CHAPTER 27
Houston. Friday, November 9.
Dark clouds had been accumulating and growing on Enerco’s corporate horizon for months. Highly leveraged positions taken by the company’s enormous worldwide trading division had historically been enormously profitable. Lately, however, the division had found itself on the wrong side of more than the usual number of trades, resulting in gigantic mark to market losses. Through the skilled and fraudulent trading and financial maneuvers of Jeffery Wheeler, the company’s chief operating officer, and Andrew Speers, the company’s chief financial officer, the losses had been hidden in offshore limited partnerships. In other words, the financial and trading wizardry, so far, had succeeded in keeping the losses from showing up on Enerco’s financial statements, thereby preserving the wild enthusiasm of Wall Street’s analysts. Their praise for the company’s performance and upbeat projections had kept Enerco’s stock price well above ninety dollars. Investors continued to buy in anticipation of its ascent into the stratosphere.
All of the fraudulent maneuvers had been done with the full knowledge and consent of Ken Layton, Enerco’s chief executive officer. Layton, a brilliant and street smart individual, was aware that Enerco could not continue to hide gigantic losses forever. Like the little boy with his finger in the dyke, it was only a matter of time. He had to move fast. Time had become his enemy. The company needed to increase its cash flow to finance its losses. It needed to acquire companies to increase its cash flow, and it needed currency to make the acquisitions. Enerco’s stock was the only currency available to it. Keeping it high was crucial.
To discuss his concerns and to plot a course of action, he called an emergency meeting of Wheeler and Speers, his two highest level lieutenants. He began the meeting with a sobering declaration. “We’re running out of time, gentlemen. We’re going to have to quicken the pace. I want to move on Iacardi immediately. In that connection, I sent the company plane to New York this morning to pick up Peter Tavaris and Walter Deaks. They should be here momentarily. Meanwhile, I want to make it clear to both of you that we don’t want to breathe a word about Enerco’s precarious position to these people. I want them to love Enerco, and to want its stock so badly they can taste it. Is that understood?”
Both Wheeler and Speers nodded, aware that their entire financial futures were tied to the value of Enerco’s stock.
A muted warble from Layton’s desk telephone console caught everyone’s attention. Layton pressed one of the console’s buttons. “Yes, June,” he said.
“Mister Tavaris and Mister Deaks are here.”
“Send them in.”
Tavaris and Deaks entered and were warmly greeted by all three Enerco executives. Layton invited his guests to be seated on the white leather upholstered couch close to his desk, then ordered coffee. He forced a smile. “Welcome to Houston, gentlemen. I trust you had a pleasant flight.”
“Wonderful. You’re most kind,” Deaks said.
“Then let’s do some business,” Layton said, anxious to proceed. He focused on Tavaris. “Peter, tell me how you’re coming along with the Iacardi shareholders.”
“Better than expected. I mean we’re getting responses far faster than we anticipated. So far, we’re received written or verbal responses from the estates controlling ninety-two percent of the shares outstanding. All of them have indicated that they will support and accept the proposed Enerco acquisition. We expect similar responses from the remaining shareholders, except Kerri King of course.”
“That’s very good news. What about Kerri King. Do you detect any change in her position?”
Deaks shook his head. “That’s not going to happen easily, Ken. She’s adamant about helping the non shareholders. You should know that recently, she made a loan to Iacardi of one hundred million dollars of her own money.”
Layton frowned. “Wow! The more I learn about this woman, the more she surprises me. You have any idea where she got the hundred million?”
“No, but I suspect it came from the estate of Louis Visconti, the man she killed in Monaco in nineteen ninety. We know he was very wealthy, and we know she was living with him at the time.”
“I would appreciate if you would do some more research on that, Walter. It might be very useful. Your statement that she still wants us to behave like a charitable organization surprises me not. In spite of her intransigence, however, we think it’s time to proceed with a formal written offer. In that connection, I’ve asked our investment banker to prepare the offer, substantially in accordance with the terms and conditions I outlined to you on September twenty-second. I reiterate that we are not prepared to pay the extra billion it would take to satisfy Kerri King.”
