by A. Turk
“What about Cattleman?” Donna asked.
“Not interested; too much debt. Just get Garcia down here. I think we’ve found our man.”
Arrangements were made through McCormick for Dr. Garcia to visit the office two days later. Nichols picked up Garcia at the airport and drove straight back to the office. During the tour of the facility, Garcia explained that the existing treatment rooms were legally inadequate to accommodate the types of procedures that he anticipated would be performed. Garcia also made a list of all the equipment that would need to be purchased and installed.
Nichols hadn’t realized that in order to perform cosmetic medical surgery at his office, there would have to be substantial structural changes, such as a new ventilation system. Fortunately, in the back of the Tudor were an oversized parking lot and a storage-garage building that could be reconfigured into a medical surgical suite.
During the five-hour visit, Garcia suggested that the most efficient way to meet the ventilation requirements was to build a new surgical suite onto the back of the building in the existing parking lot. Garcia reasoned that Nichols needed his existing three treatment rooms for his own patients. Garcia argued that the construction and equipment cost could be recouped in less than two years.
After Garcia left on the last flight back to New York, Donna and her boss were alone. Nichols asked her to speak freely. Without reservation, Donna did. She thought he was arrogant and overly confident.
“He hasn’t spent a day in private practice, and he’s telling you that we’d recoup hundreds of thousands of dollars in two years.”
She was far less impressed than Nichols and told him so. He tried to defend Garcia’s requests: “We knew we’d be buying new equipment. He couldn’t use our existing dental equipment to perform medical surgery.”
“I understand, but to demand we build a new surgical suite instead of ventilating an existing treatment room …”
“He didn’t demand anything. He suggested that in the long run, it might be more economical to build the suite right rather than modify the existing room, which I needed for my patients anyway.”
The heated conversation ended badly, with Nichols asking Donna to price the equipment list and get bids for the construction of the surgical suite.
Donna wasn’t happy with the directions she was given.
CHAPTER SEVEN
TOUGH NEGOTIATIONS
Monday, November 13, 1995
David Barton Harrelson, based in New York City, was the Garcias’ family attorney. At $800 an hour, he catered to the rich. He was a fixer and a deal maker. On the surface he appeared polite, but underneath he was calculating and ruthless. He was proud that he was cunning, and he was more than willing to cut corners to get the job done. He farmed out the heavy lifting, such as litigation, but always remained in the background pulling the strings.
Harrelson was short, only five feet seven, with short brown hair just a tad longer than a crew cut. He always wore a dark pinstriped suit with a matching vest. In the right-hand vest pocket he kept a gold pocket watch, a Waltham, with an eighteen-inch gold chain prominently displayed across his flat belly. The watch belonged to his maternal grandfather. Attached to the gold chain were his Phi Beta Kappa key from Princeton, an Army Distinguished Service Cross, and two Purple Hearts for service as a LRRP in Vietnam. The men of long-range reconnaissance patrols were no strangers to getting up close and personal with the enemy and being successful in tracking them down and killing them in personal combat or calling in artillery. The kill ratio of the enemy by LRRPS was extraordinary. And Harrelson’s group even made it in and out of Cambodia alive. Harrelson didn’t mind killing; he rationalized his actions were for the good of his country.
Later in life, as an attorney, Harrelson continued to rationalize his often unethical and harsh conduct for the good of his clients. He did business around the world. This tainted his ethics since most of the world still relied upon bribery as an effective way to success. Harrelson truly believed that the end justified the means.
In his youth, Harrelson was a badass, and he still was. He was in excellent condition, working out every morning and running marathons in his spare time, which recently wasn’t happening. He knew he needed to make time to stay in shape. He’d do better.
After his stint in the service, he went to law school at Oxford and Georgetown, where he gravitated toward wealthy foreign students who needed someone smart to manage their affairs. He befriended them, and they later became his clients.
