bone.
“Look Bob, let’s get real. No accredited commercial bank is going to provide you an unsecured lending facility. You’ve got to locate non-conventional sources of financing. There are guys out there, like Sol Reinberg of American Reliance Insurance in New York, that’ll take a higher risk in exchange for a higher return. Tell you what, as a favor to an old friend, I’ll call Sol and make the introduction.”
“Thanks,” said a humbled Bob.
“Just do me a favor this time. When you make it back, put something away for your next rainy day.”
*
“AND THE VERDICT IS?”
Michael joked because he assumed Bob had a successful trip with his former banker. He was ready to break out the champagne. Bob assumed Michael somehow learned he stubbed his toe and was sending him up. He was totally pissed.
“Fuck you. Think you can do better, Michael?”
Michael realized Bob’s ego was severely bruised. He tried to back peddle so they could both save face.
“Bob, Bob, easy. Based on your past track record, I assumed it was a slam-dunk.”
“To hell with those West Coast pigs. They wanted an exorbitant interest rate, your two children, and my next three wives,” chuckled Bob, as he struggled to regain his composure.
“Guess we’ll have to find another way,” said Michael, not having a clue.
“Michael. No worries. On my way back from the airport I put in a few calls to my rolladex.”
“Any nibbles?”
“Nibbles? One call. One bite.”
“Who?”
“None other than Sol Reinberg,” trumpeted Bob.
“I thought he was Chairman of an insurance company.”
“He is, but he’s got so much spare cash, he does private investment deals, just for sport. We’ve talked in the past, but nothing ever made sense. ITI barter deals are right in his sweet spot.”
“Sounds like fun. Mind if I tag along for the experience.”
“Normally, I’d say no problem. But this is almost like a personal transaction. I think Sol might smell desperation. Could cost us a few unnecessary points. We’ve got enough complaints about cash flow already, I’d like to make this line as cheap as possible.”
Michael knew Bob was blowing smoke.
                         *
SOL REINBERG THOUGHT OF HIMSELF as ‘king of the real deal.’
Born into poverty, he ruthlessly climbed the corporate ladder to become the youngest president of Reliance Insurance Company. In the process he accumulated incredible wealth through a series of side deals with company vendors.
“Sol, beautiful home,” said Goldstrom.
Reinberg also loved bargain hunting. He bought his modest thirty-four room pre-war Park Avenue apartment at a distress sale twenty years prior, for $271,000 in cash. Now crammed with 17th and 18th Century antiques, mostly repossessed French baroque, the home had been featured twice in Architectural Digest, and was estimated to be worth around $24 million, not including furnishings.
As they toured the opulence, Bob and the flamboyant Reinberg became instant buddies in bullshit. “This bronze was created by Rodin in 1859,” Reinberg said, “ a few years after ‘The Thinker.’ Exquisite isn’t it?”
“Marc was right. You’re collection is exquisite,” said Goldstrom awkwardly trying to establish credibility.
Sol knew precisely why Bob was there. He smelled blood. The price would be outrageous.
“Sol, by any chance do you know an old friend of mine, Costa Marvas, in Monte Carlo?”
“Know the name. But we’ve never met. Why?”
“He’s also a Rodin aficionado. Recreated Rodin’s entire studio, as it was, in his home. I’m guessing he has a dozen originals. Your bronze got me to thinking.”
“Did he pay retail or wholesale? asked Reinberg.
“Wholesale? Unlikely,” said Bob. “ We’re talking world class art.”
“That’s bullshit, Bobbie! Everything can be bought for wholesale. Just gotta have the eye, some cash and two big ones,” said Reinberg generously flicking his cigar ashes on the 16th Century Persian Nain rug in the study. “Boys, how about a little Armangac?” Reinberg dropped huge pours of a 1924 vintage into oversized brandy snifters like he was doling out Budweisers.
“So Bobbie what have you got for me? Franklin said something about needing lines of credit.”
“We’re in the excess inventory business, we find deals, buy them and creatively re-market the stuff, based on mutually agreed guidelines. We…”
“Bobbie cut to the chase. I know from excess. I like the business. I’m the guy who bought the DeLorean car inventory and all the extra parts when John’s dream blew up in smoke. What a jackass! Making U.S. luxury cars in Ireland. But what the hell. We sold a ton of them to antique car collectors on the basis of futures. Would you believe those dumb buffs paid more than the original retail? Antique DeLorans? What nonsense. How much is an antique Studebaker or DeSoto worth today? I’ll tell you…squat, nadda. Except to those dumb buffs.”
