Cash Burn

by Michael Berrier

  Behind Jason, the doors drew to a close with the finality of a vault door sealing. Or a tomb. The sound of it made Jason’s stomach wrench.

  He had the bitter taste of bile in his mouth. Air seemed to swirl around inside his head. His heart hammered at his rib cage as if looking for an escape route. His empty stomach was a pestle grinding against the bowl of his abdomen.

  He clenched a handkerchief—the only one he owned. It was damp already, and the meeting hadn’t even begun. With Scotty’s eyes averted, Jason lifted the palmed handkerchief and swept it across his brow.

  Scotty tilted his head back to read through his glasses. He spoke a name, and a lender to Jason’s left began a recital he’d no doubt practiced in front of a mirror all morning.

  Vince had a question about the credit. Mark listened and gave his spin on what he knew about the applicants. Hanson and Granger monitored the tide of opinion before weighing in. Scotty listened quietly as he always did. Soon he would bring this one to a head, and they would be on to the next one.

  For the hundredth time, Jason reviewed the agenda. His Northfield deal was fifth. He would have to endure three more discussions after this one. Then it would be his turn.

  He flipped through his memo. Each committee member had a copy. It contained information he’d cut from other write-ups about Northfield—background needed in every presentation. But what was igniting the butterflies in his stomach was not what was true in the memo. He’d falsified so much in this report that even he as its author was beginning to question what was real and what wasn’t. He’d chosen a European competitor as the acquisitions target Northfield was supposed to buy. Drusseaux Industries. Northfield had battled against them for decades. It was better than using a fictional company. Occasionally some of these committee members got the wild notion to do a little research of their own for a deal, especially a deal of this size.

  He wiped his forehead again. Beneath his jacket, beneath his oxford shirt, beneath the tie that threatened to choke the breath out of him, his T-shirt was as wet as the rags they used at the car wash.

  Every butterfly he’d ever felt before a committee presentation was back—with friends. They fluttered against his stomach wall, a whole flock of them tumbling against one another.

  Swallowing did nothing to remove the bitterness in his mouth. His tongue was dry. A pitcher of ice water beaded into a plastic tray before him. He wanted a drink, but the thought of pouring water into one of the glasses standing around the pitcher—the ice cascading down into the glass and splashing the table, the attention it would draw to him, the freezing water inching painfully down his gullet—was enough to keep his hands in his lap. He clenched the handkerchief.

  In the back of his mouth, his tongue began to cramp. It was the first sign of a threat that he might throw up.

  He had an image of himself vomiting all over the table. That would be a first in committee. He tried to amuse himself with it, but it only made things worse. His throat opened, his stomach knotted.

  He had to get out.

  His cell phone. That was his excuse. He quickly pulled it out of his pocket, pretended to check an e-mail, and turned to the lender seated next to him.

  “I’ll be right back.”

  The lender looked at him with an expression of complete bewilderment as Jason rose from his chair.

  He tapped the phone’s screen as if entering letters as he approached the door like an escape hatch, and then held the phone to his ear as if an urgent call couldn’t wait for the end of the meeting.

  He rattled the door to a close behind him. The chairman’s sphinx of a secretary lifted her goggled eyes to inspect this escapee. He nodded to her and tried a smile with the phone plastered to his ear, ducked his head, and exited the suite. Gulping, trying to forestall the inevitable, he pocketed the device and made for the bathroom like a man on fire. He burst in. The first stall was empty. He had no time to lock the stall door, just leaned over the porcelain and tried to keep his tie out of the way.

  No butterflies came out. Just the remnants of the dry toast and coffee he’d choked down this morning over the protests of a throat and belly wanting nothing inside.

  He spun a handful of toilet paper off the roll and wadded it against his mouth. One hand against the wall, his head ached and swam.

  There was no way he could go back in there. It was hard enough to get a real loan approved. This would be impossible. The questions would turn him into a blathering idiot. He would break down and sob in front of every key decision maker in the bank. The truth would come out. They would escort him out of the building and onto the street. Or worse, they might prosecute him. He could spend years in prison for trying this. What was he thinking?