He’d met Señor Eduardo Miguel Garcia across a conference table in Prague on the other side of a deal. He impressed Garcia as a tough negotiator and was retained the next day. For the last nineteen years he’d represented the Garcia family in dozens of real estate transactions, four company purchases, and one company sale and provided family members with general legal advice.
Unfortunately over the last three years, several Garcia ventures turned sour. A hotel in Milan was forced to close because of a food poisoning scandal, an explosion and cave-in killed eighteen miners in Peru, and certain junk bonds, purchased against Harrelson’s advice, tanked. The Garcias were still rich by anyone’s standards, but they continued to spend without regard to their financial reversals. Harrelson on multiple occasions advised controlling costs to rebuild the family balance sheet.
Señor Garcia agreed with Harrelson, but he was reluctant to share with his wife, Kiki, and his son, Charlie, their need to stop spending indiscriminately. Señor Garcia and his family loved to play the aristocrats and flaunt their wealth, even as it diminished. Harrelson bit his tongue and kept the decaying secret, under the attorney-client privilege and as a friend. His loyalty only reinforced his relationship with Señor Garcia, and in private he was allowed to call him Eddie, despite Señor Garcia’s aristocratic airs.
Señor Garcia was deeply proud of his Spanish bloodline. His wife, who brought the original fortune to the marriage, was the niece of Batista, the Cuban president-dictator. Her family fortune sailed to Miami before the Castro revolution.
Harrelson was sitting behind his mahogany desk on the sixty-fifth floor of his 4 Park Avenue office staring out the twelve-foot-high wall-to-ceiling windows when his secretary broke his train of thought because of a call from Charles Garcia.
“Hello, Charlie, I’ve been waiting for your call. I guess you’ve read the deal memo I sent your father about your employment contract and the other documents.”
Harrelson liked Eddie, but his son, Charlie, was a major pain in the neck. Charlie learned his self-importance from his father, but at least Eddie was a successful businessman. He’d known Charlie most of his life, and the kid had been trouble since he was fifteen. Harrelson was forced to resolve one scrape after another. The kid was a revenue source for Harrelson but also a headache. He could be counted on to screw up at least every six months.
With Harrelson’s help, Charlie was admitted to Princeton, his alma mater and, with the Garcias’ money, to Columbia Medical School. The kid was smart enough, but he was also a spoiled brat who used bad judgment and cared only about himself. Harrelson warned Eddie that he needed to be less indulgent, but wealth has its privilege. Charlie proved his point.
“It’s only $400,000. It’s no big deal. Nashville would be a perfect place for me to grow my practice. I need you to get on a plane with my parents and get it closed.”
Who the hell does this kid think he’s talking to? thought Harrelson. I don’t even let my clients who pay me disrespect me like that.
Charlie may have been right about Nashville, but Harrelson didn’t like the new terms and contingencies that this country lawyer, Benjamin Davis, insisted upon. He’d turned the tables on Harrelson. It started off fine with a handwritten term sheet drafted by Charlie and the dentist, but Davis complicated the transaction.
The term sheet read:
Base salary without board certification—$150,000. An increase in base salary with board certification—$200,000.
No bonus until eq
uipment and renovation costs have been repaid to practice from profits.
Bonus after repayment of costs, one-third of revenue above $600,000 per year generated by Garcia.
Nichols will give Garcia one percent of the practice as part of employment.
Three-year honeymoon period. If Nichols agrees that Garcia is a good partner, Nichols will give Garcia nine percent of the practice, increasing Garcia’s ownership to ten percent.
Nichols over the next four years will sell the remaining ninety percent of the practice to Garcia for an agreed-upon price based on market value, to be agreed upon after honeymoon period.
That handwritten term sheet was given to Davis to draft an employment document. The proposed contract included conditions never addressed in the term sheet, which imposed cross obligations on Charlie and his parents if the honeymoon period went badly. Davis’s documents required that if Charlie failed to complete the three-year employment term, Charlie was restricted from practicing medicine within a fifty-mile radius of Nichols’s Nashville office for two years. Such a non-compete clause was not uncommon but was never discussed between the parties.
