Surface

by Stacy Robinson

  “No.”

  “Okay, good.” He leaned back, tilting his chair on two legs. “If you’d like, I can make a few calls to make sure you’ve got no liability here. And I know the business writer for the Boulder Daily Camera. Maybe she can get us a little more information about Mr. Kessler’s clients.”

  The reassurance she had been hoping for from Richard was woefully lacking, and she found herself slouching deeper into her angst. “I don’t want to tip anyone off to . . . anything, though.”

  “It would be good to connect the dots on that one, just to make sure Michael really is one of his clients. But we journalists can be clever, despite our occasional missteps in footwear.” He clinked her glass and winked. “Don’t worry.”

  “This is giving me an acute case of indigestion.”

  “How ’bout I look through the info you’ve got at home after lunch? Maybe with a better sense of the big picture, I can come up with some suggestions.”

  “I was hoping you’d tell me that I may have misread things and that it’ll all be just peachy. But, yes, I’d appreciate your business expertise. There’s a lot I could use help deciphering.” She pushed her glass and chips away. “If it’s not too inconvenient.”

  Richard waved off her concerns and took out his cell phone to call his friend at the Boulder paper. And as Claire listened to him restate the basic facts—confidentially and in the dispassionate manner of a reporter—it became painfully obvious to her that there was no rearranging them into a less ugly design. Richard then conferred with someone named Hilly in the legal department before signing off with a genial, “Owe you one, pal.”

  “Okay,” he said, taking a hearty swig of his drink. “The good news is that Meg will get back to me by the end of the day on Kessler’s client list. And the other positive is that legal’s pretty sure someone in your hypothetical situation would have no personal liability if Michael turns out to be a crook. Although Hilly suggested getting with a lawyer and untying the knot in the very near term.”

  “That’s on my short list.”

  “This is never easy, Smitty. Especially when you’re dealing with someone playing close to the edge.”

  Claire’s right eye twitched as if irritated by some invisible, unreachable eyelash. “I just want to minimize the trauma to Nicholas, and get out with my sanity and my own bank account intact. You managed that, right?”

  He cocked his head and thought for a moment. “I guess we did. The only nice part about not having a lot of dough is that there’s less to fight over. I basically got Jagger, and Judy got the house and the goldfish. But goldfish get suicidal around me, so that was a no-brainer.” He was trying hard, Claire could tell, to cheer her up. “Lauren was going off to college, which we’d fortunately planned well for. So now we split holidays with her, and she’s doing great. Kids are resilient, Smitty. And they do want to see their parents happy.”

  “Right.” The restaurant music abruptly switched from brassy mariachi to Elvis Costello. She hummed along softly.

  “But I don’t want to gild the lily. The financial negotiations were about as fun as a colonoscopy. Fortunately you get amnesia about it all. Eventually.”

  “Ugh. You’re giving my indigestion whiplash,” she said, folding her head into her hands.

  “Sorry. Let’s change tracks for a momento and assume that Michael has some decency and will want to do right by you and Nick. He may not be able to salvage his holdings, and he may even be in a legal stew, but a guy with his connections and family money is bound to be able to pull something off, no?”

  “Look,” she said, unfolding. “We were merely wealthy, and not obscenely rich like his family is. Note the use of the past tense,” she added with particular emphasis. “But in Michael’s defense, he’s not someone who’d magically found himself on third base and thought he’d hit a triple. His dad’s extremely allergic to handouts. And scandal. Michael has never relied on his family.”

  “Huh, intriguing. The elusive Paul Montgomery’s a cold fish.”

  “You know Paul?” Claire asked, taking fresh and suspicious notice of the journalist across from her.

  “Noo. I’ve had colleagues repeatedly shut out by him, but I’ve got no professional interest in your father-in-law. Cross my heart,” he promised. “My aim is just to make sure you’re okay.” He reached out and wiped the hair from her eyes. “My aim is true.”