  The door to the men’s room pounded open. “Dunn!” Vince’s voice.

  Jason lifted his head. “Yeah.”

  “What are you doing? You’re up.”

  The sound of that voice stirred the fibers in Jason’s back, and he straightened. “Sorry. I’ll be right there.”

  “Well, hurry up. It’s costing the bank a fortune with all this talent sitting around waiting for you.”

  The door sighed to a close, and Jason was alone again. Any butterflies in Jason’s stomach lay dormant now.

  Good old Vince. Count on him to remind you why you hate this place more than you dread prison.

  Jason wiped the back of his hand across his lips and flushed. At the sink, the water he swirled in his mouth did little to remove the sour taste, but splashing a bit on his face helped his vacant appearance.

  He stood straight and looked in the mirror. For an instant, he saw the battered face of his brother Philip staring back.

  He shook his head “I’m not him. Let’s do this.” He returned to the boardroom.

  Mark jumped right on him. “Nice of you to join us.”

  “Sorry. Mother Nature.” He managed to get into his chair without tumbling over it and onto the floor. “Do you want a presentation? You all know Northfield.”

  Scotty looked at him with one eyebrow perked. “I’m sure everyone would like to know what you’re thinking here.”

  So Jason launched into it. Like a junior lender, he’d rehearsed this one in his mind for days. A brief nod to the Northfield relationship, their repayment of all debt a month ago after their stock offering brought sixty million onto their balance sheet, the profitability of the accounts over the past year. He even had a figure for how much the bank had made from the relationship since he’d brought it in six years ago. It was a generous estimate, but no one questioned the number.

  Once he was into the monologue, his nervousness settled into a simmering boil. He guided them to page thirteen of the memo, where he’d summarized the cost savings Northfield could expect by eliminating management of Drusseaux and other redundant overhead. On page fourteen he’d laid out the effect of the acquisition on Northfield’s income statement. He floated the expected words, accretive and cash flow impact and ROI, and called the committee’s attention to the detailed pro forma balance sheet in the addendum.

  It was Granger of all people who piped up first. “Can’t we sell down some of this? Thirty million’s a big bite for us.”

  Jason stared at him. Paper-white hair layered over a scalp darkened by hours on golf courses around town, this pencil pusher was usually the last one to speak up. How did he expect to make points with this kind of a question? BTB needed every dollar of loan outstandings after all the payoffs of the past six months.

  “We can try to do that on the back end,” Jason said. “We don’t have time to bring another bank up to speed. Northfield wants to close this thing before the news of it leaks out. They’re already seeing some increased volume in their stock.” This much was true, but it had nothing to do with Jason’s false acquisition.

  Granger flipped through the memo. “We can move fast.”

  With a start, Jason remembered that Granger now ran the syndications group. The income from selling half of this credit to another ba
nk would be a shot in the arm for his group with year-end approaching. But getting another bank involved would expose the whole thing. They would want to meet with management, conduct their own due diligence.

  “No,” Jason said. “This is moving too fast. There’s no time. Besides, if we try to sell down now they’ll think we didn’t have the stomach for it. It would risk the whole relationship.”

  Granger wanted Mark to step in. He looked to him. “We could boost our income on this with the syndication fees.”

  Vince chimed in. “It wouldn’t offset the loss of the interest income on fifteen million.”

  Jason listened to their chatter and nearly laughed out loud. They were actually fighting over who would get the income—income from a deal that didn’t exist. Everyone’s attention was turning from the merits of the credit to what to do with all the money they were going to make from it. Granger wanted the fees from partnering with another bank, and Vince wanted all the income to stay in his group. Their competing interests were so transparent a referee was going to have to make a call.

  Mark spoke up. “We need the outstandings. I don’t want to sell any of this to another bank right now.” He turned to Jason. “But I am concerned these guys are outgrowing us. This is right at our legal lending limit. It gives us no room to do anything else for them. Do they understand that we’ll need to partner with another bank if they need anything else?”

