Vaccine Nation

by David Lender

  Dad said, “What? You think I can’t still kick your butt?”

  Richard felt his throat thicken. “Thanks.”

  “You’re very welcome.”

  Richard looked at his watch. Dad grabbed the check, said, “Get going. Give yourself some time to collect your thoughts.”

  “Why don’t you let me get this?”

  “When you’re a mogul you can buy me dinner.” They both stood. Dad stuck out his hand. They shook, then hugged.

  “Love to Mom,” Richard said.

  “Call her. Tell her yourself.”

  Richard nodded. “Any final thoughts?”

  “If you fall flat you know you can always come home to regroup.” He smiled. “But you aren’t going to let that happen. Both you and I know that, don’t we?”

  Richard looked at his watch: 7:45. He’s late. He sat in Walker & Company’s reception area at 55 Water Street, waiting for his interview with François LeClaire. And he’d rushed through breakfast to get here by 7:30. He caught himself clenching and unclenching his fingers into his palms, forced himself to relax them.

  Great. More time to ponder the imponderable.

  Richard picked up a magazine from a Sheraton end table next to the antique Chippendale chair he sat in. Fortune. The current issue; Harold Milner was on the cover. He’d also graced the covers of Forbes and Financier magazines over the last decade. In the cover picture for the article, “Financial Engineering on Steroids,” Milner stood in a conference room at Walker & Company. It was probably the very one Richard sat outside now. The picture showed Milner framed against the backdrop of the Brooklyn Bridge, the back door entrance to Wall Street. Inside the issue Richard knew the first page of the article showed a photograph of Jack Grass and Mickey Steinberg standing on either side of Milner. He was Walker & Company’s most important and prolific client. Richard knew all about these guys. He’d been Googling them before Google was a verb.

  The Fortune article got it mostly right, although it was obvious to Richard he’d done more research on Milner than its author. Milner, then Chief Financial Officer of Coastal+Northern Corporation, had taken his entrepreneurial leap at 40 years old. He’d cashed in his C+N stock options for $1.5 million, used them for his first deal and never looked back. Now his $7 billion private empire employed 17,000 people in 22 states. The article called him brilliant, eccentric, wildly creative, and a compulsive workaholic—one of the most powerful and wealthy entrepreneurs in the U.S.

  Richard looked into the open door of the conference room at the table set for breakfast. He imagined Milner, Jack and Mickey discussing a deal over breakfast and felt an airiness in his stomach.

  Richard saw a young guy, probably an Associate, walking toward him. He had his jacket off, a pile of papers and some presentation books in his hands, quick pace, looking tense. Yeah, an Associate, probably first year. He hurried past Richard and peered into the conference room. Seeing no one there, he sat down in the chair across from Richard, apparently waiting. He was twitchy and sweaty. It made Richard feel sorry for him. The guy’s papers started sliding out of his lap. Richard reached out to help him but the guy shook Richard off, reined them in himself.

  Richard now saw the guy checking him out, probably guessing why Richard was here.

  “Who you waiting for?” he asked.

  “François LeClaire.” Richard saw his face show recognition, then his forehead wrinkle with tension. The guy sighed and leaned back in his chair. At that moment his BlackBerry vibrated in his belt and he sat up with a start. Richard heard someone talk fast and loud on the other end of the call. The guy left in a hurry, papers rustling. Richard got the uncomfortable sense that this could be him in a few months, stealing a moment of relaxation as he waited for somebody to yell at him about a column of numbers that didn’t add up.

  The elevator door opened and Richard turned to see Harold Milner, the man himself, walking toward him. Milner carried himself with an understated manner that somehow magnified his power and importance. Richard instinctively stood, and then a surge of adrenaline froze him in place like a ten-year-old meeting Babe Ruth. He realized as Milner approached he was as big as the Babe up close, too. Six feet five or so, thick in the chest like a football lineman, massive hands. Trademark shaved head. He cruised up to Richard. “Harold Milner,” he said, extending his hand. Just like that.

  Richard felt himself starting to speak without knowing what would come out. He said something gushy after introducing himself, his voice faint as he said, “Mr. Milner.”

