Where to begin to break them?
Christine hired a team of CPAs and lawyers to locate and analyze all contracts between the United States military and Blackguard. Reports came in thirty days later. One-hundred and thirty-three thousand such contracts had been located and analyzed and future profits projected and summed. Then the same thing was done with contracts between Blackguard and agencies of the United States. Forty-six thousand contracts were located and analyzed and future profits projected and summed. At this point, Christine knew Blackguard’s projected gross profits over the next sixty months.
The bottom line became clear: if she could de-value the stock of Blackguard to the point where it was worthless on paper and obtained that worthless paper for herself, she would be left with a small warehouse full of contracts that stood to net in excess of one-hundred billion dollars over the next five years.
So the question became: how do we gain control of a super corporation’s stock? She had nowhere near enough resources to do that by herself. She would need help.
So she turned to Pilcher, Rasmussen, Damon, Escard’a and Floe, the world’s largest stock brokerage.
“I want to short Blackguard’s stock,” she told her broker.
“What does that mean, short their stock?” Jamie asked her as he overheard Christine’s phone call with the broker.
So when she got off the phone she explained it to her son.
“Read this,” she told him, and handed him a one page strategy sheet created by her CPA team:
TO: CHRISTINE SUSMANN
FROM: STRATEGY TEAM RE BLACKGUARD INC.
Ordinarily when you invest in stocks, you hope to profit from a company’s good times and rising profits. But there’s a whole other class of investors, called shorts, who do just the opposite. They search the Internet for news stories about diners getting food poisoning at a restaurant, for instance, and look for ways to cash in on the stock falling.
To sell a stock short, you follow four steps:
1.Borrow the stock you want to bet against. Contact your broker to find shares of the stock you think will go down and request to borrow the shares. The broker loans you the shares. Sometimes outside lenders will be needed as well.
2.You immediately sell the shares you have borrowed. You pocket the cash from the sale.
3.You wait for the stock to fall and then buy the shares back at the new, lower price.
4.You return the shares to the brokerage you borrowed them from and pocket the difference.
Here’s an example: Shares of ABC Company are trading for $40 a share, which you think is way too high. You contact your broker, who lets you borrow 100 shares. You sell the shares and pocket $4,000. Two weeks later, the company reports its CEO has been stealing money and the stock falls to $25 a share. You buy 100 shares of ABC Company for $2,500, give the shares back to the brokerage you borrowed them from and pocket a $1,500 profit.
“So you are going to short the stock of Blackguard?” Jamie asked.
“Yes, I am.”
“Do you know the CEO of Blackguard has been stealing? Is that how you’re going to depress the price and make it fall through the floor?”
Christine smiled at her son.
“I can do much better than embezzlement,” she said. “I’ve got murder, torture, theft, rape, pillaging, country-building, anarchy, genocide, and on and on. The list of crimes committed by Blackguard is endless.”
“But how can you prove it?”
“You know the documents you transferred to Hong Kong?”
“Sure, mom.”
“They have been scanned and data-mined. We now have a database for armed conflicts, for infrastructure building, for petroleum mining, refining, and sales, for electric power plants, and—”
“Okay, mom, I get it. Blackguard is into everything that can earn it a dollar. So how does it go broke?”
Christine nodded and closed her eyes.
“Imagine this. Imagine millions of shares of Blackguard stock being dumped on the stock market. All owned shares are sold at a loss. A huge loss.”
“What makes that happen?”
“CNN makes that happen.”
“By doing what?”
“By reporting on Blackguard’s abuses and crimes beginning with the fall of Saigon at the end of the Vietnam War up to and including its interference and war-making and petroleum theft in Baghdad, Pakistan, Afghanistan, and now Syria.”
“Flower sales. Hong Kong flower sales,” Jamie said. His face lit up. “Holy shit, mom. That’s brilliant.”
“CNN has the files as of twelve midnight tonight. At that exact moment they are uploaded to WikiLeaks. At nine in the morning Althea Berenson will be interviewed live on CNN and tell the world about the threat Blackguard has made against her life if the files go up on WikiLeaks. She names names, Edlund and Wilfred DuMont. If anything happens to me, she says, go after these two men.”
“Genius.”
“When the stock prices go through the floor we buy and then return the borrowed shares. With interest, of course. The difference between what we sold the shares for and what we bought them for will be astronomical.”
* * *
Forty-eight hours later, after a massive sell-off of its stock, Blackguard lay smoldering, burned to the ground. The run on its stock had been instantaneous following the WikiLeaks/CNN disclosure. Where the DuMont brothers had once owned stock worth in excess of $400 a share, their stock was now virtually worthless. They could not borrow enough to keep their company operating with short-term cash while the government contracts paid off like the slot machines they were. The government contracts then went into default when Blackguard could no longer perform on them. All work under the contracts came to a sudden and full stop. Government payments dried up. Blackguard officers went unpaid and walked off. Blackguard workers went home without paychecks and didn’t return.
