By the time the money-raising talks started there had been sporadic fighting between Israeli and Syrian forces on the Golan, with Jordan joining in, and indications from Iraq—with a hint of support from Saudi Arabia—of a reduction in oil supplies to the West. The clearing banks were involved either directly or through subsidiaries with the Argentinian refusal to meet its debts—a refusal the International Monetary Fund and the World Bank appeared unable to resolve—and while Franks’ prospectus was being considered, a national dock strike was declared, further unsettling and tightening the market.
Although he did not have his financing arranged, Franks commissioned the market survey and wrote confirmatory letters to all the officials with whom he had negotiated in both Bermuda and the Bahamas, putting formally in writing his interest to proceed, unwilling for them to read into any delay the difficulties he was having raising cash.
The pressure continued from New York, from Nicky, in a series of telephone calls that finally erupted into an actual argument when Nicky began demanding some sort of timetable, reminiscent of Dukes’ attitude at the initial meeting.
“You know the state of the market, for Christ’s sake!” protested Franks. “I’m not going to be forced into anything until I’m sure.…” Franks allowed the pause, seeing another argument. “If Dukes and Pascara and Flamini are so anxious it makes me wonder if I need any sort of association anyway.…”
“They’re not anxious!” cut off Nicky, from New York.
“They appear to be,” said Franks, enjoying as he always did his supremacy. “You know money’s tighter than it’s been for years. I can’t raise sufficient finance here at a price I consider acceptable. Everyone is too nervous and demanding too high a premium.”
“Dukes and Flamini and Pascara aren’t demanding high premiums,” said Nicky. “And you’ve shown your hand.”
“What hand?” demanded Franks.
“What you intend to establish in the two islands; with the possibility of further expansion.”
“They wouldn’t!” said Franks, immediately recognizing the threat. He had the feeling of being backed into the corner of a particularly small room.
“I’m not predicting what they might do,” said Nicky. “I know they were impressed at your presentation. And I know that if I were an American financier with cash to spare and someone fell out of a deal, I’d seriously consider going on by myself.…” There was a pause, practically to metronome timing. “Wouldn’t you?” Nicky finished.
Yes, thought Franks at once. It was exactly what he would do—what any good businessman would do. Except he wouldn’t be the good businessman doing it, he’d be the loser being put down by the winners, and Eddie Franks didn’t lose. He hadn’t done so yet, and he didn’t intend to start now. “They might have the finance but I’ve got the expertise. What businessman puts his money into an enterprise without some guarantee that it’s going to work?”
Nicky exposed the argument at once. “Pascara and Flamini are property developers,” he said. “Because of what you’ve already achieved, leisurewise, they wanted you. You’re good. But they can always buy expertise.”
Franks had the impression of the particularly small room getting smaller. He said, “You’re not just giving me your impressions, are you?”
Nicky didn’t respond immediately. Then he said, “Pascara and Flamini came through town last week. When I said nothing seemed to be moving, there were remarks about it being too good an opportunity to fall through their fingers.”
“It isn’t falling through anybody’s fingers,” said Franks. “I’ve written letters of intent to people in the islands and I’ve commissioned the detailed survey. Everything is going along as it should.”
“You said earlier you didn’t have the finance,” challenged the lawyer.
This wasn’t how it was supposed to be, with Nicky in the demanding position, thought Franks. “I told you I didn’t have sufficient finance at a price I consider acceptable. There’s a big difference.”
“How long?” persisted Nicky, returning to a time schedule.
“I won’t be locked in,” rejected Franks. Whatever happened, he’d squeeze the bastards out and go it alone. He wasn’t going to be treated like some beginner unsure of the profit and loss sides of a balance sheet.
“So what am I going to tell them?” said Nicky.
To go to hell, thought Franks. He said, “Tell them the truth: that I’ve confirmed the approaches and commissioned the survey. When it’s time to proceed, then I’ll proceed.”
“I don’t think that will satisfy them,” said Nicky.
“I don’t give a damn about satisfying them,” said Franks, letting the anger show. “I’m putting together a business proposition in a businesslike way, not setting up a popularity contest. We had exploratory talks, that’s all. What gives them the right to imagine they’re suddenly running everything?”
“They’re not trying to run everything,” placated Nicky. “And they don’t want to. They’re just out to seize an opportunity when one presents itself.”
“Tell them nothing is going to happen to diminish the opportunity,” said Franks. Not much, he thought.
“I’ll try,” promised Nicky.
There were no further financial approaches Franks could make in England, so he waited for the market to cool. But it didn’t. Because oil is priced in dollars, and oil was uncertain as a result of the Middle East tension, there was a switch from the American currency on the world money markets. To halt the slide the Federal Reserve Board raised the prime rate a full point and when that failed to have any effect put it up by another half percent. Although Britain’s oil independence gave it an edge, the edge was insufficient for complete confidence, and after three weeks the English interest rate was raised by one percent.
Franks received replies to his letters from both the Bahamas and Bermuda, asking for some indication of the timing he considered possible. Franks replied with stalling letters, promising a further commitment after he’d had time to consider the surveys.
