Closing Costs

by Seth Margolis

  “Did Mr. Gimmel have lunch?” she asked Nanny once she’d put away her shopping.

  She turned away from the television just long enough to chirp, “He didn’t say he was hungry.”

  “It’s three o’clock. I think you might have assumed he was hungry for lunch at some point.” She often heard an uncharacteristic formality in her voice when speaking to Nanny; next thing she knew, she’d be smoking fags and knocking up her husband to serve him bangers and mash, whatever the hell that was.

  “Preparing meals for Mr. Gimmel is not part of my job responsibility.”

  “Preparing…responsibility…” Peggy grabbed the remote and flicked off the television. “What exactly are your job responsibilities?”

  “Looking after the children…”

  “The children are fourteen and fifteen, and they’re in school all day.”

  “…preparing their meals, doing their laundry.”

  “How about housework?”

  “I was getting to that. Tidying their rooms.” She squeezed out a tight smile. “I mean, room.”

  “I think you could find time to pitch in and help out with…with everything. I have my hands full taking care of Mr. Gimmel, and now with three other people in the apartment…”

  “I watched him today.”

  “You…you watched television while he slept.”

  “I don’t think you fully understand the proper role of a professional nanny. Perhaps you and Mrs. Grantham should have a talk.” This last was delivered with a patronizing gentleness that made Peggy want to pummel her pink head with the marble obelisk Lily had bought on one of her European trips, an object whose purpose, until now, Peggy had never quite grasped.

  “Oh, we’ll have a talk all right,” she said, and left the room. Unfortunately, the new apartment, barely adequate for a close-knit family of dwarves, was much too small to comfortably contain two full-sized people who loathed each other. She heard the television spring back to life the moment she left the living room, and even from the bedroom, with the hollow plywood door closed, she could hear the hushed, soap-operatic babble. She collapsed onto the bed, hoping to awaken Monroe—he’d listen to her complaint, even if he wouldn’t respond. But he continued to hibernate despite her commotion, a circle of glistening dribble pooling on the pillow near his mouth.

  Sixteen

  Guy raised a sliver of foie gras-filled ravioli from its bath of silky beef consommé to his mouth. He tasted and felt nothing, as if his mouth were novocained. And this was no ordinary foie gras, if there was such a thing as ordinary foie gras. This was foie gras from Restaurant Daniel, and it cost twenty-eight dollars for a trio of three ravioli the size of postage stamps. He took another bite. Still nothing.

  It wasn’t his taste buds. If only it were that simple. It was the company—not his company, though the state of Positano Software was worrying enough to numb all five senses. It was the company at the table, five men, including himself, Positano’s largest shareholders and most influential directors. These were the venture capitalists who had invested in Positano when it was still a private company. The dinner was a quarterly ritual.

  And it wasn’t that he didn’t like the company. The four men—Dan Radakovic of Sycamore Partners, Marc Gaiman of Sunrise Investments, Alan Norbertson of Greystone Ventures, and Pete Tallyrand of Apex Unlimited—were intelligent, perhaps brilliant. Visionary was the sobriquet most often applied to them in fawning articles, and all articles about them, even post-bubble, tended to fawn. Only the Colombian cocaine trade generated a higher return than these men had delivered to investors over the past decade. Their success was the stuff of investors’ most lubricious dreams, obscene returns that could be calculated only in exponents: a thousand percent in two years, fifteen thousand percent in four years, 104 percent in seven years. A mere (choose any small denomination) invested with (pick any one of their firms) back in (insert any year prior to 1990) would today be worth more than the GNP of (name any smallish African country)—this was the gist of most articles written about these men. When Guy had approached them five years back, he’d been genuinely impressed by the incisiveness of the questions they’d asked about Positano’s product and business model. They had zeroed in with laser acuity on both the company’s shortcomings (a single product with only a handful of installations) and its opportunities (first-mover advantage in what everyone agreed was a huge fucking market). Just having them as financial backers had given him a huge credibility boost; more important, they’d introduced him to their other portfolio companies, several of which had become Positano’s earliest customers. Synergy, it was called at the time, when the fortunes of these businesses were on the rise and one plus one equaled at least three. (Today, with returns dwindling to nothing, and survivability the watchword of the day, what had once been labeled synergy was now referred to, in the financial press and among increasingly pesky regulators, as double dealing.) On the IPO road show, Guy noticed that when he got to the slide with the logos of the four venture firms, investors nodded, eyebrows arched, pens began scribbling on the covers of prospectuses. If it’s good enough for Sycamore, Sunrise, Greystone, and Apex, I’m in!

