Shell Game (Stand Alone 2)

by Badal, Joseph

  “They could take our deposits even if the net collateral value of our real estate is still $30 million over the loan amount?”

  “Hell, Eddie, I don’t know. I’m not a lawyer, but the language in that clause just talks about deterioration in collateral value. It says nothing about whether the collateral value is below the loan amount. Our real estate was worth $62 million five years ago when we took out the loan; now it’s worth $50 million. That is deterioration.”

  “I think you should wire transfer our balances from Broad Street National to that little bank where you deposited last weekend’s receipts. No point in risking $3 million. Most of that money is already committed to covering the costs of the land purchases in Pittsburgh. If we don’t perform on those purchase contracts, we’ll lose our earnest money deposits and get our asses sued by the sellers. Plus, we’ve already paid the franchise fees for two new sites.”

  Nick pulled his cell phone from his pocket and dialed the bank’s Treasury Department number from memory. He asked for Mary Jane Wolitsky, his usual contact.

  “Mary Jane, It’s Nick Scarfatti. How are you today?”

  “Okay, Nick. Things are changing around here, but I’ve still got my job.”

  “Hang in there, Mary Jane. Your customers wouldn’t know what to do without you. Listen, I need to order a wire.”

  “Sure, Nick. How much and to where?”

  Nick knew the company had $2.967 million and change in its accounts. The vast majority of the money the company deposited to its checking account was swept from that account to a money market account on a daily basis. The last deposits made to the checking account were made the previous Thursday. They always maintained a balance of $100 thousand in the checking account, so there was now at least $2.867 million in the money market account, not including accrued interest over the last few days.

  “Move $2.8 million from the money market account to the following account.” He gave her the name of the bank where the wired funds needed to go, the bank’s routing number, and the account number.

  “I don’t think I can do that, Nick,” Mary Jane said.

  “Why not?”

  “A hold has been put on your account in the amount of $2.75 million.”

  “By whom?” Nick demanded. “Who ordered that hold?”

  “Mr. Cunningham did.”

  “And who the hell is Mr. Cunningham?”

  “He’s Lucifer’s errand boy, Nick,” She said in a whisper.

  “And who’s Lucifer?”

  “Gerald Folsom. The new owner of the bank.”

  CHAPTER TWENTY-THREE

  The only way Gerald Folsom was able to fall asleep was by sedating himself with alcohol. He woke up at 11 a.m. on Tuesday morning feeling heavy-headed and fuzzy-mouthed and when he stood up, a wave of nausea overwhelmed him, driving him to the bathroom to throw up in the toilet. Wiping off his mouth with the back of his hand, he ripped off the clothes he’d worn to the bank late last night, showered, and shaved. By noon, he was beginning to feel half-human again.

  He put on a pot of coffee and tried to eat a couple pieces of toast. But they only roiled his stomach further. He thought maybe a drink would help, but when he picked up the scotch bottle, his stomach began to heave.

  “What the fuck is going on?” he said aloud. “First Donald Matson, then Wendy, and now my damned stomach.”

  Folsom knew he had lived a charmed life for decades; nothing ever went wrong. Now things seemed to be falling apart. He had to get back in control. What had Cunningham said to him last night? Something about assets and liabilities. That’s what he should do. Eliminate his liabilities. But his head still wasn’t clear enough to focus on what to do.

  Wendy had no idea where she was. The room was unfamiliar, but from the color of the drapes and the bedding she could tell it was a woman’s room. She felt an overwhelming need to relieve her bladder. Rolling over to the edge of the bed, a spasm of horrendous pain stabbed her back and she cried out, shifting back onto her right side. Her cry devolved into a moan as she lay there, not knowing what to do.

  Suddenly the door opened and a woman entered, asking, “You okay, dear?”

  “I need to . . . use the bathroom. I can’t seem to get up.”

  The woman helped Wendy to a sitting position. “Come on, let’s get you up.” She took Wendy’s arm and helped her to her feet, Wendy groaning as she leaned against the woman. They shuffled together to the bathroom. “Call me when you’re done,” the woman said.