* * *
Thirty days later, Blackguard filed a Chapter 11 bankruptcy case in New York’s bankruptcy court in Manhattan. Liabilities far exceeded Assets. The DuMont brothers were finished. The bright spot: the Blackguard employees had priority claims against the remaining assets of the company and their wages were paid before all other claims. Families were fed and clothed and life continued as usual for that group made special according to the bankruptcy laws that grant priorities to certain creditors. Christine exulted when the bankruptcy trustee paid the workers.
All was well with the people who had actually earned the money for their employer.
And she exulted because Blackguard, along with the DuMont brothers, had gone out of business.
* * *
So…the sisters in law threw a party. A dinner party. It began at eight o’clock on April 15 in Scottsdale at the Branding Iron. Christine had flown her friends to Scottsdale for a shopping spree and makeovers paid for by the DuMont brothers.
During the dinner, Sevi al-Assad announced that she was funding a girls’ school in her home town of Deir ez-Zor in Syria. The DuMonts were paying for that out of her share of the short sale.
Then it was Althea’s turn. She announced that she was funding a mini-Pulitzer annual prize for the best military-industrial reporting of the year. It would be rewarded to five deserving writers on an annual basis, available anywhere in the world, and would include cash prizes of $100,000 per winner. The DuMonts were paying for that.
Winona’s turn came around when the main course was done and cleared away.
“I’m investing in stem-cell research for victims of violent crimes who need organ and tissue repair. I will be the first patient and it will go out from there. Hopefully I can quit wearing this bag that I’ve been married to under my clothes. Oh, and thank you Ed and Will DuMont. Your contribution to our medical quest is applauded.”
During after-dinner coffee it came to be Christine’s turn.
“I am turning over my share of the short sale to Infinite Water. IW is a company I’ve created that is going to begin digging and capping clear
water wells in Ethiopia and spread worldwide from there. The technology is also being created to purify black water.”
The party went on for three more days before ending in Chicago with a Cubs game and box seats along the first base line.
The Cubbies lost.
Unfortunately.
But predictably, blowing a six run lead in the top of the ninth and failing to score in the bottom of the inning.
From his home on the banks of the Potomac River, Edlund DuMont turned off the TV.
“Nationals beat the Cubbies,” he said to his wife, Ginny. “We won one.”
“We did?” said Ginny. “We got a letter today says the bankruptcy court wants to sell our house.”
“We’ll find another house,” growled Edlund.
“With what?” said Ginny. “We have nothing left but the little bit I inherited from my Dad thirty years ago.”
“So we’ll rent.”
“How so? You need good credit. We’re bankrupt.”
“I’ll think of something.”
“Not watching the baseball games all day and all night you won’t.”
“That’s when I do my best thinking.”
“Then do this. Every time one of your players crosses home plate, think ‘home.’”
“Home.”
“As in, we need one or I’m moving in my sister.”
“We could always do that.”
“Who said anything about ‘we’?”
“Well, then.”
“Home, Edlund. Home.”
He would never watch baseball again, not with the same enthusiasm. For every time a run scored he was reminded.
He had no place else to go.
THE END
Also by John Ellsworth
THADDEUS MURFEE SERIES
The Defendants
Beyond a Reasonable Death
Attorney at Large
Chase, the Bad Baby
Defending Turquoise
The Mental Case
Unspeakable Prayers
The Girl Who Wrote The New York Times Bestseller
The Trial Lawyer
SISTERS IN LAW SERIES
Frat Party: Sisters In Law
Hellfire: Sisters In Law
About the Authors
John Ellsworth lives in Mexico with his wife and dogs and guinea pigs. The Pacific Ocean is out the front door and the mountains of La Mision out the back.
John writes books and music. He plays guitar, and his favorite musician is Naudo Rodrigues of Tenerife, Spain.
His favorite book is yet to be written.
* * *
Jode Ellsworth is the sister of John Ellsworth. She lives in Mexico with John and his wife, dogs and guinea pigs. In a prior life Jode was an editor at one of the Big Five publishing houses until she decided to put her own words on the page and see if anybody wanted to read them. They did.
Jode also teaches creative writing over by Skype and she presently counts a dozen writers among her students, many of whom you may have heard of if you read romantic suspense.
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For Our Family
Copyright © 2015 by John Ellsworth
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Reviews
I no longer practice law, for which I am grateful. Lawyering is stressful and always difficult even on the "easy" cases and it will wear you down in a hurry.
Today I make my living by writing my books. As such, your reviews of my books are my lifeblood, as for any writer.
If you could take few moments and leave a review, I would be grateful.
--John Ellsworth
Hellfire (Sisters In Law Book 2) Page 25