  But these quarterly dinners, which had once had a celebratory, self-congratulatory spirit, had become more and more gloomy. The fact that they were invariably held in one of New York’s most expensive restaurants only heightened the gloom, underscoring a “Let them eat cakiness” that Guy found increasingly hard to swallow. Literally. He so despised these events that he couldn’t taste the food anymore. His suggestion to hold the meetings over sandwiches and sodas in Positano’s boardroom, however, fell on horrified ears.

  “We’re concerned that you’re burning through cash too quickly,” said Marc Gaiman of Sunrise. Gaiman was a portly thirty-something with a bushy mustache and beard. He was fond of floppy bow ties and hounds-tooth check jackets, always with a silk handkerchief flouncing from the breast pocket, and he smoked a pipe whenever he could, and whenever he couldn’t, as in Daniel, he held it in his plump, manicured fingers, amusing himself and irritating everyone else with incessant reaming and tamping. Based in Burlingame, in Silicon Valley, he got away with a studiedly Victorian affect because he’d been the nineteenth employee of Cisco, a status worth about fifty million dollars in stock, most of which, following retirement at age thirty, he’d pumped into Sunrise Investments and promptly quintupled. With that kind of wealth you could look like Prince Albert’s gay footman and still get your calls returned.

  “We’ve reduced our monthly burn by twenty-four percent,” Guy said. Henry Delano had spent most of the day in his office, prepping him with the numbers he’d need to survive dinner.

  “Black at CSFB thinks you’ll run dry in nine months,” Gaiman said.

  Ray Black “followed” software stocks for Credit Suisse First Boston. Every fall since the bubble burst, he released a list of companies that he felt would need new capital to survive. The Black Death Watch, it was called, and its predictions had proven uncannily prescient. Positano had been on the most recent list.

  “He’s maintained his ‘buy’ recommendation,” Guy said. He took a sip of the Côte de Rhône that Gaiman had ordered for the table on the solemn advice of the sommelier.

  “Everything is a buy for them,” observed Dan Radakovic of Sycamore Partners. “A lot like my wife.”

  When the dutiful chuckling subsided Guy felt the unamused heat of four pairs of eyes.

  “We’re still ramping up,” he said. “We’re in growth mode. We’ve laid off twenty percent of our workforce, and that was painful. A lot of those people were with us from the beginning. They were counting on their options to pay for their first house, their kids’ college tuition, their…”

  Guy registered the blank expressions of his investors, for whom layoffs were just another financial strategy, like issuing warrants or pre-paying taxes, men for whom human sacrifice would be an acceptable means of achieving positive cash flow.

  “If we cut any deeper, we
’ll hit bone. The fat is gone from Positano Software.”

  “Twenty percent,” Radakovic repeated. He swirled his wineglass before a lit candle and observed the swishing Côte de Rhône with such anxious intensity, he might have been expecting it to explode or, at the very least, reveal tomorrow’s NASDAQ close. “Twenty percent. Alan, how many heads did FizzGig chop last month?”

  FizzGig was a hot Web design firm. Make that formerly hot. Alan Norbertson’s firm had been an early-round investor, along with Radakovic.

  “Half,” Norbertson said. At fifty he was the elder statesman of the group and an éminence grise of sorts in Silicon Alley, just forty or so blocks south of Daniel, where he was widely considered an expert on the content side of the technology business.

  “Half!” Radakovic said, as if this were news to him. No company would axe fifty percent of its workforce unless its financial backers had ordered it. FizzGig (NASDAQ symbol FIZZ) had gone public five years ago at $15, shot up to $36 the day it priced, and peaked at $248 eighteen months later. The last time Guy looked, it was trading at a buck seventy-five, barely enough for a tall drip at Starbucks. “Half is tough, but these are tough times.”

