Due Diligence: A Thriller (29 page)

“That’ll be fine, Mike.”

“You’re screwing things up for me here, Stanzy. I’m meant to be flying out of here right now.”

“I’m sorry, Mike. If you just do it like you said, that’ll be great.”

“Yeah.” Wilson laughed sarcastically. But his mind was already moving on. Let Pete Stanzy humiliate him if he dared. It was a small price to pay, and once this deal was done, just let Dyson Whitney try to get any more business from him. Right now, he still needed them to raise the loan or the deal wouldn’t go through. Everything else was set. After this morning, he had Bassett in his pocket. Oliver Trewin had looked like he might make things difficult, but Wilson was confident he had disposed of that threat as well. He didn’t like the man, but he would happily give him a payoff if that would buy his cooperation. The boards of the two companies were lined up. Nothing else stood in his way. The loan was the last remaining obstacle, and if his signature on a piece of paper meant he was going to get over it, that was one signature he could certainly provide.

“Mike,” said Stanzy, “I really appreciate it.”

“Yeah,” replied Wilson, and he slammed the phone down.

*   *   *

Pete Stanzy took the fax up to John Golansky’s office.

“I’ve been speaking with Mike Wilson,” said Pete. He didn’t know any easy way to say it, so he just went ahead. “He wants another two billion.”

John Golanksy started laughing.

“He recut the deal, John. Fifty-fifty, stock and cash. They announce Friday week.”

Golansky stopped laughing. “You’re serious, aren’t you?”

Pete Stanzy nodded. He put Wilson’s fax on the desk.

“What’s this?” asked Golansky.

“It’s the best I could do, John.”

Golanksy read it. “What? I’m supposed to frame this?”

“Come on, John. We don’t get this loan arranged, we don’t get the deal. We don’t get the deal, we get nothing. And we both look like jerks.”

Golansky read over the fax again, a look of distaste on his face. “Anyone who signs something like this, it just makes me think he’s an even bigger crook than before. Bruce Rubinstein’s gonna love it. You want to go show him?”

Pete sat down across the desk from Golansky. “He’s not a crook, John. He’s just given away a little more cash than we agreed. We’ve got to help him raise it.”

“He’s not a five-year-old, Pete. He ought to have—” Golansky stopped. His eyes narrowed. “You didn’t tell him he could offer more cash, did you?”

“Are you out of your mind?”

Golanksy continued to watch him suspiciously for a moment. Then he sat back in his chair. “Bruce Rubinstein’s gonna love it,” he murmured to himself again. He shrugged. “What do you want me to do, Pete? Tell me. You want me to go to junk? You want me to raise this money whatever the cost? He’s gonna be paying fifteen percent on this debt.”

“Just get the money,” said Stanzy.

“Just get the money,” murmured John Golansky. “Even at fifteen percent, I don’t know if I could. We were hitting the wall at four-point-two, Pete. Now you’re looking for half as much again.”

“You can’t get it?”

“Their balance sheet stinks. Every day I look at it, it stinks more.”

“Yeah, but BritEnergy’s strong.”

“Brit Energy’s strong…” Golansky sat forward. “Let me tell you what I think. I think your boy and his whiz kid of a CFO have been up to a few tricks. I think the market’s starting to figure it out, and they don’t like it.” Golansky glanced at the fax from Wilson again. “You think that’s possible, Pete?”

Stanzy shrugged.

“Tell me,” said Golansky, “what do you really think about this deal?” He looked Stanzy straight in the eye. “Level with me, Pete.”

Pete Stanzy and John Golansky liked each other. They pretty much trusted each other—to the extent that any two people can trust each other in a world where a multimillion-dollar bonus may depend on one person not letting the other know all of what he knows, even if they’re supposedly batting for the same team. And from the very start, they had both wanted this deal. But they wanted different parts of it. Stanzy wanted the acquisition to be made, the money and stock to be handed over to BritEnergy’s shareholders. When that happened, the bank would earn its advisory fee and the bulk of his bonus was safe. Golanksy wanted the debt, not just the bridge loan that would finance the deal in the first instance, but the bonds he would then sell to investors over six months to pay back the bridge. When the bonds were sold, the bank would earn the other part of its fee, and his bonus was secure. Pete Stanzy needed the combined Louisiana Light and BritEnergy company to last all of three minutes. Golansky needed it to survive six months.

They both knew it. And they both knew that each one’s trust for the other had its limits.

“Huh, Pete?” said Golansky. “What do you say? Really?”

Stanzy thought about it carefully. “From my client’s perspective, I think this is one of those deals.… If it happens, everything’s great. And if it doesn’t, maybe everything isn’t.”

“Can you be more specific?”

“Honestly, John, I can’t. I don’t
know
anything. It’s just a feeling.”

“So it’s like a kind of Hail Mary deal?” said Golansky, who had been a football player.

Stanzy nodded. “Something like that.”

“Really?”

“Yeah. I think so.”

Golansky considered it.

“A Hail Mary deal with a fucking big fee for us on the end of it.”

“That’s a point,” murmured Golansky.

They looked at each other.

“Bruce Rubinstein’s gonna love this,” muttered Golanksy again.

“Fuck Rubinstein.”

“Yeah,” said Golanksy. “Fuck him.”

Stanzy got up to go.

“Pete,” said Golansky. “You know the stake the firm was going to raise on its own account?”

Stanzy nodded.

“We might not do that. Huh? Maybe it’s not such a great idea.”

29

A shutdown in a Lousiana Light plant in Argentina had hit at around eight
A.M.
local time. In London, Stan Murdoch spent the afternoon on the phone in his hotel room trying to help resolve it. He was given ten different reasons before he received what sounded like a sensible explanation, involving a faulty heat gauge that had tripped the system. But that might just be another false lead, or another lie someone was telling to shift the blame from themselves. By then, Ernesto Poblán, his deputy for South America, had arrived on location, and Stan left it to him.

