by Reed Arvin
Henry closed his eyes and stepped onto the moving sidewalk. He was halfway down it when a female voice shattered his thoughts. “Mr. Mathews,” it said, the voice impossibly close. He opened his eyes; Suzie was walking briskly beside him on the main hallway, puffing to keep up.
“Mr. Mathews,” she repeated. “Are you dreaming? You went right past me. I had to race to catch up to you.”
“What?” he asked, surprised. “I didn’t hear you.”
“You were in another world.”
“Sorry,” Henry said quickly. “I forgot Sheldon sent you.”
“Mr. Parker wanted me to deliver you personally. He didn’t want you waiting.”
Henry frowned and instinctively began walking, speeding up the motorized pace. “I take it Sheldon’s stressing.”
Suzie made a face. “Like you wouldn’t believe,” she said. “It’s Centel. He’s called everybody in, even though it’s Sunday. I heard Mr. Parker talking to some of the other staff attorneys, and it was pretty ugly. I’m kind of worried about him, to tell you the truth.”
“Good old B.H.,” Henry said. “Nobody with a trust fund his size can ever really worry, Suzie.”
“So he told you the B.H. story at last? Well, you set a record.”
“What do you mean?”
Suzie shrugged. “Mr. Parker always gives his young attorneys the B.H. lecture sooner or later. The ones that don’t stick around get it sooner. The hard workers get it later.”
“It’s very motivational,” Henry said. “I certainly got the message.”
Henry had carried his baggage on, and Suzie led the way to her car. They pulled out onto the loop for the trip downtown. There was a huge legal brief waiting for him in the car, and Henry reviewed the last week’s events silently while Suzie drove. Sheldon was right to be concerned; the original owners of the company were threatening a formal complaint with the SEC, and the mere rumor of that action had sent the stock down 7 percent in a single day. TE representatives had put a bold face on it, making a categorical denial of any wrongdoing. Nevertheless, they had been forced to suspend trading on their stock after the free fall. If the company were to survive, it was essential that good news precede the reopening. Centel, the object of the takeover, was only a two-hundred-and-fifty-million-dollar company, tiny by Wall Street standards. But the Street had seen much smaller companies grow into billion-dollar giants in a matter of a few months. There was a lot riding on the case, and Wilson, Lougherby and Mathers was entrusted to make things right.
Henry walked into the firm conference room without knocking, Suzie pushing him along. He was dropped into a near-shouting match between Parker and a man Henry didn’t recognize. Henry blinked and looked around; about fifteen people were sitting around the big walnut table, all in expensive suits and looking extremely serious.
“Henry,” Parker said, seeing him enter. “Sit down and we’ll catch you up.” He glanced at the others. “This is Henry Mathews,” he said, “young, but the brightest kid on the team.” Henry walked along the table to an empty chair, feeling hostility from the other, highly competitive attorneys lining the table.
“Gentlemen,” he said, taking his seat and opening his briefcase. “I read the brief on the way in, Sheldon. But I still don’t understand the basis for the complaint.”
“That’s because there is no goddam basis for the complaint!” an extravagantly dressed man across the table shouted. “And the reason there’s no basis for a complaint is that we paid you people a hell of a lot of money to make sure of it.” He stared at Henry as if he were looking at a spoiled piece of meat.
Henry smiled his most calming, nonthreatening smile. “Sheldon,” he said carefully, “would you like to bring me up to speed?”
“Henry Mathews, meet Bob Kramp,” Sheldon said. “President of Technology Enterprises, the entity we constructed to buy Centel. You’ll meet the others as we go along. Here’s the short version. We put together a contract for Bob and TE to buy Centel from its founders, as you know. The deal was complex; options, performance equations, cash, stock, you know the drill. There’s always the potential for problems, but the contract specifically indemnifies our clients from any legal recourse on the matter.”
“So what’s the problem?”
“For starters, the original owners expected to be kept on in their management positions,” Sheldon said. “After the sale, however, Bob and his partners felt the company would be better served with new leadership. So they let them go.”
Henry paused; the contract was vast, but he had seen the provision for the owners to keep their positions and yearly salaries. But he could think of no tactful way to bring the fact up. Instead he asked, “Why not buy them out of their contracts? It would be pennies compared to what’s happening on the Street.”
Kramp mumbled something unintelligible, but Henry could hardly have missed its hostile tone. Parker said, “That’s not an option, Henry. We have to come up with something else.”
Henry paused; his solution was so sensible he couldn’t understand why it wasn’t immediately received. In fact, it seemed impossible that it wouldn’t have already occurred to everyone in the room. The twenty or thirty million it would take to buy the executives out of their contracts was cheap compared with the bloodletting that was happening to the stock. “I’m not sure I understand,” he said cautiously. “It seems like a logical solution.”
Across the desk, Bob Kramp was beginning to tremble. At first, Henry thought he was seeing simple anger. But as the man slowly lost control, he saw something else: fear. Something’s going on here, Henry thought, something everyone’s dancing around. At last Kramp could take it no longer. He blurted, “It’s not a logical solution because we’ve already tried buying them out and they won’t accept.”