  “Sure,” Jason said. “We’ll get another bank involved after this acquisition’s closed. They’ll understand. The important thing is moving fast for them now.”

  Mark returned his attention to the package. No one had said a word about the quality of the credit since Jason finished his presentation. It was clear that they’d read the memo, but this was a lot of dough. Next to Scotty, the analyst assigned to take down the minutes of the meeting dropped his hands from his laptop.

  “The pro formas look solid,” Mark said. “Both companies are strong on their own. They’ll be even stronger together.”

  Scotty was silent.

  Vince folded his copy of the memo closed. “Well, it’s been a while since you’ve been in here, Jason. Thank God for Northfield, huh?”

  Only Vince could make a win sound like a failure. Jason stared at him across the table and almost wished he could be around to see Vince’s face when the news flashed about his group taking a thirty-million-dollar fraud loss. It would lead to a shakeup. Every gray head around this table would probably roll.

  “Not really much to talk about here,” Mark said.

  Everyone waited for Scotty to call a vote. But his head began to move slowly from side to side. As he flipped the pages of his copy of the memo, Jason saw that Scotty had scrawled all over it. Nothing unusual, but those blue ink marks could have been a judge’s handwritten death sentence for the effect they had on Jason.

  Scotty brought his hand to his face and clenched his mouth. He drew a long breath. His hand returned to the table.

  “I don’t know, guys. There’s something bothering me about this.”

  Mark folded his arms and scowled at him. “What? What’s the problem?”

  Scotty kept shaking his head. “Ever since I read this last night, something . . .” He went back to the memo.

  Jason held back. If Mark wanted this deal done, it was going to happen. The CEO was digging his own grave in front of loan committee and a handful of his lenders, and he had no idea. In a month he would be consigned to a fishing pole. Jason imagined Mark seated on a dock someplace, bare feet dangling in the water, his eyes trained on a line bobbing in the water.

  Mark’s face reddened, the color ascending from the white collar of his shirt and reaching his cheeks before he said, “Scotty, the numbers work. This is a good customer. There’s no reason not to do this deal.”

  Scotty looked over his reading glasses at Mark. “I’m telling you, Mark, something about this isn’t right.”

  “Well, what is it? Is it the pricing? The financial covenants? What?”

  “No, none of that.” Scotty pulled his reading glasses from his face and sat back. From across the table, he stared at Jason.

  Jason’s skin prickled with new eruptions of sweat against a T-shirt already damp. He had to say something to divert Scotty’s thought process.

  “This company’s never let us down, Scotty. They always have a backup plan.”

  “Why do they need to borrow so much? They’re sitting on a ton of cash.”

  “I asked them that. They just want to stay liquid. They think in this market, the more cash you have the more opportunities you’ll have. And it’s a statement to the market when they have the juice to take down a new thirty-million-dollar loan.”

  Scotty rubbed his right hand across his face.

  Mark looked like he was ready to explode. “We don’t have all day, Scotty. If you don’t want to do this deal, I need to know why.”

  “Because my gut’s telling me not to. That’s why.”

  His gut. Jason had gone over every detail of this plan a thousand times. He’d pored over the words and analysis of his memo, deconstructed every logical argument and propped up every invented fact with others until the house stood too tall to topple. But he couldn’t fight Scotty’s intuition. That was beyond debate.

  Mark leveled his eyes at his CCO. “Your gut.” Scotty just kept shaking his head.

  “What did your gut tell you about Innovative? Or Cal Foods? Or Dale Tech? Do I need to go on?”

  He seemed ready to list every problem credit the bank had charged off in the past six months. The analyst taking minutes pounded away at the keyboard. Jason knew Scotty would edit the record later, but that couldn’t take away the sting of being dressed down in front of everyone else in the room.

  When Scotty finally answered, fatigue weighed on his words. “You know those were done under delegated authority. I didn’t sign a single one of them.”

