“Who’s we?”
“You and I, Jules, and a group of clients committed to helping each other make a lot of money.”
“That’s not going to stop Hardware City, and you know as well as I do we don’t have the debt capacity to buy back our stock.”
“No need for that,” Kamin said, having remained quiet since Tate arrived, just as rehearsed earlier. “Our way is better. A consortium of clients purchases twenty-six percent of Musselman’s stock before closing on Tuesday. A second suitor, friendly, of course, buys another fifteen percent at the same time. You purchase another ten percent and we’re completely insulated from any takeover, without raising suspicion. We’ll do it all simultaneously. While Hardware City is busily acquiring shares to establish a minimum ownership position, which will probably be something around forty percent, we’ll shut them out.”
“You know I can’t do it. In the first place I don’t have a billion dollars lying around to invest. In the second place, it’s illegal. Not only do we release quarterly earnings next week, we’re about to launch America’s Warehouse. I’m in a blackout period, you know that. The SEC would crucify me.”
“We can take care of the legalities,” Kamin said, stepping closer. “The first thing we’ll do is collateralize your Musselman stock options through a foreign lender into a blind Nevada corporation owned by a Nevis Trust. Everything will be completely untraceable. The Nevis Trust will then use the proceeds from the collateralization to obtain a line of credit. That line of credit will be used to buy ninety-five million shares of Musselman stock on margin. Only twenty-five percent of the value of the stock will be required for deposit. The rest can be borrowed from the broker. The stock price doubles before margin call, and the Nevis Trust cashes out over a three-day period. You make a killing and prevent a takeover.”
“Why can’t your partnership of clients or this new suitor you’re going to arrange buy the remaining ten percent?”
Tate came back into the conversation, “Because they’ll want to know you’re in this with them, David.”
Quinn looked scared and trapped. He was in over his head. In less than forty-eight hours when the New York Stock Exchange reopened for trading, Musselman’s stock price would continue dropping and Hardware City would give shareholders a way out, by buying their shares at a premium. Life as Quinn knew it would be over by Wednesday, unless he accepted Tate’s offer. He should have done more to prepare for the possibility of a takeover, as remote as it may have seemed weeks ago. And he might have, had he not been so involved preparing for America’s Warehouse. Now, he had to choose. Either accept Tate’s offer and be beholden to Tate for the rest of his life or reject it and lose everything. There were no other options, at least none that could be developed in time to stop a Hardware City takeover, and Quinn knew it.
Tate didn’t expect it would take long for Quinn’s moral dilemma to give way to his obsession for preserving control of the J. B. Musselman Company.
Quinn rubbed his fingers across his large forehead and peered at Kamin.
“You’ve done this before?”
“Yes,” Kamin said.
“How many times?”
“Dozens.”
Quinn’s face froze in astonishment.
“No, David, we didn’t create this situation,” Tate said. “Actually, it happens more often than you might think. We just know how to turn it to our advantage.”
Small beads of sweat began forming across Quinn’s forehead. He took a deep breath. “You’re certain there’s no way to trace my involvement?”
“Absolutely no way,” Tate said with his characteristic arrogance.
“And if you’re wrong?”
“We’re not,” Tate said. “You once told me you wanted to buy a ski resort in Idaho.”
“I’ve considered it, but what does that have to do with…”
Tate interrupted, “The Nevada Corporation will be set up as a resort development company. The investment coming from your collateralized stock options will be made to look like foreign investment, to be used as working capital for the selection, acquisition, and development of ski resort properties. The cash will remain in the Nevada corporation at all times, and will only be used by the Nevis Trust as collateral for obtaining a line of credit to purchase the ninety-five million shares of Musselman stock on margin.”
Quinn folded his arms across his chest and glared at Tate. “Is this what you wanted, Wayland, to own me lock, stock, and barrel?”
“Don’t be silly, David,” Tate said, putting his hand on Quinn’s shoulder. “This is what friends do for each other. Don’t forget, we all have a lot riding on the success of America’s Warehouse. A takeover by Hardware City could jeopardize everything.” Tate paused a moment to let his words register. “Your interest is our interest. We can have all of this worked out by Monday morning. It’s what we do for clients in crisis. In the meantime, enjoy your day of skiing with Andrea. They say it snowed all night at Sunshine Village, two feet of fresh powder.”
Quinn’s face was flushed. He said nothing.
“If you’re not comfortable, we won’t go through with it. It’s your call, David.” Tate could see Quinn’s anger, but the trap had already caught its prey. That was life. It was time for Tate to cash in on his investment in David Quinn.
Quinn walked over to the huge window and stared at the snow-covered pines. A couple of minutes later, he returned to where Tate and Kamin were standing. The look on Quinn’s face had changed from anger to resignation.
“Okay,” he said. “Tell me exactly how we go about borrowing the money against my stock options.”
That was it. Quinn was now theirs for as long as they wanted to manipulate him. He savored the moment as Kamin answered Quinn’s question in precise detail, assuring him that the funds could be made available immediately, through a European investment fund created for just this sort of emergency. After that, Kamin suggested they meet before dinner to sign all the necessary papers.
Looking stoic yet relieved, Quinn agreed to the meeting and then shook hands with Tate and Kamin before leaving for his room.
As Quinn walked away, Tate leaned over to Kamin and whispered, “I think events one and two of our plan can be considered a success.”
They exchanged roguish smiles.
Several hours later, alone in the private smoking lounge of the Banff Springs Hotel, with its dark cherrywood walls, plush Persian rugs, and soft leather sofas, Wayland Tate and Jules Kamin lit nine-inch Havanas and raised their Dirty Martinis to the initial success of their stock-manipulation plan. After a beautiful day of skiing with Andrea Vargas, Quinn had quietly acquiesced, signing all of the necessary paperwork to collateralize his Musselman stock options. The dinner that followed had been extremely pleasant, and Vargas later reported that she and Quinn shared several goodnight kisses before bedtime. Everything was going as planned. David Quinn had now been locked into the secret partnership until he died.
As the buzz from their martini’s and cigars grew, Kamin turned to Tate with a question. “Are you anticipating any last minute reversals from Quinn?”
“No,” Tate said. “We just need to make sure there are no hitches in the ongoing execution.”
“He’s feeling trapped and he doesn’t like it,” Kamin persisted.
“Of course he doesn’t like it. He’s addicted to running his own show. But what choice does he have?”
“Like I said before, we don’t want another Zollinger on our hands.”
“Where’s all this worry coming from? You keep asking me the same damn question,” Tate said without hiding his annoyance. Then he sucked on his cigar while considering Kamin’s enduring fear. Kamin had to be obsessing over more than the failed acquisition of Fielder amp; Company, Tate thought. Was it the neutralization of Charles Fielder? Whatever it was, Tate didn’t like it.
“I don’t know, Wayland,” Kamin said, exposing his feelings of uncertainty and vulnerability. “Maybe it’s the rising body count.”
“There’s huge risk in what we’ve decided to do, Jules,” Tate said. “Charles’ disclosure plan used to be our immunity blanket, but now it’s gone. This is a whole new ball game with higher stakes and even greater rewards, which means whenever things go bad, our damage control must be swift and merciless. Call it our new competitive advantage.”
