The Collectibles (18 page)

W
hile Preston, Alex, Casey, and Joe were having breakfast at the Sheraton coffee shop, Lou Barenzo, the bank's CFO, was already meeting in his office with Paul Olsen. Lou, focused on the numbers, Paul, on operations, were locked in argument.

“We've got a meeting this afternoon, and you and I have got to be together before we go in there.”

“You don't get it, Lou. The reason you have the SOT is because of operational issues. If the bank lets these dealerships go forward without turning the faucet off now, we'll have more SOT because there's no controls in place. If we put our own people in place in the stores, then we'll know precisely what we've got.”

“Hart wants us to transfer the SOT in Charlottetown to the capital loan and then increase it by five hundred thousand, secured by consolidated first and second mortgages. If you believe the MAI appraised value, we've got a ratio of 90 percent on the mortgages. Are you willing to loan the money and accept that risk?”

Paul looked at his notes. “I understood Hart to say that Houston is sitting on a lease with an option to purchase at a fixed price that can be sold for more. So the sandwich is 6.4 million in gross proceeds, just from the equity in the real estate.” Paul walked to the board and spelled out what the store could be sold for, the payoff of the cap loan, and ultimately how the bank is paid back. After several hours, they managed to find common ground, agreeing that the bank would be in an improved position.

“Don't forget,” Lou said, “If Houston's sold, it sure as hell doesn't need four hundred thousand dollars working capital. We should have that money applied toward our debt. And we're entitled to 10 percent of the equity of that store when it's sold.” So much for common ground.

“I want to forget that, Lou,” Paul said. “I'm going to clearly recommend this afternoon that BNA waive any interest it has in the equity kickers. I don't know who drafted those documents, but it's a hornets' nest. This is a good opportunity to get out of it clean.”

“We don't have to give up the four hundred thousand!”

“The store needs working capital until it's sold. Let's leave fifty thousand in for working capital and take 350 thousand and apply it to debt.”

And so it went for the rest of the morning.

 

The afternoon meeting was convened by Bobby Bower at two-fifteen in the large conference room. The first item Bobby brought up concerned Manhattan Mercedes. “I'd like some straight answers on what really happened with the sub-lease, Sally.”

Sally explained the pressure she was under from the real estate department to make Wilson extend the sub-lease, and that, while it made her uncomfortable, she got Wilson to go along.

“Well, there's nothing wrong with that!” Floyd Ritter said.

“There's a lot wrong with that,” Tom jumped in, his face red. “But it happened. Let's hope we don't have to defend ourselves over that someday. Let's turn to Hart's plan. Lou, where are you and Paul?”

“We're essentially in agreement. We can't approve the plan in its present form. We don't agree with the proposed numbers. We feel it would be an error in judgment to allow these businesses to continue with incompetent management, confirmed by Wilson's own expert, Alex Herman,” Barenzo said, turning to Paul.

“If we did do the plan,” Paul interjected, “and Wilson sold Houston, I for one do not think we should take 10 percent of either the real estate or the store.”

“That's totally naïve,” Floyd Ritter said, having had a part in drawing up those documents. “In any event, I think it can be fairly said at this point,” he said, standing up, “that the bank does not have an affirmative vote from either of you gentlemen, you cannot buy into this plan. Tom, I move we reject the plan, and give White & Polk the green light to proceed with foreclosure and TROs immediately.”

“Sit down, Floyd,” Tom said. “I appreciate your input, as always. Let's go a little slower. What do you think, Bobby?”

“I'd like to ask Lou and Paul a couple of questions. It seems to me that your objection is to the incompetent management going forward and that you don't trust these folks. Correct?” Lou and Paul both nodded. Bobby continued, “Let's suppose, for argument's sake, that there was a strong management in place, and that the management could be trusted. Would you then accept Hart's plan to get us paid back? I don't want to be in real estate or the car business.”

 

After two more hours of debate, Tom returned to his office, had a long talk with Terry Perkins, and placed a call to Joe.

“How you doing, Joe?”

“I'm fine, Tom. How is Wilson doing?”

“Joe, here's where we are. We like your program and appreciate all the work you have put into it. We can't approve your program, however, loaning more money with the knowledge that Wilson lacks competent management that can be trusted to run the businesses going forward. We believe to do so would be irresponsible. That's our biggest problem. You know I wanted this to work, and so does Paul, but it is not within our control to get over this hurdle. I'm sorry.”

“I understand,” Joe said. “You're a good man, Tom. Let me ask you this. What kind of management would make the difference to you?”

“Well, as one of the guys said today, and don't quote me on this, your own expert was pretty clear in demonstrating how incompetent the people in Wilson's stores are. In fact, he even said he would fire a couple of the GMs. Wilson needs a man like that. Somebody Preston Wilson can trust and we can, too. Wilson needs a real powerhouse right now, with the experience and the ability to make all the things happen that are called for in your plan. Hell, you know it, Joe. It all comes down to execution.”