  “Call me Harold.” Milner looked into the empty conference room, then sat where the Associate had moments earlier. He glanced down at the copy of Fortune Richard still clutched. “And I’m not as bad as they say,” he said. “Or as smart.”

  Richard smiled, more relaxed now. His body had unfrozen and he sat back down, now sitting with Harold Milner like they were shooting the breeze. “I’m not sure I believe that.”

  “Which? Bad or smart?”

  “Smart. I’d say you’ve done okay…Harold.” “Harold” came out haltingly, Richard trying it out.

  “Yeah, well, ‘with money in your pocket, you are wise and you are handsome and you sing well, too.’”

  “F. Scott Fitzgerald?”

  “Yiddish proverb. Don’t believe everyone’s press clippings.”

  “Hard to believe you’ve just been lucky.”

  “No, but the stuff in that article is downright silly.”

  Richard smiled. “You’ve done some interesting deals.”

  “Yeah, but this ‘steroids’ nonsense is just to sell magazines. My approach is about as low tech as they come.”

  “I don’t know. On the Brennan deal it was pretty exotic the way you set up that special-purpose subsidiary to finance the receivables on the McGuffin division.”

  Miller gave him a shrug and a look that said, “So?”

  “So, that extra financing gave you about a 20% price advantage over the other bidders. It got you the deal.”

  “Maybe.”

  “And on Dresner Steel, the way you sold off two of the divisions and merged the rest with Tilson Manufacturing and Milburg Industries within a year. How many guys could pull that off and still keep the tax-loss carryforwards intact?”

  Milner looked at Richard as if pondering something for a moment. He said, “Good insights. I’m impressed. But I’ll let you in on a little secret. I don’t consider I’ve done anything particularly imaginative or creative in my life. I stick to simple, riskaverse basics. You know who Vince Lombardi was?”

  “I’m from Minnesota. Our state seal has an image of the Packers kicking the Vikings’ asses.”

  Milner smiled. “I’m like Lombardi’s Green Bay Packers. We come up to the line and crouch in position for an end sweep. The defense knows it’s probably an end sweep because it’s second and seven, and, besides, Lombardi’s only got ten plays in his playbook anyhow. Whattaya think we do?”

  “Throw an eight-yard pass to the opposite sideline.”

  “End sweep, perfectly done. Seven yards every time. Nothing exotic, just basic execution.”

  Richard wanted to ask him if this “aw shucks” routine disarmed CEOs whose companies he was trying to take over, but settled for: “Good story. Works for me.”

  Milner put his elbow on the end table, cupped a big hand over his mouth. Richard could see him smiling with his eyes, apparently thinking. He remained silent, then: “Are you new?”

  “So new I’m not even here.”

  Milner scrunched his eyebrows like he was puzzled.

  “I’m waiting here for an interview,” Richard said. Milner smiled with his eyes, his hand over his mouth again. “I think the guy who was supposed to meet you was just called away.”

  “Well, then you stepped in and did the job. You got my vote.” He stood up and held out his hand, a big smile on his face. Richard got up and shook hands with him again. “Welcome to the firm, Richard,” Milner said.

  Richard laughed. No
t a nervous one because he was freaked out that he was actually bullshitting with the most famous guy in finance. He just laughed because it was funny, Milner telling him to call him Harold, putting him at ease, joking around. Not some stiff, but a regular guy.

  They were still shaking hands, Richard laughing, when Jack Grass and Mickey Steinberg walked up. There he was, standing among the guys who’d done 15 major deals together over the last 20 years, not including scores of financings, refinancings, divisional divestitures and add-on acquisitions; a mini industry, the three of them.

  Richard heard Jack and Mickey greet Milner, saw them shake hands, exchange a few good-natured barbs. But not clearly, not like it was real, because he was now somehow out of his body watching from a distance. He zeroed in on Milner, larger than life again. The casualness that said he didn’t need to make an effort to impress was still there. Now Richard took in Mickey, Walker’s genius in Mergers and Acquisitions, who droned on in a monotone, frizzy Jewish hair, sleepy eyes. Mickey was probably laying out some wisdom, because Milner gave him his complete attention, nodding as Mickey spoke. Now Richard studied Jack, the firm’s Chief Executive Officer. Jack stood smoothing the peaked lapels on his European-inspired suit, looking artfully put together from his French tie and matching pocket square down to his Italian loafers. Jack’s eyes moved around like a big jungle cat’s. Watching Milner, taking in everything, now sizing up Richard, now back to Milner and Mickey. His athletic build showed in the close-fit suit, shirt cuffs protruding Cary Grantlike from his sleeves, hair razor-cut, Palm Beach tan standing out against his white collar and cuffs.