Both Deaks and Tavaris smiled, delighted with Layton’s announcement, yet worried that a successful purchase was still far from a faits accompli. Kerri King could still submerge it. “What do you plan to do about her?” Deaks asked.
Layton squinted, the contraction of his facial muscles revealing an evil expression. “We’ve done some research on her financial activities. We think we have enough information to encourage her to change her mind about our offer.”
“You care to share that information with us?” Tavaris asked.
“I’ll give you the short version now. The long one later… She has four hundred and eighty-seven million in a Swiss bank,” Layton said, deliberately excluding any mention of the source of his information.
“That’s what I was telling you in September,” Tavaris declared.
Layton ignored Tavaris and continued. “She’s planning to distribute all of it to the estates of the Iacardi employees who died on September eleventh.”
“How could you possibly know that?”
Layton winked. “Let’s just say that you and Lorenzo Mengalli did a good job.”
“Where in God’s green earth did she get that kind of money?”
“Like you said earlier, that might be the three billion dollar question. Unfortunately, we still don’t have the information we need to prove it’s hot money, but the fact that she’s been hiding it in a Swiss bank for ten years is strongly suggestive. I really wanted to delay the offer until we had something iron clad against her, but it looks like getting it might be too time consuming. Right or wrong, we’re going to move on the offer now. If Kerri King gives us trouble, at least we’ve got enough information to scare the shit out of her.”
Deaks was impressed, but still skeptical. “It might scare her, but it still might not be enough to change her mind with respect to the offer,” he warned.
“That’s where we’re going to need your help, Walter. If she refuses to accept our offer, I’m also going to ask both of you to organize the shareholders to launch a class action suit against her. It shouldn’t be difficult. By refusing the offer, she’s effectively denying them a ticket to ride into the sunset, happily ever after. Don’t worry about the costs. We’ll look after all of it… I’m also going to ask Jeffery to bluff her by threatening to disclose our information to the Feds.” He glared at Deaks, then at Tavaris, his grey eyes portraying intense determination. “I want Iacardi, gentlemen, and I intend to get it.”
CHAPTER 28
New York. Friday, November 16. Nine, A.M.
The smell of fresh paint pervasive, the noise of workers hammering, drilling, sawing and shouting distracting, but to Kerri, the smells and sounds of progress were exhilarating,. Modern furniture had replaced the bargain basement table and chairs in her office. The walls had received a white primer coat of paint and wires hung from gaps in her drop ceiling.
“This place has come a long way,” Louise Markel-Townes said with a warm smile as she entered Kerri’s office. “It’s actually beginning to look like an office.”
“Nice of you to say that,” Kerri replied. “Finally, we’re getting somewhere. I was getting tired of dreaming and visualizing.”
Louise placed a huge stack of mail on Kerri’s desk, then handed her a large thick white envelope. “Fedex just deliv
ered this,” she said, then turned and returned to her office.
Kerri inspected the envelope and saw that it was addressed to her and the sender was USBC Securities, Inc., Investment Bankers. PRIVATE and CONFIDENTIAL was printed under her name and Iacardi address. Curious, she opened it. Before she had removed the envelope’s contents she had concluded that it was the formal written Enerco offer to purchase Iacardi, the one to which Peter Tavaris had referred on September twenty-fourth. She speed read the legalese and noted that while the three billion dollar offer was generous, it still did not contain the clause so crucial to her acceptance.
She remembered her statement to Tavaris and Walter Deaks. “I will accept the offer if all of the shareholders accept it, and it includes a provision to commit to the estates a fixed and acceptable amount of cash, or twenty-five percent of Iacardi’s pre-tax profit for ten years, whichever is greater. I want that money designated for income continuance and for medical insurance premiums.”
“Never!” she vowed. Disappointed and angered, she threw the offer in the general direction of the black plastic garbage can she was using for trash. She missed.