Reinberg, like Bob, loved to hear himself talk.
“What do you think was you’re best inventory deal?” asked Bob who really didn’t care.
“That’s easy, hands down---the Andrea Doria. We pulled that sucker up out of the deep for bupkus, then made a fortune selling everything on the ship, including the junk! The free publicity from the salvage activity gave people the impression they were buying Titanic memorabilia. One guy paid twenty-five grand for a pocket watch. Why the question, kid?”
“Sol, I think we have some inventory deals, signed or on the drawing boards that might rival your best. In fact, we’ve signed so many contracts that we’ve exhausted our credit lines. We’re looking for a financing partner.”
“Not a problem. Just get me the inventories and what you pencil the deals to be worth. I’ll review the stuff with my Board and get back to you with a specific proposal.”
“Any estimates on how long your internal process might take? We’ve got some pretty tight time tables,” said Bob.
“Bobbie, not to worry. I own eighty-four percent of the stock. Is a twenty-four hour turn around quick enough?” smiled Reinberg condescendingly.
Back at the Seagram’s building bob declared victory, “Michael, consider the credit line issue solved. Bring on the deals!”
“I’m impressed,” said Michael who meant it.
“As I suspected, Reinberg is my kind of guy. I wish we were dealing with businessmen like him all the time. They’re so much more predictable and rational than the Nachman’s and Tothson’s of this world.”
                                                                       *
THE INVENTORY SPECS WERE hand-delivered to Reinberg that afternoon. As promised, twenty-four hours later a financing proposal was sitting on Bob’s desk. Unfortunately, the terms were beyond outrageous: first return of principal, eighteen percent fixed interest and thirty-five percent of the net profits of each deal.
“The bastard’s a crook!” said Michael after looking at the terms.
“Michael,” said Goldstrom calmly, “Let me ask you a question. What options do we have? Either we accept his terms or scale back dramatically and drop the value of your stock fifty to a hundred million. I’d like to be there when you tell Sandra that!”
Bob posted Phil…with his own spin.
“Michael and I have reviewed Reinberg’s terms. To be honest, they’re a little steep but at least we’ll get through this window,” said Bob. “I figure once we’ve got the inventory, we can renegotiate. He won’t walk away with all that money on the table.”
Phil performed some quick math.
“Bob, based on Sol’s terms I don’t see how we can make any profit. The only benefit would be some positive cash flow assuming the resale estimates hold.”
Bob knew he couldn’t blow off Phil. His round two acquisition chases, the massive Barter Bank legal fees, his high-roller corporate style and the Melrose contract negotiations had plunged the Company into a precarious cash flow position, far more desperate than Michael or Scarborough were aware. As the CEO and defacto CFO he managed to keep the real numbers quiet by hiring a low-level finance manager, Johnny Reilly, who wouldn’t say boo without checking with Goldstrom first.
“ Phil, you make a good point. But, with all due respect I knew that. I figured we’d agree, then just renegotiate once we start to draw down the line. He’ll have to play along.”
“Bob, deceiving somebody like Reinberg can be dangerous. Suppose he tells us to stuff it.”
“Phil, I’ve been through this a hundred times. Sol will understand. In business, nobody actually means what the say. Everybody lies. In the end, it’s just a matter of what you think is fair.”

##########

Chapter 25.
Backstabbing and Squealing

      SCARBOROUGH, INCREASINGLY CONCERNED ABOUT protecting Whitlaw & Company and its investors, insisted Bob hire an experienced chief financial officer. Because Bob fancied himself New York reigning ‘master of numerical manipulation,’ he attempted to delay the inevitable. The acquisitions had CFO’s, the high cost of recruiting, the importance of staying close to the business. Eventually Bob ran out of lame excuses.
“Bob, an obvious source of recommendations has to be Croft Rockman. They certainly know the terrain and their referral might even save you the fifty grand in headhunter fees.”
“Reasonable point. I’ll call Tony.”
“Why don’t you and Michael identify a few candidates you like?” said Scarborough. “Then I’ll interview the finalists prior to making an offer.”
Bob noticed Scarborough’s insertion of Michael, further supporting his instinct that lines were forming in the sand.