Henry was genuinely surprised. “All right, but I can’t see how they have a legal basis to refuse. If they want to take us to court over that, they’re dead in the water. There are hundreds of precedents to voiding employment contracts with buyouts. We would win in a walk. At any rate, even a courtroom is better than an SEC investigation.”
Parker and Kramp exchanged glances, Kramp at last nodding his head with irritation for Parker to speak. “The thing is,” Sheldon said quietly, “getting canned isn’t the only issue.”
Henry perked up; Parker was finally getting to the real heart of the matter. He waited for more, but Parker was hesitating. Henry watched him carefully; Sheldon was rarely at a loss for words. The silence in the room was stifling. After a moment Henry asked, “I take it there’s a difficult issue here?”
Parker smiled. “Just a little touchy. Technology Enterprises wasn’t the first group to try to buy Centel. Orion tried a hostile takeover a year earlier and failed.”
“I know Orion,” Henry said. “Four-billion-dollar-a-year hard-drive company. They’ve got the OEM contracts for three of the largest computer companies in the world. Stock’s getting hammered lately, for some reason.”
“Right,” Parker said. “It was messy, but Centel paid dearly, fought it out and turned them away. Lots of blood on the tracks. TE made a similar offer that was accepted, mainly because the owners didn’t perceive it as a consolidation of the industry. They’re fanatical about their little company, and they didn’t want to be swallowed by a giant. Well, it turns out that Bob and his partners are in the process of selling Centel’s core technology to Orion at this moment. It contains some rather revolutionary ways of storing data that have the potential to turn the hard-drive industry upside down. You can imagine that the original owners aren’t very happy.”
Henry considered; if Centel posessed a breakthrough like Sheldon was describing, the value to a company like Orion would be immense. It would also, however, destroy the company. It was an undeniably quick turnaround, but not unheard of; in the 1980s companies were routinely bought and dismantled if the buyers could turn a quick profit on the individual parts. The original company inevitably suffered, and the tactic had always seemed morally
repugnant to Henry. But it wasn’t illegal. And it didn’t explain why Bob Kramp was sweating bullets across the table from him. Looking around the room, he could see that there was something more to come. “I can see why they’re upset,” he said, “but I think we’re on firm footing. Let them take us to court. You’re the owners of the company now, and if you want to sell to Orion, I don’t see what they can do about it. A company like that obviously has the money.”
Parker shifted uncomfortably in his seat. “Tiny problem is, there appears to be something of an overlap.”
“Overlap?” Henry had never seen Sheldon so uncomfortable.
“In the timing. It seems that a sort of document has surfaced.”
“A document that we dispute utterly,” Kramp said intently. He was really sweating now; Henry could hardly keep his eyes off the moisture beading up on his forehead.
“Of course, Bob,” Sheldon said calmly. “We all know it’s a fake. But the thing is, this document dates talks about Centel between TE and Orion precedent to the sale. It calls into question, in fact, whether or not TE and Orion aren’t connected in some way.”
“An outright forgery,” Kramp growled, openly hostile. “Goddam liars.”
“What do you mean, ‘connected’?” Henry asked.
“A construct of Orion’s in the first place,” Parker said limply. “A way to hide its identity.”
Henry looked at Kramp, then back at Parker. If the document was true, Technology Enterprises would be nothing but a front for the much larger and more public Orion, an elaborate means of reattacking the company without revealing the real buyers. It meant that Kramp and his partners were possibly guilty of fraud. “Before?” he asked quietly.
“Nothing’s proved, of course,” Parker said. “But it does create a situation.”
“Who’s seen the document?” Henry asked.
“Nobody, yet,” Parker answered. “It came as a fax. An Orion number, so it’s internal.”
Which gives it validity, Henry thought. Aloud he said, “I see your problem.”
“A problem with a time bomb attached,” Kramp said.
Henry turned. “How so?”
Parker coughed softly and said, “We received another fax today. A different Orion number, but obviously the same leak. It says that the documents are going to The Wall Street Journal in ten days unless we give them their company back.”
“And when that happens nobody’s going to give a damn about Centel’s stock,” Kramp exploded, “because they’ll be too busy watching Orion’s vanish. And that’s over sixteen billion worldwide, so . . . Jesus . . .”
Henry stared hard at Kramp; he saw the picture clearly now. The real issue was that if Orion were found to have fraudulently obtained Centel, Orion’s own stock would be decimated. And the level of concern that Kramp was showing over Orion’s stock price meant that his interest was more than just passing; it was intensely personal. He had no doubt that Kramp held a substantial amount of Orion, which pushed him further over the legal edge. “I see,” Henry said quietly. He looked at Sheldon, waiting for his partner to say the obvious. If the document was a lie, then there was only one course of action: face it down. Once the facts came out the situation would right itself. If the document was true, however, the men sitting opposite them had violated dozens of securities regulations and were common criminals. At a minimum they would be fined millions, and could possibly serve time. Henry had to assume that Wilson, Lougherby and Mathers couldn’t possibly represent them knowing that fact. He sneaked a glance at Parker; his partner was certainly an enterprising man, but he had to assume that willingly representing crooks was beyond even his ambition. He needed to believe it, because, having worked on the original sale, the firm could well have been dragged into the crime itself. Technology Enterprises wasn’t a real company in the traditional sense; it existed only on paper, a legal construction of the law firm so that the sale could be made. Any improprieties meant that the firm itself was in up to its neck. Parker didn’t look as surprised by things as Henry would have preferred. “Do they want something?” Henry asked. “I mean, this is a kind of blackmail, right?” Parker leaned back in his chair and refused to look at him. “What are the terms?” Henry asked, pressing. “What do they want to go away?”