  They walked into the conference room, Milner smiling and lifting a hand in a restrained wave good-bye to Richard. Jack Grass saw it and glanced back at Richard, seeming to make a mental note.

  Richard looked into the open door of the conference room. A mahogany table was set for three, bedecked with crystal, china, formal silver and fresh linen. Its subdued sheen and worn edges showed graceful age, complemented by the oriental rug it sat on. The aroma of rosemary and eggs mixed with some other scent he couldn’t identify emanated from an unseen kitchen.

  Richard wished he could listen in on their meeting, be in the room with them. Hell, he wanted more than anything to be one of them, particularly Milner. He was a big part of why Richard was here.

  Just as they sat down at the table to breakfast, a trim man in a double-breasted suit walked into the reception area with an air that he owned the place. Richard took him in: slicked-back hair, pocket square that matched his bold Hermes tie, English-striped shirt with white cuffs showing below his jacket sleeves. A Jack Grass wannabe? He walked erect, lips pursed, projecting arrogance. LeClaire, no doubt. He’d be the most important person in Richard’s life for the next hour.

  “Francois LeClaire. Sorry I am late.” He smiled, but modestly, as if to overdo it would wrinkle his suit. His accent had the exaggerated edge of a cartoon character, almost too pronounced to be real. “Conference call to Europe. Unavoidable,” now adopting a manner like Richard, of course, knew the import of all this. He shook Richard’s hand like he wanted to leave no doubt he understood the concept of a firm American handshake. He extended his other hand in the direction of the offices with the formality of a Swiss hotelier.

  Here we go. Richard resisted the urge to peek back at Milner.

  Harold Milner looked down at the rosemary and goat cheese omelet on his plate, then at his hands; the meaty hands of a carpenter or mason. But for some turns in his life, that could’ve been him. It was something he tried hard never to forget. He couldn’t help laughing at himself now: he was uneasy, and trying to hide it. He’d been at the deals business a long time. Lots of tense moments, tough deals, pressure. But he rarely felt like this.

  He looked over at Jack and Mickey. They sure took Milner back. Twenty years of dreaming, manipulating, trial and error, making it work. Elbow-to-elbow, the three of them. Jack, the ideas guy, sitting there now, puffing and blowing, preening himself in that $5,000 custom suit. Mickey the planner and thinker. Jack should thank God he had Mickey. He made Jack’s schemes real. And it really wasn’t just Mickey’s brains and technical mastery; it was Jack’s crazy ideas, because without Jack’s dreaming Mickey wouldn’t have had anything to breathe life into.

  Before he met these two he was just a scrappy guy doing pint-sized deals. Then he met Jack, and a month later, this new guy he had in tow, Steinberg—Mickey, not a nickname for Michael, just Mickey—short, plump, and unathletic. They both showed up at Milner’s New York office in that dowdy building he’d started out in at Eighth Avenue and 34th Street. Smelled like the Chinese restaurant downstairs. Jack grinning his golden-boy grin in a $2,000 English-cut suit, still only 31 years old and Walker’s top producer, already running the firm’s Corporate Finance Department. Mickey blinking slowly, shaking hands more firmly than Milner expected from someone with that weasely face and punch-drunk demeanor.

  Jack pitched the Caldor idea almost before they sat down, itching to get at it. Jack talking nonsense about buying a billion dollars of debt owed the retailer Caldor by its credit card customers for 20¢ on the dollar. Mickey explaining that Caldor was near-bankrupt and desperate for cash. Jack saying Caldor’s credit card customers would ultimately pay their bills, Milner would make a killing. Mickey laying out how to finance the deal. Back and forth, Milner’s eyes shooting from one to the other like at a tennis match. Then Jack telling Milner all he had to kick in was $10 to $12 million, maybe make 20 to 30 times his investment in a few years. Milner thinking, that got his attention, whoever these guys were.

