Due Diligence: A Thriller

by Jonathan Rush

  Stan knew where the bodies were buried. Some of them. The chances of someone finding them in a week of due diligence in Louisiana Light’s books were close to zero. But not if that person was told where to look.

  He didn’t know why he said he was Deep Throat. That was kind of corny, but it just came out. And then the names, the two names, they came out as if it were the most natural thing in the world. And the agitation and trouble he had felt went right out of him with them.

  Stan closed his eyes as the lawyers and accountants jabbered behind him, still feeling the metal of the shelf against his brow. He felt a kind of peace. It was done now. He had done what he had to do. Now let whatever would happen happen.

  31

  The flight landed at JFK. They got a cab straight to the office and were there by three. Sammy and Phil Menendez were waiting for them.

  “Well?” demanded Menendez. “What’s the story?”

  “Looks okay,” said Cynthia. “No big surprises. They’re rather bullish on the British and Australian markets, and they’re expecting to double their cash flow on their Indian plants in the next three years, which is probably somewhat too optimistic. I can’t see why it’s going to happen.”

  “Fucking data room business plans,” muttered Menendez.

  “It’s no big deal,” said Rob. “The entire Indian operation is less than fifteen percent of their revenue. The overall variance is only a couple of points.”

  Sammy glanced at Menendez. “We’ll run scenarios.”

  “What else?” demanded Menendez.

  Cynthia shook her head.

  “Nothing? You sure? Nothing I should know about?” Menendez looked at Rob. “Huh?”

  “Nothing,” said Rob.

  Menendez glanced at Sammy. “Check this out, right? You know what to do. Make sure they get on with it.”

  Menendez left.

  “What’s been going on, Sammy?” asked Cynthia. “What was the holdup?”

  Sammy explained as much as he knew, although he wasn’t aware of the exact details of what had been happening, and he realized it. “Anyway, looks like they’ve agreed now. Announcing Friday week. Mike Wilson raised the offer to fifty-fifty stock and cash.”

  Rob and Cynthia stared at him.

  Sammy nodded. “You should’ve heard the Shark when he found out.”

  “I’m glad I didn’t,” muttered Cynthia.

  “No one’s happy about it,” said Sammy. “Wilson didn’t need to do it.”

  “Why did he, then?” asked Rob.

  “Who knows? Funny things happen to people when they want to cut a deal. The need takes over. Deal fever. Gets the better of them. They lose perspective.”

  It didn’t get the better of Andrew Bassett, thought Rob. He had just walked away with an extra … what was it? Two billion in cash.

  It just kept getting better, he thought. It just kept getting better and better.

  But by now Rob knew more than to say what he was thinking to Sammy. He was pretty sure Sammy was aware of what had happened between him and Pete Stanzy. Something in the look Sammy had given him the morning after that encounter suggested he’d been informed. Menendez had probably told Sammy to let him know if there were any more problems. Rob figured there was nothing Menendez would have liked more than to hear that there were.

  Just focus on your work, that’s what Sammy would say. Just as Sammy did himself. Do what you’ve been told to do and don’t ask questions that don’t concern you. Besides, Sammy didn’t have the answers. Not to the questions Rob had.

  “You guys look beat,” said Sammy.

  Cynthia nodded. “We worked all night. I’m glad we did, though. The lawyers were all over the files when we got out of there.”

  “Rob?” said Sammy.

  “Yeah, I’m pretty tired. But I’m okay.”

  “Okay. Listen up. The priority for you guys over the next couple of days is to recut the models using Buffalo’s data. That’s a scenario with their data on the upside, their data on the downside, as well as our base case and our scenarios. Cynthia, the model’s yours. I suggest you use Rob to get the data together to create the assumptions for the scenarios and anything else you need.”

  “But they’re still doing the deal, right?” said Rob. “This won’t affect it.”

  “Not unless you found a nasty surprise.”

  “And it’s not going to affect the price? That’s already agreed, right?”