“There aren’t any terms,” Parker said at last. “Just give them back the company. That’s it.”
Henry looked at Kramp; the man’s face was an utter stone wall now, implacable. “Then there’s only one thing to do,” Henry said. “Face down whoever this guy is. Call his bluff. Since it’s a lie, he can’t prove it’s true.” He smiled hopefully. “You’ll probably end up making a pile of money.”
Kramp leaned forward. “What are you talking about?”
“Simple. First you go public with the accusation. The stock will fall on the speculation. It’s inevitable, and it will be painful in the short-term. But it’s also an opportunity. You buy in at the low, demonstrating your confidence in the eventual outcome. You’re telling the truth, and you’re backing it with your own money. The Street will watch, and when the truth comes out the stock will rocket back up. You could turn twenty, thirty percent in a few weeks. It’ll be like stealing, only legal.” He watched Kramp, hoping for a smile. Instead, the man’s face was flushed, and he was rising from his chair. Instantly his companions rose with him.
“Parker,” he growled, “I want some answers on this thing, and I want them soon.” He pointed at Henry. “And I don’t want to see him again.”
Henry stood, and Parker walked Kramp to the door. “All right, Bob,” he said, “we’ll pull out our bag of tricks. Don’t panic yet.”
Kramp turned at the door and faced Parker. “I don’t have to panic,” he said in a voice of ice, “because that’s what I pay you to do.” He strode out the door, the other men trailing behind.
Parker turned to Henry and waved him over, ignoring the others. “In my office, Preacher,” he said. “Now.”
* * *
“What the hell was that about?” Parker demanded.
Henry sat down opposite Parker’s desk. “My idea seemed reasonable.”
“Were you listening in there?” Sheldon retorted. “How could you have been so naive?”
“Hammering me without telling me where I went wrong doesn’t help, Sheldon.”
Parker’s voice took on an edgy hostility. “We’re adults. Don’t make me spell it out.”
Henry sat silently, not wanting to reach the conclusion inexorably moving through his mind. But he could reach no other. He felt a gnawing in the pit of his stomach. Softly he said, “He’s guilty, isn’t he? The whole bunch of them.”
Parker didn’t answer. Instead, he opened a drawer and pulled out a flask and a couple of tumblers. “Secret stash,” he said, pouring himself a drink. He looked at Henry, his expression a bit softer. “You want one?”
Henry shook his head no. “He couldn’t take my obvious solution,” he said. “The last thing in the world he wants is for the real facts to come out.”
“How did you get through law school, Einstein?” Parker said, tossing back a shot.
Henry looked at his managing partner. Sheldon was nervous, almost furtive. It was shocking, given his normally effusive confidence. But Henry took it as a hopeful sign. Parker’s discomfort meant that some inner decency remained in the man; maybe there was still time to avoid crossing an ethical line of no return.
“So what do you propose to do?” Henry asked quietly. “I mean, we obviously can’t go forward on this thing.”
“Everybody gets their day in court, Preacher. That’s the law.”
“Theoretically, yes. But it’s one thing to represent someone you later find out was guilty. It’s something else if you’re positive your client is guilty, guilty in this case of securities fraud on a massive, elaborate scale . . . I mean, Sheldon, we’re possibly complicit in it. We wrote the original deal. We could be subpoenaed, have to prove what we knew when. We would certainly be deposed.”
Parker, who had been leaning back in his chair breathing shallowly, opened his eyes. “How big are your balls, Preacher?” he asked.
“I beg your pardon?”
“You heard me. See, this is a balls issue. That’s the one thing law school doesn’t cover. Balls.”
“It’s an ethical issue, Sheldon. It’s not being complicit in a crime.”
Parker, in an uncharacteristic burst of anger, slammed his hand down on the table. “Don’t give me that sanctimonious crap,” he said, his voice betraying his nerves. “Look, I hate this as much as you do, okay? But this is where the rubber meets the road. We billed over five hundred thousand dollars on this takeover package. Half a million, Henry. And there’s that much again in front of us. So we’re at a million right there. But Kramp can deliver . . .” He paused for another swallow. “Look, Henry, this is totally in confidence, okay? Kramp is giving us Orion once the smoke clears if we handle this. Orion, Henry. We’re looking at a million-dollar retainer, year in, year out. And bringing that kind of business in changes lives, Henry. Not just mine. Yours. I don’t know how you feel about making partner, but what we do seems pretty goddam clear to me.”