She picked up her telephone receiver and dialed the private number of Wilhelm Lentz, anxious to know why he had failed to contact her.
“May I ask who is calling, please?” a female asked.
“My name is Kerri King. I’m calling from New York.”
“One moment, please, Miss King.”
Kerri waited for thirty seconds, then a man spoke. “Miss King, my name is Julien Geisinger. I am the president of Liechtensteinische Comco. May I ask the reason for your call?”
“You may. I had a meeting with Wilhelm Lentz in his office on Friday, October twentieth. I instigated that meeting to arrange for certain changes to be made to my account with your bank.”
“Would you be kind enough to disclose the details of your conversation with Wilhelm?”
“Why are you asking me? Why don’t you just ask him?”
“I regret to inform you that he has disappeared. No one has seen or heard from him since he left his office on the day of your meeting. Even his car has disappeared. We have informed the police, but so far they have come up with nothing.”
Geisinger’s news ignited a deep sense of foreboding in Kerri. She had no tangible evidence to connect Lentz’s disappearance to her meeting with him, but something deep in her heart told there was a connection. The coincidence was frightening. She was brutally reminded that Dan Turner had told her that she was dealing with a very dangerous amount of money.
“Did Wilhelm leave any record of our meeting? I’m particularly interested in the instructions I gave him.”
“No. We and the police have completed a thorough search of his office. We have found nothing related to your meeting with him on that day. We do, however, have the telephone record of your call to him. We have concluded that wherever he went, he took all of his paper with him, most likely in his briefcase… I’m sorry to have to tell you this, Miss King. Is there anything I can do for you?”
Kerri’s first inclination was to take the first available flight to Geneva and tell Geisinger to do exactly what she had asked Lentz to do. In spite of all of the possible negative consequences, she had made the decision to distribute her money. Each day of delay was another day the families and loved ones of the deceased Iacardi employees had to cope without a source of income. Lentz’s disappearance, however, gave her cause to reconsider her options. She needed time. “Thank you for offering, Julien. I’ll call you if there is. Please let me know if Wilhelm is found.”
She hung up, then hurried to pick up the Enerco offer. She read it again, this time more carefully, hoping she had missed the clause she wanted. It was not there. “Damn those people!” she shouted, then crumpled the offer and threw it into the garbage can. She was now facing a huge dilemma. If she refused the Enerco offer, she risked alienating the other shareholders and sparking the legal action Tavaris had promised. If she accepted the offer, she would foreclose on her dream of rebuilding the company, and fail in her promise of financial assistance to the survivors of the three hundred and thirty-eight Iacardi employees who died on September eleventh. That decision would leave the survivors of the deceased employees who were not shareholders with no money or income. The Enerco offer contained a November thirtieth deadline. Irrespective of what she did, she was on a collision course with unpalatable developments. She had to think.
New York. Friday, November 16. Four, P.M.
Tavaris, looking more like a mafia hit man than a businessman, dressed in his finest black suit and yellow silk tie, entered Kerri’s office without knocking. He marched to a chair in front of her desk, sat, crossed his legs, and removed his sunglasses. “You get your copy of the Enerco offer today?” he asked with an evil smirk.
Kerri pointed to her black plastic garbage container. “I did, and I filed it,” she replied, stone faced.
Tavaris glanced at the garbage can and grimaced. “If I live forever, I’ll never understand you. Why would you do that to a piece of paper that’ll make you ninety million dollars? Why wouldn’t you just take the money and smell the flowers?”
“I told you why, Peter. You want me to tell you again?”
Tavaris was disappointed but not surprised that Kerri was still insisting on the inclusion of her demanded financial assistance clause, one which would cost Enerco a minimum of an additional billion dollars. “Are you the slightest bit inclined to negotiate?” he asked.
“Sure. I told you in September that everything’s on the table. What have you got in mind?”