  “Right.”

  “So why are we doing this?” Rob knew this kind of question was safe. This was the kind of rookie-type question, Rob had learned, that Sammy liked to hear.

  Sammy explained. “Leopard’s board will need to see this before they commit. It’s part of the due diligence process, shows we’ve tested our assumptions against the target’s. Also, we need to show projections in our document for the bridge loan. I’ve got the ones we’ve done already, but it helps if we can say the scenarios include Buffalo’s own figures.”

  Rob nodded.

  “I’m going to leave it to you. It’s your call. Work as much as you think you need today, then go home and get some sleep. Just make sure we’ve got a first cut of the scenarios by end of day tomorrow.”

  Cynthia looked at Rob. “Keep going?”

  “Sure.”

  They worked until about nine. By then, they were both fading.

  When he left, Rob took his computer with him.

  * * *

  Emmy’s voice on the phone sounded hurt. “I thought you were coming here.”

  Rob had gone back to his own apartment.

  “You’ve got nothing to eat there,” said Emmy.

  Rob sighed. “I’m beat, Emmy. I couldn’t eat anything anyway. We got off the plane and went straight to the office. Honestly, I haven’t slept in forty hours. I’m going to bed.”

  “You could have gone straight to bed here. I made you some food.”

  “Honey, please. I’m beat. I’ll come over tomorrow. I promise.”

  “Like when? Midnight?”

  “Please, Emmy. I’m beat. I’ve got to be in the office at seven. I can’t keep arguing.”

  “I’m not arguing.”

  “Emmy, I’m going to put the phone down.”

  Emmy didn’t reply.

  “Emmy, I love you. I’ll see you tomorrow. I promise.”

  Emmy sighed. “Okay. I love you, too. I just wanted to see you tonight.”

  “I know. See you tomorrow?”

  “Yeah. All right.”

  Rob put the phone down. He reached for his computer. The phone rang again. Rob picked it up wearily, thinking it was going to be Emmy.

  “Hey,” said a voice.

  Rob didn’t recognize it for a second, the tone was so flat. “Greg?”

  “You got a minute? It’s not too late, is it?”

  “Well, I’m just back from…” Rob stopped himself. “No, it’s not too late.”

  “Okay,” said Greg. His voice was listless. He was by himself, he said. Louise and he were breaking up.

  “Where is she now?” asked Rob.

  “She went away for the week. Went to stay with a friend in Boston. We agreed I’d move out by the time she gets back on Sunday.”

  “Greg. I’m sorry to hear that, buddy.”

  “Yeah.”

  Rob wasn’t really sorry to hear it, but Greg was in pain and Rob felt for him. He’d do whatever he could to help him through it. But it was necessary pain. In the long run, Greg would be better off without Louise.

  Rob knew it was too early to tell him that now.

  “You okay?”

  “Yeah … kind of…”

  “Listen, you know you can stay here, don’t you?”

  “Actually, that’s why I was calling,” said Greg. “Did you mean that when you said it?”

  “Absolutely. This is like the first time I’ve been here in a week.”

  “It’s just…” Greg paused. “I think I’m going to need a week or two to get my head together befo
re I can think about finding somewhere new.”

  “It’s fine, Greg. I’ll make sure the place is ready.” Rob looked around the living room as he spoke. The place hadn’t been cleaned since the subletters left. On the other hand, it had hardly been lived in, either.

  “Don’t do anything,” said Greg. “I’ll fix it up.”

  “No, it’ll be fine. Listen, we’ll get together on the weekend and I’ll give you a key. When did you say you have to be out?”

  “Sunday?”

  “You need help?”

  “I can manage.”

  “I’ll help. Okay, that’s settled.”

  “Thanks, Rob.”

  “One thing, though.”

  “What?”

  “Don’t thank me, huh? That’s a condition. You don’t need to thank me.” Rob paused. “Okay, we’ll talk. Sunday, right?”