  When Wendy finished, she called out, “Ma’am, I need your help.”

  The woman returned and pulled Wendy off the john.

  “You want to change your clothes?” the woman asked. “Get cleaned up?”

  “I feel awful,” Wendy said. “A bath would be wonderful, but I don’t think I can get into and out of a tub. Maybe a shower.”

  “Okay. We brought your bag in from your car last night; I’ll lay out fresh clothes.”

  “Who are you? Where am I?”

  “My name is Katherine Winter. I’m a friend of Paul Sanders, who you called last night. This is my home.”

  “I remember calling Mr. Sanders, but that’s about all.”

  “Do you remember how you got your injuries?

  “I’d rather not talk about it.”

  “Okay. Go ahead and get cleaned up,” Katherine said. “I’ll make something to eat.”

  With effort, Wendy removed her sweatshirt and then dropped her skirt and underwear on the bathroom floor. She turned toward the shower and flinched at movement to her left -- it was her reflection in a full-length mirror. Her breath caught when she stared at the damage Gerald had done to her. Her body looked as though it had been tattooed with black, red, and yellow ink and her face was swollen and cut along her cheek bones. She leaned against the bathroom wall and sobbed, full of shame and sadness.

  But, as suddenly as the shame and sadness had overcome her, rampaging anger overwhelmed her. “The bastard!” she muttered. “The sick bastard!” She came to a sudden conclusion she sensed would change her life. Wendy wrapped a towel gently around her torso and opened the bathroom door. She shuffled across the bedroom to the door to the hall and called out, “Mrs. Winter.”

  Katherine came down the hall. “Yes, dear.”

  “Do you have a camera?”

  “Of course. Why?”

  “I want you to take some pictures.”

  CHAPTER TWENTY-FOUR

  It was 3 p.m. before Stanley Burns returned Edward’s call. Edward called Nick on the intercom and asked him to come into his office, leaving Burns on hold until Nick arrived.

  “I’m sorry it took so long, but we’ve been in meetings with the FDIC since early this morning.” Burns said.

  Edward didn’t feel like exchanging pleasantries with Burns, but knew it wasn’t in his best interest to antagonize the man. “It must be difficult dealing with new ownership and the regulators at the same time,” he said.

  “You have no idea. Anyway, you called. Is there something I can do?”

  “Yes, a couple things. I learned earlier today someone put a hold on our bank account. We can’t access our funds.”

  “I’m sorry, Edward, but that decision was made by the new owner and his representative. Of course, we’ll release the funds in your accounts as soon as you pay off your loan. Have you made any progress finding alternative financing?”

  Edward tried to force a cork into the bottle of his anger, with only limited success. “So, you just appropriated my money without even notifying me?”

  “It’s been done on every one of our commercial real estate borrower’s accounts. The Feds are in agreement with the bank’s decision.”

  “But that doesn’t address my point. Why no courtesy call? No discussion? Do you have any idea the position you’ve put us in?”

  Burns lowered his voice. “I’m really sorry, Edward, but I have no authority around here anymore.”

  “So, who do I need to talk to? Who has authority?”


  Burns hesitated before he answered. “Ownership does not want to interface with bank customers.”

  The cork slipped a bit more out of the bottle. “Oh, is that what we’re doing? Interfacing? Well, I want to interface with someone who can make a decision about my loan and my deposit accounts. I’ve got a bank interested in taking over $11 million of our debt as long as Broad Street keeps the balance of $9 million and releases its lien on fifty-five percent of our real estate. That would still give your bank a forty percent loan to value ratio on the remaining $9 million balance, the same as it is now.”

  “I don’t—”

  “And you need to remove the hold on our bank accounts immediately. Tying up our cash is going to force us to violate contracts we’ve already executed for our new restaurant locations.”

  “I’ll have to look into this, Edward. I’ll try to get back to you tomorrow.”