LaMantia felt obligated to assist his client, although he was concerned about a inserting a ‘friend of Rockman’ into the ITI hornet’s nest. The increasingly strained relationship between Bob and Michael, the personality quirks of the acquired owners and the complex income recognition issues with the SEC were not for the faint of heart. After considerable soul searching, LaMantia identified one candidate, Jerry Singleton, a technically skilled CFO with his own baggage. Recently, the Rubbermaid Corporation, a multi-billion dollar consumer goods conglomerate and Rockman client had dismissed Singleton. The official reason: the new CEO wanted his own guy instead of a holdover from the previous administration. Fairly standard corporate America nonsense. But LaMantia knew better. Singleton was a politically adroit and a ruthless, self-promoter with a proclivity to switch allegiances when it suited his purpose. The unsubstantiated rumor was that he got canned after implying to the Board that his CEO was involved in ‘personally profitable’ misconduct. As the story went, Singleton even had the balls to offer himself as the interim CEO solution.
LaMantia chose to accent the positives with Bob. “I’ve given your needs a lot of thought and I think I’ve come up with the ideal candidate. He’s technically proficient and street savvy, a combination rarely found in corporate CFOs.”
Bob could care less. He saw the candidate as interim fodder. Somebody to placate Scarborough until Melrose officially came on board and picked his own guy. “Great, can’t wait to meet him,” said Bob.
Singleton was charming, gracious, non-threatening, jovial and articulate. Early fifties, slightly balding, Calvin Klein mini-glasses and baggy suit and shirt.
To amuse himself, Bob probed Singleton’s technical prowess. “Jerry, as you may be aware, we are mired in some very contentious, income recognition issues with the SEC.”
“Harold Bridges and his group at the SEC can be a contentious lot,” said Singleton smoothly. “But in my prior dealings, I’ve found it’s very much a matter of how you approach the subject. Under the regulations guiding the income recognition of non-cash transactions, sec 433 B and 507A of the code, there is plenty of room to negotiate on barter credit reserves and such.”
Bob was impressed, thinking maybe he had actually stumbled upon a ‘flexible’ CFO. “Jerry, after talking for an hour, it’s patently obvious you know your shit. So why did you get canned?”
Singleton smiled and began to speak softly, raising his eyes at the appropriate moment for punctuation. “Bob, as you can see, I’m a pretty damn good financial guy. But I’m not a politician. I figure, do the job, be loyal to your boss and everything else will take care of itself. Right? Well you know the story. New guy comes in and wants his own man. I have no idea how to maneuver through the minefield. But it’s okay. My exit package was fair. I think the new guy felt guilty. Follow me?”
Bob decided he’d found the guy both he and Melrose could direct, so he launched into a dissertation about the Barter Bank, Marc Melrose, and the opportunity for founder’s stock in the spin-off. Singleton saw dollar signs.
Bob was politically obligated to have Singleton meet Michael but he wanted Singleton to know the ground rules. “Jerry, assume I am going to make you an offer. But to keep peace in the family, I need for you to meet my junior partner. Understand?”
Singleton loved the situation. Two guys trying to fuck each other and the chance for him to make a score.
Unlike Bob, Michael had done his homework. He knew Singleton was a political animal that had probably charmed the pants off Bob. After twenty minutes of the usual questioning—work history, strengths and weakness, career interests, Michael made a political blunder.
“So I understand your exit from Rubbermaid was rather tumultuous?”
Singleton saw no reason to make nice to Michael. After all Bob was THE MAN. “Said who? That’s a potential libelous query,” said Singleton playing a game of mental Chess.
Michael moved his Bishop into position. “Oh, you think it’s unusual to check the background of someone applying for a high profile job?”
Checkmate! Game over! Singleton pissed!
“So, what did you think?” Bob asked Michael after Singleton left.
“I think we should interview a few more candidates. With his baggage, he’s not going anywhere.”
Bob switched to steamroller mode. “Well, I disagree. He’s eminently qualified. Frankly, this is an area where I have scads more experience. I’m going to make him an offer.”
“Didn’t Phil ask to meet the finalists?”
Michael had made another faux pas. Bob never had a conversation with Phil about the subject in Michael’s presence. Another example of fucking shit going on behind my back, thought an infuriated Bob. “Michael, let’s be fucking clear about something. I’m the CEO. I make the final calls.”
Michael just moved on. He couldn’t win that argument. Not today.

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