  For some of us, Guy wanted to say. Radakovic and Norbertson had sold big chunks of their holdings in a secondary six months to the day after Fizz-Gig’s IPO, about a million shares each at $165.

  “We’ve looked at every single Positano employee,” Guy said.

  “How about R&D?” Radakovic asked.

  “We told the Street we’d have a new release early next year. We won’t make that if we cut anyone in research. Don’t ask me to eat our seed corn.” Guy cringed, but as no one at the table seemed disturbed by his use of the New Economy cliché, he decided to lay on another one. “We’ve plucked all the low-hanging fruit. The next big sales won’t come as easily without a new release and a crack sales team.”

  Waiters deposited plates of artfully arranged entrées before them. Guy glanced at his selection, two tiny, gleaming squabs nestled on a pillow of truffled mashed potatoes, their spindly legs thrust defensively in the air, and felt his stomach heave.

  “How about administrative support?” asked Norbertson, a forkful of scarlet lamb loin dangling before his parted lips.

  “We already laid off half our back-office staff,” Guy said. He attempted to pierce one of the squabs with a fork, sending it sliding across his plate as if revivified and splattering droplets of dark truffle sauce on his shirt. “Believe me, if I could cut anyone in administration, I would in a second.”

  “Guy,” said Pete Tallyrand. He raised his nearly empty wineglass, and for a brief, hopeful moment Guy thought he might be proposing a toast to the hardworking, visionary CEO trying to hold together, nay grow, his company following a disastrous technology downturn that would have overwhelmed a less talented, persevering executive. Instead he thrust his head back and flung the remaining wine into his gaping maw. “We’re worried that you’re too close to the situation.”

  “Sometimes an outside perspective is beneficial in situations like these,” said Radakovic.

  Guy heard someone utter “forest for the trees” but had already retreated to a panic zone in which once-unimaginable scenarios played across his mind. Were they thinking of replacing him? Holy God, half the tech companies on the NASDAQ were run by professional managers, many of them former management consultants, while their founders, the true visionaries, were shunted aside in satellite facilities and given titles like Chief Technology Officer or the egregious Director of Innovation, rarely invited to key meetings or cc’d on important e-mails. Once in a while he saw these castoffs at investor conferences, on those occasions when they were allowed out in public, skulking on the periphery of meeting rooms and cocktail parties like parents of child stars, trying to look engaged but pitifully aware that, though quite wealthy, they’d been rendered obsolete once they’d weaned their prodigy—never mind the difficult pregnancy, the excruciating labor, the long, lonely nights when it was just them and their offspring, beset by fatigue and insecurity. If Guy ever doubted that it wasn’t all about the money, he had only to think of these set-aside founders, latter-day Croesuses all of them, but utterly miserable.

  “…PriceWaterhouseCoopers or Lansdale, Bucks & McKinney. Is that acceptable? Guy?”

  “I’m sorry, I…”

  “Dan was suggesting that we retain a consulting firm,” Alan Norbertson said. “We were thinking of either PriceWaterhouseCoopers or Lansdale, Bucks & McKinney. I had good experiences with Deloitte & Touche, too.”

  “Are you sure they haven’t merged?” Guy asked. “Picture the letterhead: ‘PriceWaterhouseCoopersLandsdaleBucksMcKinneyDeloitte&Touche.’” When this elicited shrugs rather than smiles, he added, “A joke. I was making a joke. Actually, I feel that we’re executing on our strategy just fine. All we need to do is ride out this recession—have they declared it a recession yet?—and then when the recovery happens, we’ll be back to double-digit growth, triple digit, if the recovery is as robust as some people, economists, are predicting.”

  “We’d like to send over a consultant,” Tallyrand said somberly.

  Guy noticed that his was the only plate with food left on it.

  “A fresh set of eyes,” Radakovic said.

  “Lansdale, Bucks & McKinney worked miracles over at Periforma,” said Norbertson.