  She couldn’t help smiling, and her nerves gradually subsided over what turned out to be a shared appreciation for the clever lyrics of the man on the speakers, particularly as they related to relationships and heartbreak. They had both been Costello groupies in their college days, they discovered, never imagining that their own dreamboats would also turn out to be the footnotes they had sung along to.

  “C’mon,” Richard said, taking out his credit card. “Let’s blow this joint and go see if we can’t find something helpful in all that dirty laundry.”

  Claire followed him out into the bright afternoon and to their cars, and he followed her to the apartment. She squinted through the drive, hoping her pal could just find the right approach for her. Because she still didn’t trust her own instincts.

  Gail and Carolyn had helped her organize Michael’s printed documents into a triptych: Michael’s draft e-mail to Nicky, investment deals, and the QuickBooks logs. She offered Richard a bottle of water and the second two piles with profuse gratitude.

  “Making sense of dirt and questionable business practices is right in my wheelhouse, Smitty.” He slipped on tortoiseshell reading glasses and settled into the couch. And for nearly two hours he read everything she’d given him, in addition to files and e-mails on the computer when he needed supplemental information. Claire answered his infrequent questions for clarification, but generally left him to his digging and note taking, which were peppered with vociferous grunts and mutterings. Mostly, though, he looked as troubled about what he was seeing as Claire felt. She tried to busy herself cleaning her clean kitchen and texting Nicky—who was loving the powder at Winter Park, and hating that he was barely skiing blues. And as she reminded herself to be grateful that her son was back on the mountain and poised to start school again soon, Richard’s cell phone erupted into the dueling banjos from Deliverance.

  “Whatcha got for me, Meg?” he answered, pushing his glasses onto his head.

  Claire sat down next to him and listened to him confirm that New Haven Investments was indeed a client of Flat Irons Consulting, and that Mac Kessler was a well-respected consultant who had joined the firm five months ago.

  “And one more thing. Can you get me some background on a Kimberly Erickson at Janus in Denver . . . ? You’re the greatest, Meggy. Give that daughter of yours a big hug from me.” He set down the phone and rubbed his bloodshot eyes.

  “So?” Claire asked, impatient for the postmortem.

  He exhaled deeply. “I think you’re dealing with someone who’s never found himself striking out, to use your baseball analogy. Guys like this—charming, smart, masters-of-the-universe types—they have enough ego to believe that certain rules don’t apply, and that they can always turn things around and get right back on top with just a few sleights of hand.” He shook his head incredulously. “And the screwing around fits right into the profile. I see this all the time, Smitty. They play fast and loose with everything until—” Richard stopped and stared at Claire’s wilting expression.

  “Until what?”

  “You know.” He made a soft exploding sound.

  She could almost feel the bomb in her head. “God, he’s such an arrogant . . . ass,” she said, sulking into the kitchen. She picked up a dish towel and twisted it into a tight knot.

  “I’m really sorry, Smitty. I wish I had better news for you.”

  “Were you able to make any more sense of this?” she asked, reappearing and flicking the towel at the mess of papers on the couch.

  He nodded somberly, his puffed-up cheeks making him look like a despondent beagle, and he explained that
, according to a marketing report to the investors in the San Diego project, construction on the high-rise had been completed, but due to the collapse of the local real estate market, the units were priced at forty percent above market and all the buyers of their presold units were walking away from their contracts. The bank was calling for an eight-million-dollar capital infusion to avoid foreclosure. As a result, Michael had issued a capital call to the three other investors in the deal for 1.6 million dollars each, in addition to the 3.2 million he would be responsible for as the majority partner.

  “He can save the deal, then?” she asked with a twinge of hope.

  “Theoretically he could pay down principal with the cash from the capital call, service the bank debt, generate additional operating funds to rent up the building to eventually sell it, and preserve their original equity. But one of the investors has done nothing but hedge on sending the one-point-six, Paul is questioning the financials, and the third investor declared bankruptcy and is totally out.”