Which were a shock, when they arrived. The detailed estimate was at least fifteen million dollars more than he had calculated. It took less than an hour of talks with the assessors and architects for Franks to discover that during the fine-print conferences both island authorities had insisted that the development provide all the accompanying services, which on four sites meant the provision of full road systems.
Franks flew to the Bahamas and argued the survey figure of an additional nine million down to three million—with the island government contributing the remainder—which he considered quite acceptable. And then, when he contacted the vendors from whom he intended purchasing the land, he was quoted $225 an acre higher than the original figure upon which he had based all his assessments. For the Bahamas alone it increased development costs by twelve million dollars, which more than nullified his success in forcing down the services provision figure.
From the Bahamas he traveled on to Bermuda, where he argued the service provision demand for six million dollars down to 1.5 million. And then found the land price had increased by an average of three hundred dollars an acre, adding nine million to his costing. Franks got the first hint of what he suspected from the Bermuda minister of tourism and took a chance, approaching the minister’s principal secretary, conveying the impression he knew more than he did. The secretary didn’t name Nicky Scargo as the man acting for other interested developers. He spoke only of “a New York legal firm.” Franks actually got the name from one of the property owners and then by suggesting it himself, as if he already knew. Although he didn’t need any further confirmation, Franks returned to the Bahamas. It took him three days to get Scargo’s name there. On the fourth he called New York, controlling his anger, not disclosing where he was but suggesting a meeting the following day.
“Where?” asked the lawyer.
“Your office, in the afternoon,” said Franks.
“Shall I call the others?”
; “No,” ordered Franks. “Wait.”
Franks was shown into the lawyer’s office by the inviting Maria. Nicky rose for the accustomed hand-pumping, shoulder-slapping greeting, and Franks waited until the woman closed the door before stopping the man halfway around his desk.
“Cut the crap,” said Franks. “Let’s not bother with the friendliness bullshit.”
Nicky halted in midstride, hands spread before him in a gesture of confusion. “Eddie! What is it?”
“You know damned well what it is,” said Franks. “You set out to screw me. Bastard!”
“I didn’t set out to screw anyone.”
“You negotiated on their behalf behind my back, trying to cheat me out of my own project.”
“Sit down, Eddie,” pleaded Nicky. “Please sit down and let’s talk about it.”
“I don’t want to sit down to talk about anything with you,” said Franks, shouting and unconcerned that he was doing so. “I’m going to go to another law firm and I’m going to explain what has happened and get you reported for breach of trust to whatever body governs ethics here in New York. You won’t fuck me, Nicky!”
“Sit down,” repeated the lawyer. “Please sit down.”
Franks did so, with reluctance. It was going to create a severe breach in the family; maybe one impossible to repair. He decided it didn’t matter.
Nicky retreated behind his desk, sitting and remaining head bent toward it, assembling his thoughts. Then he looked up and said, “Dukes and Pascara and Flamini were my clients before you were: proper business clients, not anything personal, like there is between us. I was acting for them when I brought you together. If I’d intended to cheat you, I wouldn’t have told you on the telephone how they wanted to go on without you. I was trying to keep the project going, involving everyone, by going down as I did to the Bahamas and Bermuda. They’re businessmen, you know that. Hard, tough businessmen whom you couldn’t expect to enter any sort of agreement merely on my say-so and your presentation. Of course they wanted a separate, independent analysis. And could have got it, from any of a hundred lawyers or market research specialists. By doing it myself, I kept control of everything: made sure you weren’t being cheated. Sure I went down. I went down and I saw most of the people and I gave Dukes and Pascara and Flamini the information they wanted when I got back. It was an objective, realistic report. From it they knew I wasn’t showing any sort of bias toward your presentation. That they can trust me to remain neutral—professionally neutral—and because of that trust I would have known if they’d decided to go ahead without you.” Nicky had been speaking with his body forward over the desk, eager to be understood. Now he sat back, enveloped in his large chair, and said, “If that was failing you then I’ve failed you. I’m sorry you think I cheated you, and I’m sorry that you think I’m a bastard. I don’t honestly think you’d succeed on any breach of trust accusation, but if you feel strongly enough about it, then of course you must go ahead. I don’t know how it’s going to be on your side but as far as I’m concerned I’ll try not to let it spread over, into the family. It won’t be easy, but I’ll try.”
Franks had been angry—in the islands and then here in the office—partly from his belief that he’d been made to look foolish, and that part of his anger increased, but aimed at himself now, for being so hasty. It was a perfectly reasoned and understandable explanation. Acceptable, too. “Do you know what it’s achieved?” he said. The effort at continued outrage didn’t quite succeed. He continued, “Every single person whom I’d approached to sell me land has jacked up the price, imagining they can run an auction. Because of what you’ve done the original costing has gone up by twenty-two million dollars at least. And that doesn’t include what I’ve had to concede in extra demands from the governments. That’s another 4.5 million dollars.”
“The landowners will fall back into line soon enough when they realize there wasn’t a contest,” said Nicky calmly.