  “Right.”

  Rob put the phone down. He opened his bag. Finally, he pulled out his computer.

  Rob didn’t know exactly what the man in the data room that morning had been trying to say. He didn’t even know who that man was yet. But he knew where he had recognized him from. He had seen his picture somewhere in the pages of Louisiana Light’s annual report. And whatever the man had said to him, Rob knew it was meant to be secret. That’s what he meant by “Deep Throat,” wasn’t it? Deep Throat, the guy who told the Watergate reporters where to look. That’s what the man in the data room that morning had been doing. Telling him where to look.

  He hadn’t had any time on the plane. For seven hours, Cynthia had been sitting beside him. She went to the bathroom once, but that was it. She didn’t even sleep. And Rob didn’t want to do anything to remind her of the man who had spoken to him in the data room.

  The computer booted up. He opened a copy of the latest Louisiana Light annual report. The familiar image of the report’s front cover—the yellow and black Louisiana Light logo taking up the top half, a color picture of a cooling tower at sunset taking up the lower half—appeared.

  Rob didn’t know why the man had chosen him, but he had. And now he could either ignore it or take the hint.

  He gazed at the cover image on the screen. He didn’t have to go further. He could still shut the computer and put it away. It wasn’t too late. He could forget what he’d heard in that room in London and just concentrate on doing his work, like Sammy would have told him.

  Why couldn’t he let it go? Why couldn’t he be like Sammy or Cynthia? He had already raised concerns, which was more than either of them had done. Why did he have to do more?

  If he scrolled down into the report, he knew, he was taking a step he couldn’t reverse. At the very least, even if he did nothing afterward, he was admitting to himself that he truly believed Louisiana Light was rotten. He would never be able to pretend that he didn’t. A person who didn’t believe that wouldn’t sit here, dog tired, after a day that had started forty hours earlier on a different continent, and check an annual report.

  He gazed at the cover. He didn’t have to scroll down. For a minute longer, he continued to tell himself that, as if it were true.

  And then he scrolled.

  He stopped on the directors page. There was the face staring out at him from the screen, the man who had come into the data room. Rob read his name: Stan Murdoch. He’d heard the name before. Stan Murdoch, director of operations. He read his bio.

  “ExPar and Grogon,” whispered Rob to himself. If they existed, where would they be? He had a pretty good idea.

  He moved rapidly toward the back of the report and came to the page listing Louisiana Light’s subsidiaries. He ran through them, name after name after name. The small print on the screen swam before his exhausted eyes. They must have more subsidiaries than Procter & Gamble. And there it was. Grogon. Suddenly the print was very clear, as if he were seeing it through some kind of a magnifying glass. Grogon, incorporated in Hungary.

  He felt a terrible sense of dismay. Even now, even until this very second, he had hoped that he was wrong.

  There were maybe eighty subsidiaries listed on the page. What were the chances that anyone was going to decide to check the details on precisely this one?

  Eighty subsidiaries. Say they were using only one of them to take their debt off the balance sheet and hide it. One needle in a haystack. You’d never find it unless someone told you exactly which one it was. Even then, you’d need an expert to figure out how it was being done.

  He looked for the name of the other company. He went on to the next page. More names of companies. Joint ventures.

  There it was. ExPar.

  32

  Sammy Weiss leaned forward, hands clasped under his chin, gazing at the screen. He was going over about the tenth draft of the document for the bridge loan. Every draft came back with comments from John Golansky, Pete Stanzy, and Phil Menendez, often contradicting one another, all of which he was supposed to incorporate. Rob stole a glance at him. Sammy punched in a couple of words on his keyboard and then read over what he had written, rubbing his chin, frowning thoughtfully.

  Sammy’s phone rang. He picked it up. Rob could hear Phil Menendez’s voice on the other end of the line. Sammy saved the work on his computer, closed the file, and left the room.