In three telephone calls, Harrelson first tried to get Davis to eliminate the provision, then shorten the time period to six months, and finally to reduce the radius to ten miles. At first Davis was adamant that the provision remain as written, but he eventually agreed to a radius of ten miles.
Harrelson’s other major concern was that Charlie’s parents were required to guarantee Charlie’s performance and put up collateral equal to Dr. Nichols’s cost to construct the surgical suite and purchase the new equipment to perform medical surgeries. That guarantee was more than $400,000. Harrelson argued that Davis’s insistence on the parents’ guarantee was unreasonable and that Davis was taking advantage of the fact that Charlie Garcia was a member of the golden sperm club. To his credit Davis didn’t deny Harrelson’s claim, but he wouldn’t budge.
Harrelson decided it would be best to try to improve the deal when he got to Nashville. Harrelson knew that Charlie was personable and good looking. He hoped that Charlie could capitalize on his rapport with Nichols, who might override his attorney.
Harrelson outlined his proposed strategy with Eddie Garcia on the plane. The limo ride to downtown Nashville took less than fifteen minutes. The group checked into the historic Hermitage Hotel, where Minnesota Fats, the legendary pool player, once hustled nine ball.
From the Hermitage it was a short walk to Davis’s office in Printer’s Alley. A tall, stunning blonde in her mid-twenties met Harrelson and the Garcias in reception. She was dressed professionally in a black pantsuit and white top. Despite her conservative dress, Harrelson could tell she had an impressive figure, and he observed that his young client also took notice. Like Charlie Garcia, she had deep blue eyes; her hair was short but businesslike. Harrelson thought she looked a lot like the actress Sharon Stone. Harrelson’s radar went up. If this beauty was Davis’s attempt at distraction, it was working.
“I’m Sammie Davis. I’m currently in law school at Vanderbilt. My uncle Ben will be handling these negotiations. Welcome to Nashville,” Sammie said with her beautiful smile as she shook hands with each of them.
Harrelson watched the younger Garcia make his move. “You’re much too beautiful to become a lawyer. Are you a junior, and can you dance and sing?” asked Charlie.
“I’m Jewish, but so was Sammy Davis Jr.; he converted. I’m not black, and I can kinda sing and dance. My mother just had a twisted sense of humor.”
They all laughed, and the tension eased. They followed Ms. Davis into the conference room.
Harrelson watched Charlie watch the young law student. He didn’t like what he saw.
Davis and Nichols were already in the conference room, and introductions were made. Charlie and Nichols had already met when Charlie visited the practice after his telephone interview.
Harrelson thought Davis turned all business rather quickly, but they were there to make a deal and sign the papers.
“Mr. Harrelson, have you reviewed the last redlined version of the documents that I faxed you?” asked Davis.
Harrelson confirmed that he’d received and reviewed the employment agreement, promissory note, guarantee, and security agreement. Harrelson then asked, “Aren’t you making this transaction more complicated than it needs to be? Why should Charlie’s parents guarantee the cost of equipment and construction of a surgical suite? Dr. Nichols owns the building. It’s his property that’s being improved, and if Charlie fails to perform, Dr. Nichols keeps the equipment.”
Harrelson knew Davis’s reasons why, but he thought it worth forcing Davis to explain.
“It’s simple. Those costs are incurred only because Dr. Nichols is hiring Dr. Garcia. If he quits or is terminated for cause within the three-year honeymoon period, Dr. Nichols must recoup his $400,000 investment. Dr. Garcia has no assets to secure the cost of these expenses. He’s an empty shell. The Garcias are another story. All we’re asking them to do is stand behind their son and guarantee his performance. Bottom line, if Dr. Garcia does what he promises, there is no risk or cost to his parents. However, if Dr. Garcia breaches the contract by quitting or is terminated for cause, the Garcias pay up.”