  “Tomorrow won’t do,” Edward shouted, the cork popping all the way out. “I want to know by five o’clock this evening what time my lawyer and I can come into the bank tomorrow. If I don’t hear back from you by 5 p.m., my lawyer and I are going to go see the editor of The Philadelphia Journal. I’m sure the paper and the public will be interested in knowing how Broad Street National Bank, the bank’s owner, and the FDIC are undermining perfectly good businesses in the Philadelphia area.”

  “I’ll call you back today,” Burns said and hung up.

  “Jeez, where did that come from?” Nick asked.

  “Where did what come from?” Edward snapped.

  “You pushed Burns pretty hard.”

  “You know, I empathize with Stanley Burns’ predicament, but this is our future we’re talking about here and I’m tired of being jerked around by these assholes. Call Paul Sanders and ask him to clear his schedule for tomorrow. I don’t want to go into a meeting with the bankers without legal counsel.”

  “What if they tell you to shove it? What if they call your bluff?”

  “I wasn’t bluffing, Nick. What the Feds and their cronies are doing is wrong. If they’re treating bank customers across the country the way they’re treating us, then it’s no wonder the economy is in the toilet. Let’s see if they can stand the light of day illuminating the situation.”

  “I understand your feelings,” Nick said, “but you’re playing chicken with all of our futures.”

  “We’ll see about that,” Edward said. “Besides, what choice do I have? Please make that call to Paul. I have another call to make. And close the door on your way out.”

  After Nick left, Edward reflected on his conversations with the banker and with Nick. He didn’t regret for an instant what he had said to Burns, but he now wished he hadn’t included Nick on the call. Nick had a wife and two children, and obviously thought he was playing Russian roulette with the company’s future. Edward knew if the company went out of business, Nick would have a difficult time finding another job in the present economic recession.

  But Edward was more concerned about the futures of all of his employees, and he wasn’t going to allow the bank and the Feds to take down the company he’d built from scratch, and take down his employees with it. He called a number from memory.

  “Peter Mora.”

  “Peter, it’s Eddie.”

  “Hey, Eddie; que pasa?”

  “Malo, mi amigo. Muy malo.”

  “What’s going on?”

  “You got time to talk?”

  “Of course.”

  “Well, hang onto your hat, because it’ ain’t good.”

  Edward related the story starting with the meeting he’d had at Broad Street National Bank the previous week, when Stanley Burns had told him the bank wasn’t going to renew his loan when it matured on July 29. It took almost thirty minutes to fill in all that had happened since.

  “I know that was a lot of detail, but I wanted to warn you what might be coming down the road. If I can’t refinance my loan, the bank will be in position to foreclose on all of the collateral they hold. That would mean the restaurants and the franchise rights as well.”

  “I wish I could tell you I’m shocked, but I’ve heard this same story over and over again these past three months. Franchisees have been foreclosed on all over the country because the banks wouldn’t renew maturing loans. It’s a bloody disaster.”

  “What’s happening with those franchises?” Edward asked.

  “The marginal ones, we just tell the banks to enjoy the fast food restaurant business. They usually come back to us and offer to release their lien on a franchise right in return for some nominal price. It’s worth our while to pay a few dollars to get rid of the bank and then we’ll resell the franchises to stronger investors when the timing’s right. The stronger locations, we fight a little harder on those. By the way, how much do you owe the bank?”

  “$20 million against current appraised real estate of $50 million.”

  “Jeez, Eddie. Normally, I could go to our banks and handle the refinancing for you. But the Federal regulators have forced them to cut back on commercial real estate exposure.”

  “I know, but I’m not about to give up. Let me know if someone from Broad Street National Bank calls you about the franchise rights.”

  “Oh, you can count on that. I won’t make it easy for them.”

  “Thanks Peter.”

  “De nada. Vaya con Dios.”

  CHAPTER TWENTY-FIVE

  Edward dragged himself home at 10:30. He had agonized about how to save his business, but no realistic ideas had come to him. There just wasn’t enough time to raise $20 million, especially in this financial environment.

  Betsy met him at the door, kissed his cheek, and took his briefcase from his hand. “I’ve got dinner waiting for you,” she said.