“I agree,” Joe said. “Suppose we could find a man like Alex, with all his horsepower and experience. Does the bank really want to throw away this opportunity to get back on track and avoid all the expense and pitfalls of going forward through the minefield if Wilson had a man like Alex to get the job done?”

“No, we don't,” Tom replied. “If you could produce a man like Alex immediately, I can bring the others around and we'll go forward with the deal. There would be a few changes in the numbers, and your operating capital amounts would not be as high, but essentially, your plan would work. Where are you going with this, Joe?”

“It's not where I'm going, Tom. It's where Wilson and the bank are going. And it's a good place. Preston has already cut a deal with Alex Herman, who's willing to leave Atomic Motors and join Wilson as vice-president, general manager of operations and COO, reporting directly to Preston. He's also going to have 15 percent of Wilson's stock, and Casey will have 15 percent as well. Preston is totally committed to turning this business around. He meant every word of what he said to you yesterday. Admittedly, there's a lot of work to be done, issues to be resolved. But you now have before you not only a plan, which you like and believe can work, but also the strong management to make it work, and the ability to trust that management.”

“Damn, don't you just keep stirring the pot. I'll give you a call in the morning.”

“Thanks, Tom. Call me in Braydon, please; my work here is finished, and I'm going home.”

 

“Come in,” Preston said to Joe as he opened his door. “Sorry,” he added. “I was on my computer catching up on my e-mail. How are things going? Have you heard anything?”

“I spoke with Tom,” Joe replied. “Have you spoken to Alex?”

“I talked with him in the car last night on the way back here. He spoke with me at breakfast and again about an hour ago. He's with us, Joe, if we have a chance.” Preston smiled broadly. “I've spoken with Casey as well. He was delighted. I never realized how much ownership meant to him all these years. He's still worried, though.”

“Good,” Joe said. “I am very glad to hear that about Alex, especially since I've already told Tom. I'm happy about Casey, too. He's a good guy.”

“He sure is,” Preston replied. “I think I've taken him for granted. Another one of my mistakes. What do you think will happen with the bank?”

“It's in their hands now,” Joe said. “We've done what we can do. Tom will let me know. I'm done, Preston, and it's time to go home. I've already checked out. I'll try to catch Alex and Casey. If not, tell them I said goodbye and that I'll be in touch. By the way, how are things going with Marcia?”

“Not well. Not well at all. Remember when you asked me to sign all those authorizations and consents?”

“Of course.”

“Well, I showed her your letter. We had a big fight. She was shocked. She had no idea we were in such bad shape. She got scared, especially when I told her the part about getting her own lawyer if she wanted to. She took that the wrong way. I showed her the criminal lawyer's letter and she went over the top. I told her we were going to Charlotte to talk to the bank, and that there was a chance that things could work out. She asked me why she should believe anything I said. I pray that she doesn't leave me. I guess that's my other big workout.”

“Good luck with that,” Joe said. “I assume you're going home now.”

“Yup. Thanks again for everything, Joe,” Preston said, opening his arms to give him a big hug. “Send me your bill.”

“You're welcome. I'll talk with you later.”

 

After dropping Casey off at his apartment in Murray Hill, the taxi driver delivered Preston to his Trump Towers condo. Preston waved absently at the doorman and hurried to the elevator. Eager to see Marcia, he was sure she would want to know what was going on. He wished he had shared more with her about his situation, but he'd soon take care of that.

He was happy to be home, back to his familiar surroundings. He put his bag down in the foyer and went into the den looking for Marcia, surprised that she was not at the door. He had called from LaGuardia and left word on her voicemail, telling her that he'd landed. In the past, he would have just come home. Not finding Marcia immediately, he roamed around the eighteen-room apartment, calling for her. Silence.

Finally, he went into the kitchen and checked the refrigerator to see if she had left him a note on the little magnetic pad she kept there. The pad was wiped clean, devoid of even the customary shopping list. He walked into the den, picked up the remote and turned on his 72-inch flat screen plasma TV, settling into his Italian leather easy chair with his feet on the ottoman. He surfed a while, but nothing held his interest while he waited for Marcia to return.

She's probably yakking with one of the neighbors,
he thought.
Or picking some things up at the 93rd Street Deli.
He decided to take a shower, freshen up, and change into comfortable clothes. When he finished, and Marcia still had not returned, he grabbed his bag, threw it into the closet, and slammed the door.

Preston wandered around the apartment and, as he went by the front hallway again, he saw a small white envelope sitting on the antique credenza under the mirror next to the empty basket where Marcia usually put the mail. He picked it up, noticing that it was Marcia's personal stationery and that the envelope bore his name. He opened the envelope and took out and read the one page it contained.