Davis’s explanation of the transaction and challenge to stand behind Charlie’s performance worked, and Señor Garcia nodded his agreement. Harrelson backed off on that issue.
Davis and Harrelson discussed the specifics of the documents. They argued over the definition of termination for cause. Harrelson kept arguing that the definition was vague. Davis refused to concede the point although Harrelson knew that Davis wanted it as broad and vague as possible. After much debate, it was defined as “acts and omissions including gross neglect of duties, suspension or revocation of medical license, bankruptcy, conviction of a crime, including a misdemeanor of moral turpitude, alcohol or drug abuse, or any misconduct that would damage the reputation of the professional corporation.”
Harrelson questioned what Davis meant by damage to “the reputation of the professional corporation.” Davis explained that Dr. Nichols spent more than twenty years building an unsullied reputation. He argued that if Dr. Garcia were to sexually harass an employee or do something in a similar manner, he could damage Nichols.
Harrelson asked, “So that wouldn’t include professional negligence then?”
“We’ve got malpractice insurance for that. This provision is to protect the practice’s reputation. It’s pretty standard language.”
The employment agreement included the compensation package in the handwritten memorandum. The corporation agreed to pay Dr. Garcia’s malpractice insurance, health insurance, dental care, and continuing education and provided for three weeks of paid vacation. The agreement also gave Dr. Garcia one share of stock, or one percent in the new professional corporation named Nichols & Garcia PC.
It was agreed that the Garcias would deposit in a new account $400,000 of bonds to secure the transaction. The promissory note and guarantee provided that the bonds could not be sold or transferred from the account without Dr. Nichols’s release.
Davis then asked, “The Garcias speak, read, and understand English, right?”
“Mr. Garcia has command of English, but Mrs. Garcia’s understanding is limited.”
“That’s a problem. We’ll need to get these documents translated into Spanish.”
“I can get that done,” Harrelson offered.
“No offense, I’d rather hire my own translator.”
Harrelson accepted Davis’s position, and it was agreed that Davis would redraft the documents in English, which then would be translated. The revised documents would be messengered to the Hermitage Hotel the next day.
The Garcias shared that they planned to sightsee, and they had dinner reservations at Jimmy Kelly’s, a well-known steakhouse. Charlie planned to go out after dinner to the Bluebird Café and hear some good country music. It was writers’ night, and every so often an establish
ed country star would show up to perform and test new material.
Charlie addressed the younger Davis, “Will you join us for dinner, Sammie?”
Harrelson observed that the young woman blushed slightly but quickly responded, “Why don’t we wait till we have an executed transaction before you make those dinner plans?”
Harrelson couldn’t have agreed more. He thought, She’s a sensible young woman, business first.
Not to be discouraged and confident that the transaction would close, Charlie ended the meeting by saying, “I’ll see you tomorrow night then for dinner after our little deal closes.”
CHAPTER EIGHT
HOUSEWARMING
Thursday, November 23, 1995
Peter Nichols was a happy man. The paperwork was executed, and Dr. Charles Juan Batista Garcia would soon be making him a lot of money. He’d also be able to breathe again. After Garcia got rolling, he and Helen were going to take a long cruise. He needed a vacation.
The Garcias didn’t waste time. Within days of the closing, they bought their son a beautiful home in Hillwood, the same neighborhood where the Davis family lived. Nichols was excited about Garcia’s decision to throw a housewarming party so he could introduce him to the community and Nichols’s patient base. They’d sent out more than three hundred gold-embossed invitations. Nichols helped Garcia make out the guest list—a who’s who of Nashville that included several country music celebrities, Morty, and the Davises.
The staff liked Dr. Garcia, all except Donna Burns. Nichols noticed that Garcia made it a point to ingratiate himself to his co-workers, all of whom were female. He was suave, and he knew it. He brought new life to the office when morale was low because of their long hours.
Nichols was impressed with Garcia’s effort to fit in. It was working; almost everybody seemed happier and accepted him.