  “Miracles?” Periforma Software Solutions, which enabled companies to file highly complex regulatory forms online, had cut three-quarters of its staff and shuttered all but one of its offices before being sold to a financial printing company in Long Island City. “The only miracle is that Lansdale, Bucks & McKinney, to cut costs, didn’t line up Periforma’s management team and execute them by firing squad.”

  “We’d just like to send someone over to have a look,” Radakovic said, waving to a hovering waiter. “Who’s ready for dessert?”

  “Just give me three months,” Guy said.

  “Are you finished?”

  Fortunately, this was uttered by a busboy. Guy nodded and the squabs were taken away.

  “We have no choice, Guy. These are tough times.”

  “I hear the rhubarb tart with crème fraîche is out of this world.”

  “Tough times call for tough measures.”

  “Last time I had the trio of chocolate desserts.”

  “When the going gets tough…”

  “Too bad we didn’t order a soufflé when we sat down.”

  “Just hear what the consultants have to say, Guy. We know you’ll be impressed.”

  Seventeen

  Lily caught her reflection in the brass elevator doors of 11 William Street. Dark glasses despite the late-night hour, silk scarf wrapped around her head and tied under the chin, gray flannel trousers, midcalf raincoat, hands shoved in the pockets as if clutching a pistol. Greta Garbo as Ninotchka, she thought, briefly gratified, though in fact her right hand clutched the plastic card that Barnett had been issued for after-hours access to the office, but never mind.

  After signing in with the night attendant, careful to write so illegibly that only a pharmacist could read the signature, she checked her watch: 11:45.

  A single overhead light cast a milky fluorescence over the windowless reception area on the sixteenth floor. She slid the access card into a slot in a small gizmo beside a glass door and heard a dull click as the lock disengaged. She stepped inside for the second time in as many days, doubling the total number of visits she’d ever made to the office, having made a point of avoiding the grubby source of the funds that had financed the co-op, the house, the dresses, the vacations, the charitable donations, the household help, the everything else that had constituted her lifestyle.

  Zelma’s office was vast—his desk seemed a tennis court away from the doorway—and furnished with the same generic antique reproductions with which Barnett had filled his office. Every horizontal surface was piled with paper: reports, magazines, newsletters, brochures, prospectuses. One of Barnett’s tec
h investments, she’d found out after his disappearance, had been a company that facilitated online document management. PaperFree.com, it was called. No wonder they’d lost every penny. If Zelma’s office was any indication, the paperless society was just another investor pipe dream, right up there with the perpetual-motion machine and male birth-control pill.

  She began searching his desk, having no idea what exactly she was looking for. What she did know was that the Feds and Zelma were keeping her completely in the dark—as had Barnett, for that matter. She needed to know more about the charges against her husband, and since no one was telling, she’d been forced to go looking.

  His desk yielded nothing of interest, so she turned to the long credenza behind it. The office was lit by the pale, blue-gray light from thousands of windows of the surrounding skyscrapers, giving her the uncomfortable feeling of being trapped inside a black-and-white TV. She felt at once nakedly vulnerable and reassuringly invisible, suspended in a dense, twinkling grid.

  She was beginning to despair at finding anything relevant when she came upon a file labeled simply BJG. She immediately thought of the monograms on the dress shirts Barnett had made for him at Sulka. Their luggage had been similarly monogrammed, as had the towels in the guest bathroom, the small, tasteful sign at the end of the Southampton driveway, their formal stationery. Their entire joint existence had been branded BJG—why hadn’t that bothered her all those years?

  The file contained few papers. There was a printout of an e-mail sent to all employees announcing Barnett’s “leave of absence.” She scanned several copies of letters from the Federal Prosecutor’s Office detailing the charges against Barnett. One line that caught her attention read “We launched our investigation in response to a request from senior Grantham, Wiley & Zelma management.” The only other papers of interest were a series of photocopies of canceled checks. These were company checks, made out to numbered accounts, in very large denominations: fifty thousand dollars, seventy thousand dollars, one hundred and sixty-five thousand dollars. The dates on the checks spanned six years. The backs of the checks had been photocopied as well, revealing that they had been deposited at a variety of banks in Switzerland, the Cayman Islands, and Belize. The signature on the front of the checks was unmistakably Barnett’s.