  “So that leaves Michael holding the bag for how much?”

  “About four-point-eight million, if the two others don’t bail.”

  “There’s no way he’d let the deal tank with his father involved,” she said, trying to process the information. “He won’t disappoint him. And four-point-eight million, he could get that in a heartbeat.”

  “Seems there’s other deals in need of cash, too, but it looks like San Diego and a venture called Wincor Tech were what pushed him to the dark side.” Richard pulled his glasses back onto his nose and took out his notes and launched into an analysis of what he saw as Michael’s Tour de Desperation. On top of having to pony up for his bankrupt partner and cover his own share of the capital call, he explained, Michael had personally guaranteed the bank loan on San Diego for forty-eight million. So not only was he at risk for losing the partnership’s equity in the deal if they didn’t put up the eight million dollars, he could be liable for a whole lot more.

  Claire started pacing in front of Richard.

  “Sit, Smitty. There’s more,” he said, patting the couch.

  She looked at him uneasily before curling into the couch and listening to him detail the Wincor Technologies saga, which for a minute sounded like it held the answer to Michael’s cash-flow problems.

  Michael had been the sole angel investor in the fledgling energy company over the previous two years, and he’d made a deal with a group to come in and buy his majority stake in the company for what amounted to five times his investment. However, a condition of the sale was that Wincor complete the patent process for its proprietary technology. And unfortunately, it seems Wincor’s lawyers ran into a licensing problem with the owner of a small but essential working part of their solar panels, and needed to pay the owner a two-hundred-thousand-dollar licensing fee. Without this license, the patent could not be issued, and the sale would not go through. And additional funds were needed to pay salaries and legal fees while they completed the patent process.

  Claire raised her head, waiting for the next blow.

  “It looks like Michael fought any further investment. But, really, he couldn’t afford not to fund Wincor, given that it had been his baby all along, and given the likelihood of a windfall—which he desperately needs—with its sale.” Richard showed Claire the relevant legal messages from the attorney on the deal, which only made her feel more nauseous.

  “God, it’s like once I started pulling the thread of his secrets, the whole sweater came undone,” she said in a parched voice.

  He handed her his water bottle and gently brushed a piece of towel fuzz from her nose. “The grammar lapses alone on some of his e-mails are grounds for divorce.”

  She laughed a little and rested her head on his shoulders, the scent of his cologne reminding her of licorice. “Okay, you may as well hit me with the rest. What does this dark side amount to?”

  “Well, it was a perfect storm of crappy markets and unfortunate timing. And without much liquidity from what I can see, he had to go somewhere for a quick five mil plus.”

  “The pension?”

  “Yep. And your house.”

  “What?” Her body stiffened. “I saw a loan from Wells Fargo for two million—”

  “Yeah. He mortgaged most of your house for that, Smitty. And what’s troubling—apart from the pension improprieties—is how he could manage that without you signing any loan documents.”

  Silently Claire added up her own mistakes against Michael’s and cursed her inexperience. “He paid cash for it all those years ago, and he probably put the house in his name,” she said, feeling doubly foolish. “I never thought to ask to see a deed.”

  Richard consoled her with the benefits of community property law, which only worsened her mood. Not wishing to be tied to any part of a two-million-dollar mortgage, and exasperated by the financial morass Michael had sucked them both into, Claire asked him for some good news.

  He nodded halfheartedly. “It looks like the Wincor buyer is still anxious to close the deal. But the patent timing is unpredictable at best.” Richard’s cell phone vibrated with an incoming text, which he paused to read. He looked back up. “Bad news is that the assistant at Janus who liquidated the pension funds and wired them to Michael was, not surprisingly, a newbie. And Ms. Erickson will probably be finding herself in some serious hot water.”

  “Nice,” Claire whispered.