  “I had a burger at my desk. I think I’ll just watch the news for a while, try to decompress, and go to bed.”

  She gave him a sad look. “I wish there was something I could do.”

  He hugged her and told her somehow things would work out, but he didn’t believe his own hollow words.

  After Betsy went upstairs, Edward retrieved a large tumbler from the bar before cracking open a new bottle of Johnny Walker Red. He filled the glass with ice and took it and the bottle to the den and placed them on the coffee table. Picking up the television remote, he was about to turn on the set, but hesitated and then hurled the remote across the room into a plush chair. “Sonofabitch!” he said, in a subdued voice so Betsy wouldn’t hear him.

  He poured three inches of scotch into the glass and took a healthy pull straight from the bottle. Resting his head against the back of the couch, he closed his eyes and allowed his suppressed anger to build. Since meeting with Stanley Burns at Broad Street National Bank a couple days ago, he’d wanted to shove his fist through a wall—or, better yet, to punch out a banker, or a Federal regulator, or a politician. Then he thought about Gerald Folsom. Folsom. He would be the ideal target.

  Despite his usual optimism, Edward now faced the very real possibility of losing the company he’d built from scratch. All of the effort he had put in would be for nothing. And with his personal failure would go his mother’s and sister’s investments in the company.

  Beneath Edward’s anger was fear. This wasn’t like fighting in Iraq. In fact, he told himself, he would rather be back in Iraq than confronting the evil he was now dealing with.

  “Bastards!” he growled. “Evil bastards!”

  “What is it, Eddie?” Betsy asked.

  He hadn’t heard her come downstairs. She came to the couch and sat next to him. He knew she didn’t like to see him drink; she’d grown up in a home with an alcoholic father. But she didn’t say anything.

  Edward set down the bottle and took Betsy’s hand. “I don’t know what to do,” he said.

  She rested her head against his shoulder. “Things will work out; you’ll see.”

  Edward wanted to be strong for Betsy, but his overwhelming sense of defeat and fear quickly turned to bitter outr
age and hatred.

  “They’re stealing my business, Betsy, and there’s not a damn thing I can do about it. The unfairness, the injustice of it all is more than I can stand. The government, the regulators, the politicians, Wall Street. Take your pick. I’m just a pissant they can step on.” He coughed a scornful laugh. “The bastards took over General Motors and Chrysler; they took over the banking system. Why am I even surprised?”

  Betsy sat up and looked at him. “You’ll figure it out. You always do. That’s what attracted me to you when we first met. Your self-confidence.”

  For an instant, Betsy’s words rubbed him the wrong way. He wanted her pity, not her stupid assurance. He almost yelled at her to leave him alone, when she added, “Win or lose, you can’t give up. You do that and you’ll never be able to live with yourself.” She kissed him on the cheek and stood. “I’ll be waiting for you upstairs.”

  Edward watched his wife leave the room. His stomach churned with acid, swamping his mouth with a sour taste. He was ashamed of the self-pity he had been basking in. Betsy was right. He couldn’t give up. He may not win this battle, but he’d go down fighting . . . fighting every enemy he could in the process.

  He stood and took the scotch bottle to the bar. He went upstairs to tell Betsy how much he loved her.

  WEDNESDAY

  JULY 20, 2011

  CHAPTER TWENTY-SIX

  Folsom hadn’t been back in his old neighborhood in years. His parents died still living in Germantown. He wanted to move them out of the area, but by the time he could afford to do that, his father was dead of lung cancer and his mother institutionalized with Alzheimer’s. Until today, he’d had no desire or need to visit here. But things had changed.

  He cruised down Germantown Avenue, passing Washington Lane, continuing on for another two miles. Many of the active storefronts of his youth were now boarded up, but street corners were still gathering spots for unemployed young black men. At Claremont Street, he made a right turn and drove down a block to Frankie’s Pool Hall, a joint that hadn’t changed since Folsom hung out there over forty years earlier. Parking the Mercedes in the four-car lot next to Frankie’s, he walked to the front entrance and pushed through the door.