  “And who delegated the authority? You did. What did your gut tell you when you gave authority down the line?”

  “The market turned on us, Mark. None of us saw it coming. Not me. Not you.”

  “But I’m not the CCO.” Mark pointed a finger across the table. “You are. If I made a mistake, it was making that call.”

  There it was.

  Scotty’s eyes narrowed. “All right, Mark. You’ve made your point.” He turned to the analyst taking minutes. The kid looked like he wanted to crawl into his laptop. “New set of minutes.” The kid stared at Scotty, mystified. Scotty smiled his kindest smile and leaned over. “Leave the Northfield minutes open, but open another document, Zack.”

  The instructions shook the kid loose, and he clicked away at the keyboard, and then looked back to Scotty for the next order.

  “Note that the Chief Credit Officer has announced his resignation. Back on the Northfield minutes, put me down as abstaining due to my resignation.”

  Scotty pushed his chair back and stood. He walked around the table to the door. The sound of it opening and closing reverberated in the silence.

  The color had drained out of Mark’s face. From all the way across the room, Jason could hear the muffled creak of Mark grinding his teeth. The CEO looked around him. “Vince, what’s your vote?”

  “I’m a yes.”

  “Granger?”

  “Yes.”

  “Hanson?”

  “Yes.”

  Mark said to the analyst typing up the record, “I’m a yes vote too. So it’s unanimous.” He turned to Jason. Something in the assurance that always chiseled the CEO’s face seemed to shift and quake. He blinked five times.

  Jason didn’t move.

  Finally Mark reached for the Northfield memo and flipped it over. “Get it closed, Jason.”

  56

  In a hotel room in Culver City, Jason inspected the signature. The R and S were the keys to pulling it off. The rest of the letters could be anything, the way they lumped together and trailed away. He compared it to one of Randy Sloan’s authentic signatures.
Perfect. Even the size of the signature matched. And the way Randy wrote CFO on the title line underneath—Brenda had nailed that, too.

  “Looks good.” It had to pass inspection in the Loan Operations department in a few hours, but if Jason didn’t see any flaws, they wouldn’t either.

  Brenda handed him the corporate resolution of Northfield Industries, certifying that the company’s board of directors had authorized the CFO to execute documents borrowing thirty million dollars from BTB. She’d had to forge a series of signatures for this one. Jason compared the scrawl of the corporate secretary and the signatures of the board members the corporation required to authorize a transaction like this. He saw no flaws.

  “You’re talented, lady.”

  Brenda winked. “Practice, practice. Check this one.” She slid the loan advance request to him.

  The LAR contained the borrower’s instructions to the bank to disburse funds on the loan. The sum of thirty million dollars was typed next to the words Amount of Advance. Since most loan advances went into the customer’s account at BTB, the form had a separate box that contained a set of instructions for wire transfers. The instructions in that box directed the bank to send the full amount by wire transfer to the offshore account of Nor-Dru Holdings, a shell corporation Jason had created with the help of a London attorney. The holding company was supposedly created for the purpose of facilitating Northfield’s acquisition of Drusseaux Industries. The attorney was delighted for the opportunity to do some work for Northfield, and Jason had to use all his persuasive energies to keep him from calling Northfield directly. Brenda’s forgery of Randy’s signature on the letters to the attorney and the account-opening documents two days ago had appeared as genuine as these.

  He compared the account numbers. They were accurate.

  The rest of the documents looked right too.

  “Let’s take a look at how our bankers are managing our money.”

  Brenda came around behind him. He’d brought his personal laptop to the hotel. When he gained Internet access through the cellular network, he connected with the account in Nevis he’d primed for the past three weeks with transfers of his personal funds. He’d taken loans against his retirement savings and life insurance policy, and moved that money into the Nor-Dru International Business Corporation in Nevis. Since then, he’d made a series of transfers to other accounts he’d set up in other names in Belize and Panama, everything ultimately ending up in the Swiss account. The banks would have no way of knowing he controlled every one of the accounts.