  “It’s one flimsy scheme, Smitty. I’m sure he’s banking on the Wincor sale so he can return the pension funds before tax season. But it’s ballsy, and unlikely he can put Kessler off much longer on the records from Janus. I don’t know how he plans to pass this off, ’cause it definitely ain’t kosher.”

  Claire stood and resumed her pacing. “What the hell do I do now?”

  “You’ve got plenty of information to give to your lawyer.”

  “But that amounts to turning him in, doesn’t it?”

  Richard looked at her, confused. “Well, I can check with my pal Phil who did the piece on the pension raider and see what Michael might be up against if this thing blows.”

  “I don’t want it to blow, Richard,” she said, staring at the carpet and chewing on the future. “That’s just it. As much as I hate him right now, I certainly don’t want him to go to jail.” She imagined Michael in a prison-issue orange jumpsuit and felt a brief flash of satisfaction. “Nicky needs a dad. Especially now.”

  “Right. I hear that. And frankly, I don’t understand why he’d be pushing for a divorce in the middle of all this. His malfeasance would come out in the discovery process. Unless he’s even slicker than we think.”

  “Actually,” she said, “he’s been backpedaling, or at least seems in less of a rush to formalize things legally. No need to get a bunch of lawyers involved. Which makes sense now. He’s stalling until he can pay off the debts.”

  Richard advised her to go straight to her lawyer with everything and let him make the call. But still shading in her confusion, Claire wanted to know what Michael’s legal issues might be. Richard made the call to his pal at the WSJ. And the news he got was not inspiring: Michael, as trustee for his corporate pension, had the authority to invest the funds as he saw fit, but zero authority to distribute the funds for his personal use. And doing so amounted to embezzlement, which was a federal crime. Phil suggested that paying restitution would be a start, but no guarantee of avoiding prosecution by the Department of Labor. Much would depend on lawyers, reputations, and other intangibles.

  Claire understood that to a certain degree, her choices would determine Michael’s fate. If she went to her lawyer with the evidence of his actions, Jack would be obligated to turn the case over to the authorities. But if she went to Michael first, providing him the opportunity to somehow get the cash together and return the funds, and then turn himself in, things might turn out much better for him. For all of them. Still, she fretted about how he would get the cash together in a hurry if he hadn’t been able to already.

  “That’s no
t your problem, Smitty. You’re giving him the chance to fix things. That’s far more generous than he’s been with you,” he said pointedly.

  “I know,” she said, fighting the feeling she’d been appointed head of some sinister cabal, and wanting to block the whole mess from her mind. “And I really appreciate everything you’ve done.”

  “All in a day’s work,” he declared with a hopeful smile. “Though I much prefer the company here to my usual associates.”

  “I’d offer to cook you dinner, but . . .” She walked into the kitchen, wanting really to just disappear on the spot. She opened the refrigerator door to reveal a bachelor’s minimum.

  “No worries,” he said, studying the red toes that peeked out from her tailored jeans. “I’ll take my fee in salsa.”

  Claire looked from the refrigerator to Richard. “But I don’t have any.”

  “Dancing, Smitty. One of my favorite Denver joints has killer steaks and a great salsa band on tonight. And we’re going.”

  Richard’s haunt on the west side was right out of Cuba, circa Marlon Brando in Guys and Dolls, its walls dotted with black-and-white photos of salsa kings and tango queens, and still redolent of a smoky past. Claire slid into the vibe much quicker than she’d imagined, appreciating the steak and Malbec, and the general diversion of eating a proper dinner in a restaurant with another human being. But the specter of her future never lurked too far, so she attempted to focus on Richard’s past.

  “We were like Fox News and MSNBC, Judy and I. And the hot-and-cold running squabbles got less entertaining over time,” he told her, sounding jolly and regret-free, and like everything Claire wanted to be. “It was an unnecessarily drawn-out death, and one of us should’ve pulled the plug years ago. But I’m sure I don’t need to point out that your situation’s a little more urgent.”