  Rob glanced at Cynthia. She kept working. He glanced at her again. The minutes passed. Rob got up and said he was going to the bathroom, hoping that would make Cynthia want to go to the bathroom, too. He came back. She was still there. Go, he thought. Go to the bathroom!

  Cynthia turned around. “I’m going to get a coffee. You want one?”

  Rob shook his head. Then he nodded. It would take her longer if she had to get two.

  As soon as the door closed, Rob grabbed the phone and called up the library. He got through to Libby, who was always the most helpful librarian whenever he had to put in a request for data that he couldn’t get for himself on the Net. He could feel his heart pounding. Any second, he expected Sammy or Cynthia to open the door. He told Libby he had an urgent request.

  “What is it, Rob?”

  “There are two companies I need to find out about. I only have their names. One’s Grogon…” Rob spelled the name for her. “The other’s ExPar.”

  “Grogon and ExPar,” said Libby.

  “That’s right. I need you to get me anything you can find on them as quickly as possible.”

  “Can you tell me anything about them?” asked Libby.

  “No. Just send me anything you can.” Rob was speaking fast. “This is absolutely crucial, Libby. I know it’s short notice, but—”

  “It’s okay. That’s what I’m here for. Do I charge this to your engagement?”

  “Yes,” said Rob quickly. “And Libby, this is ultraconfidential. I’ve been asked specially to do this.… If you get someone else on this number here, no matter who it is, don’t let them know about it.” There were some advantages to working in a place where just about everything was top secret, he thought.

  “Sure, Rob. How do you want this? E-mail all right?”

  Sammy opened the door.

  “Yes, e-mail’s fine. Thanks. I owe you.”

  “Well, we’ll just have to see how we can make you pay,” said Libby.

  Rob laughed, a bit more heartily than was strictly warranted by Libby’s joke, and put down the phone.

  Libby called back during the afternoon. Sammy and Cynthia and Phil Menendez were there. Rob told her he’d call back. Menendez left, but Rob didn’t get another opportunity when Sammy and Cynthia were out of the room together. He left it as late as he could before he took a chance.

  “I was just about to go,” said Libby. “I didn’t know whether to call again.”

  “No, thank you,” said Rob. He tried to sound natural, in case the others were listening, but he felt wooden.

  “I didn’t find much, which is why I didn’t e-mail.”

  “Yes,” said Rob.

  “Rob, can’t you talk?” asked Libby.

  “Not really.”
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  “Shall I just tell you what I found?”

  “That would be a good idea.”

  “Okay,” said Libby. “The only Grogon I could find is some Hungarian company. I believe it’s connected in some way with a company called Louisiana Light here in the States. Do you know that company?”

  “Go on,” said Rob.

  “Well, there does appear to be something that looks from the description like a prospectus, but I think it’s in Hungarian. It’s from a few years back. Took a lot of digging to find it. I couldn’t find any accounts, though. Would the prospectus be of any use to you? I could try to get it, but I couldn’t guarantee it.”

  “If you can,” said Rob. He glanced around at Sammy and Cynthia. They appeared engrossed in their work. “What about the other one?”

  “I found a company registration by that name out of Delaware. Nothing else, I’m afraid, just the bare minimum. I don’t think it’ll be of much help. It’s online, so I could e-mail it if you like.” Libby laughed. “At least it’s in English.”

  “That would be good.”

  “You want me to e-mail it?”

  “Yes.”

  “Okay, I’ll do that now.”

  “Thanks,” said Rob.

  “That’s it?”

  “Yes. Thanks.”

  Rob put the phone down. The others were still working.

  The e-mail hit his in-box two minutes later. He didn’t dare open it there in the war room. When he left that night he took his laptop with him.

  He got in a cab and gave the driver Emmy’s address. As the cab started moving, he opened the laptop. He had left it on, but for some reason now it shut itself down. Rob fired it up again. He watched it as the cab took him uptown, impatiently waiting for it to start.