  It had turned out to be a recipe for an incredible home run: Milner had invested $16 million of cash, almost all he had lying around, and borrowed the rest to buy Caldor’s credit card receivables. After paying off his lenders in two years, Milner had netted $455 million. Jack and Mickey had propelled Milner into the big time. Within a year he bought a Lear jet and apartments in New York, Palm Beach and Los Angeles. He moved his office to the penthouse of the Helmsley Building; the anchor of the 45th Street entrance to New York’s power alley business district on Park Avenue. And that had only been the beginning.

  But now, this was the end.

  “I wanna do a deal on Southwest Homes,” Milner said.

  He saw Jack perk up across the table like a dog sniffing a bone. Mickey was characteristically quiet, eyes blinking. Milner sipped his water, swallowing hard without worrying about that crinkly sound he made. One of the keys to his humble roots that Mary Claire always cast him a disapproving eye about at dinner parties. He didn’t have to try to impress these guys.

  Mickey said, “Mind if I ask why?”

  Milner saw Jack look sideways at Mickey, as if to try to shut him up.

  “I don’t like the business anymore. Any schmoe who can sign an ‘X’ on a mortgage application can buy a house he can’t afford.”

  Jack said, “Yeah, a real bubble mentality.”

  Milner nodded.

  Jack said, “This round of musical chairs won’t last very long. Better pick your seat before the music stops. Remember when the Internet stock bubble popped?”

  Milner felt himself smile beneath his hand, knew it was showing in his eyes. This was Jack at his best: always selling. Milner would miss Jack and Mickey in a way, but they’d become his chaperones on a trip to the dark side. Churning out deals together that just moved pieces around on the table; they were all making piles of money but not creating anything. He’d made a commitment to himself that he’d go back to building companies again, not this “financial engineering on steroids” crap the magazines lauded him for. Even that kid in the lobby only talked about his deals that busted up instead of built things. Milner looked over at Mickey. “Mickey, whattaya think?”

  “You want to sell it to a corporate buyer, or do an initial public offering?” Mickey asked.

  “Take it public—the IPO.”

  “The IPO market’s still shooting out deals like a baseball pitching machine
,” Jack said. “And homebuilding stocks are red hot.”

  “Everything’s hot. Maybe too hot,” Milner said.

  “Yeah, white hot. All the more reason to unload a chunk of Southwest onto the public,” Jack said. Why did Jack make even the right answer sound like bullshit half the time?

  Mickey said, “It’s worth about $1.5 billion. How much do you want to sell?”

  Milner put down his fork, rested his elbows on the table and put his hand over his mouth, taking his time. He glanced over at Jack and saw him observing. Milner said, “All of it.” He saw the muscles in Jack’s jaw flex. Then he saw Jack inhale, sensed the animal arise beneath that bespoke tailoring. Okay, Jack—ready, shoot, aim.

  “We can sell 100%,” Jack said. “A number of 100% IPOs have gotten done lately. And with home prices setting new records each month, and getting a mortgage as easy as eating popcorn, the public markets are bidding up homebuilders’ stocks like crazy.”

  Milner said, “I’ve noticed.” He looked at Mickey.

  Mickey said, “In general, Jack’s right. But if you sell it all in the IPO you’ll take a major discount versus selling, say, half. If you sell it all, people ask: ‘What’s wrong with it that he doesn’t want to keep any?’”

  “I know. But I like the idea of selling it all. How big a discount would I take?” Milner felt his stomach tighten.

  Milner saw Jack and Mickey take time to look at each other. Milner felt himself smiling again. He had to admit he loved watching these guys, had since the beginning. Back and forth. Jack trying to urge Mickey with a glance and body language, Mickey considering his answer, blinking, contemplating.

  Mickey said, “I’d say at least $300 million.”

  Jack didn’t move.

  Milner shrugged, then nodded. “Done.”

  Jack looked over at Milner with his best shit-eating grin.

  Milner looked down, observed his hands again. In a way, he’d get to be a carpenter after all. And put in an honest day’s work.