“Ken Layton has made it abundantly clear that he’s not prepared to include your clause in the Enerco offer. He’s stated, categorically, that Enerco can’t afford it… He has, however, authorized me to discuss this with you to try to find a compromise. In other words, he wants to know what Enerco can do for you to induce you to accept its offer.”
“Peter, stop beating around the bush,” Kerri said, nauseated by Tavaris’ transparency. “Just tell me what Ken Layton authorized you to offer.”
Tavaris tightened his lips and nodded. “If you sign the offer, he’s prepared to make you a vice-president of Enerco, with a substantial increase in your salary, and to give you stock options worth at least a hundred million.”
Kerri closed her eyes and shook her head. “Obviously, you and Ken Layton still don’t get it. I don’t want or need any money from Enerco. What I want and need is to find some way of restoring the incomes of the families of the Iacardi employees who died on September eleventh. If Enerco can think of a better way of doing that than the one I’ve outlined, then I’ll sign the offer. If not, then it’s back to work.”
Until that moment, Tavaris didn’t think it was possible for him to hate Kerri King any more than he already did. He was wrong. Anger and frustration consumed him, pushed him well beyond his boiling point. The woman in front of him was not only occupying the chair he had long considered his, she was now denying him the opportunity of his life, his ticket to power and wealth. He bared his teeth and pointed his index finger at her. “You have until the thirtieth of this month to change your mind. If you don’t, you’re going to regret it for the rest of your life,” he vowed, then stood and marched out of Kerri’s office. To punctuate his last statement, he slammed the door.
“If I do, I’ll regret it for the rest of my life,” Kerri said, covering her face with her hands, shaken and more alone than she had ever been in her life.
CHAPTER 29
Toronto. Friday, November 23.
Late November was traditionally crunch time for associate lawyers at the huge and prestigious law firm of Anderson, McPherson and White. It was time for the underlings to endure their annual performance reviews, a tension filled show and tell session for the firm’s best and brightest. Having gambled their youth and a fortune in education expenses, this was potentially the payoff. Each had done at least a year of working eighty to ninety hours a week for slave wages wh
ile articling and preparing to write the bar administration exams. Each had passed, but continued to work absurd hours. The difference was that they now enjoyed a decent income, enough to buy a sports car, a nice condo, maybe a cottage in Muskoka. Their elevated status was comfortable, but the big casino was to become a full equity partner, and to do it before the age of thirty-two, a hypothetical precipice. A full equity partner in Anderson, McPherson and White made an annual income, including bonus, of between one and three million. It was a generally accepted fact that if an associate failed to become a partner by that age, he or she just didn’t have what it takes.
It was gut check time for Christine Stewart, now thirty-two. For her, becoming a full equity partner wasn’t just important, it was crucial. The alternative was unthinkable. Blessed with a near photographic memory, making it through Wellesley College and Harvard Law was a walk in the park for her. Her ability to cram and regurgitate had made her a legend among her classmates, particularly those with memories possessed by mere mortals. Christine had worked her heart out in anticipation of this occasion. She had been disappointed twice, mildly on her first, devastated on her second. This had to be the one.
Christine wore her heart on her sleeve. From early childhood she had been extraordinarily outspoken. At the risk of being classified as a rebel, she never missed an opportunity to take a strong verbal position on virtually any issue. She couldn’t help herself, even though she knew that too often, she allowed her mouth to move faster than her brain.
In addition to being an excellent student, she was athletic. It was apparent at Branksome Hall, a Toronto private school for girls, then became obvious at Wellesley College. She took to team sports with an aggression that bordered on fanaticism. Winning wasn’t good enough for her, she needed to crush her opposition, blow them away. Her prowess and determination on the soccer field and the volleyball court frequently made that happen, but when it didn’t, she lapsed into what could best be described as a manic depressive state. Anyone who watched her play would state, categorically, that she was largely responsible for the success of Wellesley blue against NCAA, seven sisters, and Newmac rivals.
KERRI'S WAR: VOLUME THREE OF THE KING TRILOGY Page 10