“Isn’t there a contest?” demanded Franks, unconvinced.
“Not as far as Pascara and Dukes and Flamini are concerned,” assured Nicky. “If you withdraw, then I’m certain now that they intend to go ahead without you. But at the moment they still want to go on with you. That’s what they’ve always wanted. What about you?”
“Me?” said Franks.
“Is there a contest from your side?”
Franks felt a further surge of anger, a feeling without direction. If he made it a contest and the financiers decided to oppose him, then the island vendors would have an auction on their hands. And be able to force the whole project up in price. From his efforts over the preceding weeks and months Franks knew he would have difficulty in raising the initial estimated costs. He’d never be able privately to find sufficient capital to meet the additional demands. And if the other three men were determined enough they could bid up the price anyway, poker players with better hands. Franks continued the metaphor. It was a poker game they couldn’t lose, either way. If he threw in his hand, they would go on without him. And if he opposed them, they’d still beat him. A good poker player always knew when to quit, to preserve his stake for another game. But Franks didn’t want to quit. He didn’t want to admit that he had been outmaneuvered or outbid. Franks said, “It never has been a contest, on my side.”
“So there doesn’t seem to be any cause for us to fall out?”
“You should have warned me what you were doing!” insisted Franks. He was irritated at his own petulance.
“I’ve explained that!” said Nicky with a trace of irritation of his own. “I was behaving in a proper and professional manner on behalf of contracted clients. I would not have been behaving professionally if I had told you.”
Nicky had an acceptable answer for every accusation, Franks conceded. “In the future I want to know what’s happening. I don’t want to have to find it out myself,” he said hollowly.
“So there is going to be a future?”
“What?”
“You’ve raised the money, sufficient for control?” said Nicky.
The price at which it was being offered was still too high, but Franks refused to let the other man know he was bluffing. “Because of what they’re asking for the land, it’s difficult to know now just how much is needed.”
“The vendors will come down,” said Nicky confidently. “Let’s work on the original figures. Can you come in with the twenty-five million for you and Tina?”
“Yes,” said Franks, keeping his cards from being seen.
“And do you want to go on, with Dukes and Pascara and Flamini?”
Franks realized he didn’t have any choice. “I think there would be some purpose in a further meeting,” he said, still reluctant to make it look too easy for the other man.
Nicky got up and came around the desk, not stopping this time. He extended his hand and said, “If I caused any misunderstanding, I apologize. I wasn’t trying to cheat you out of anything. I don’t want to sour what exists between us.”
Momentarily Franks remained seated, looking at the offered hand. Then he stood and accepted the gesture. “Maybe I was too hasty,” he said in apology of his own.
8
The second thoughts were almost immediate, the awareness that he’d overcommitted himself and should, if he were sensible, back away. But he didn’t. It had become so important for him to be the consummate businessman in the eyes of Nicky and his father that those reflective second thoughts at once clashed with his refusal to appear unsure or hesitant to them, to risk even the suggestion of Enrico’s childhood accusation that he wasn’t the best. So he flew to Britain to get the necessary finance, although the price was high. He spread the loans through five institutions—four banks and a pension fund—and at varying rates, the lowest eleven and the highest fourteen.
It was three weeks after the confrontation with his brother-in-law before Franks returned to New York. He traveled alone and took a hotel room in the city, at the Plaza, which was his favorite. He flew the Concorde
, so there was no jet lag, but he gave himself an intervening day to revise and prepare himself for the encounter. He carried the preparations as far as timing his arrival so that they were assembled and waiting when he entered the conference room. They were seated exactly as they had been on the earlier occasion, Nicky as nominal chairman, Dukes to his right, Flamini to his left, and next to Flamini the blind Pascara and his obedient son.
Nicky guided the meeting, going detail by detail through the professional survey and assessment before Franks spoke up, pointing out that the extra cost came from the landowners’ belief they had two prospective buyers. Nicky at once deflated the criticism, suggesting that if they agreed to a proper company formation, he proposed to write to everyone whom he’d approached, officially withdrawing his interest. Dukes improved on the suggestion, saying they should time their approach to coincide with the lawyer’s rejection, when the owners would be eager to conclude the original sale rather than risk losing any purchase at all. Franks had the impression of being an onlooker instead of a participant in the discussion.
Pascara introduced the independent assessment that Nicky personally carried out, and for another thirty minutes Nicky dominated the discussion, with more detailed figures going beyond the costing to a forecast of profit. Franks immediately attacked the assessment as overly optimistic. The forecasts were based upon every complex being completed on time and almost at once achieving an occupancy of seventy-five percent. Franks said that if they went ahead they should anticipate minimum building delays of six months beyond whatever finishing date was given, and that in the first year they should consider themselves lucky if they managed fifty percent occupancy. Franks supposed he should have warned the lawyer in advance of his criticism, but he had reached the conclusion only the previous night and he wanted to achieve supremacy in the discussion. “I think we should prepare ourselves for every complex staying in the red for two years,” he concluded.
To Save a Son Page 4