Stan Murdoch wasn’t ready to retire. He loved what he did. But he was sixty-one. If Mike Wilson got rid of him after he did this deal, who was going to take him? Who’d hire an operations director at sixty-one?

It wasn’t a question of money. Money had never been a big factor for Stan. The older he got—and the more he had of it—the less important it was. By his own standards, he had plenty, anyway, more than he could ever have imagined when he enrolled for engineering at state college in Wyoming back in 1967. It had been a big subject of discussion in the family, whether he should go to college or stay on the ranch. Those were the days when you could still make money running cattle on a family ranch. But he was the smart one. His two brothers, Max and Art, didn’t even finish high school. They needed the ranch more than he did. So Stan went to college, but the lean, Spartan ethos of the Wyoming rancher was in his blood.

How much money did he need, anyway? His wife, Greta, was happy. They had a nice big house in Baton Rouge and a cabin at Breaux Bridge where he went summers to fish. They had a good pension coming, when that day arrived. Maybe when Stan retired they’d sell the place in Baton Rouge and buy a farm somewhere and have a couple of horses. They’d talked about it, kind of go back to the way of life from which they’d both started. Their kids had gone through college and had their own families. Sometimes Stan helped them out, but they weren’t in need.

For Stan, that was probably the most insulting thing about this whole sorry tale. Not the way Mike Wilson had kept the deal secret from him for so long, or the way Lyall Gelb and even Doug Earl—Doug Earl, who wasn’t anything more than a jumped-up country lawyer sitting in a big fancy office down the hall from Mike—knew about it before him, but the way Wilson had offered him a fistful of cash to get out of the way. Like that was all he was, an obstacle that a couple of million bucks could remove. It was sad. Showed how much Mike Wilson had changed. Time was when he would have known better than to make an offer like that to Stan.

Nine years before, when Mike Wilson called up and asked Stan to come over and head up operations at Louisiana Light, he would have known. Stan agreed to come to Baton Rouge because he figured he’d be able to go out there and build a great operation and he figured that was Mike Wilson’s idea as well. At first it panned out like that. They bought a couple of good plants and added them to the portfolio. But things changed. Mike lost interest in the day-to-day operations. He got big ideas, he wanted to buy all kinds of things. Then Lyall Gelb appeared and suddenly they were buying god-awful plants in Colombia and Europe and God knows where, and they were creating all kinds of companies in all kinds of places and Stan didn’t know where the money was coming from or where it was going. Stan didn’t understand Lyall Gelb. He was sure he was a finance whiz, as Mike kept saying, but he just didn’t understand what made him tick. Lyall was a city boy; Stan came from a ranch in Wyoming. They could have been two different species. The installations Mike kept buying were dirty, almost derelict old plants that you couldn’t run properly no matter how much money you threw at them. But no matter how often Stan told him, Mike would laugh it off and go buy something else. “I’ll buy ’em, you run ’em,” Mike kept saying. Stan sweated blood to get those plants up. He was proud of what he achieved, but he had it in perspective. He knew just how bad these plants were even after he’d gotten all the improvements out of them that were humanly possible. But it was as if Mike didn’t care; all that mattered was the next purchase, and the next one, and the one after that. Stan just didn’t know how the company could go on. Mike laughed it off. “The stock price doesn’t lie, Stan,” he would say. “Just look at the stock price.”

Mike was right about that. The stock price kept going up. Stan didn’t know how that could happen when the plants were so poor and the operations so bad. He didn’t understand how these things worked. He figured somehow it must have something to do with Lyall Gelb and all the financial stuff he was doing, but he didn’t trust that, either. When you came right down to it, if your operations weren’t good, how could the value of your company keep going up? Stan didn’t understand much about finance, but he figured he knew enough to understand that. There came a point where he decided to sell every Louisiana Light share that he owned. After that, he exercised every option the day it vested. Wilson didn’t like it. It didn’t look good, the operations director bailing out of the stock at every opportunity. “You’re crazy, Stan,” Mike would say, trying to persuade him to hold some stock. “Don’t you want to be rich?” And it was true, if he’d held on to his stock, and if he’d sold it a year, or two years, or three years later than he had, he’d be a wealthier man. But Stan didn’t understand what was happening at the company. And he didn’t trust what he didn’t understand.

Over the years, the company had changed. It went from the head down, as it always does. First, there was the company jet. With the new international plants, they needed one, Mike said. It would save the company money. But the jet went a lot of other places as well. Mike’s wife at the time, and then his girlfriends spent plenty of time onboard. Stan knew for a fact that on more than one occasion it had been used to fly Mike’s kids to Europe on vacation. That was plain wrong. Mike bought a corporate chalet in Aspen. To entertain clients, he said. And there was the company apartment in Manhattan. The kind of executives had changed as well. Young, greedy, only worried about the number of stock options they had in their pockets.

For a while now, Stan hadn’t known what kind of a place he worked in anymore. It wasn’t the same place as the one he arrived at nine years earlier. Not his kind of place. He had seen the same thing happen at InterNorth back in the eighties, the same excess, the same greed, all coming from the top. And InterNorth had fallen like a ripe apple to the grasping hand of Ken Lay.

In the InterNorth days, Mike Wilson had been at any poker game going. Spent weekends in Vegas. Back then, he was open about it, almost boastful. Now, you never heard him talk about gambling. But that only made Stan suspicious. Gamblers don’t just stop, he knew. He was pretty sure Mike was gambling again. A couple of times, when they had been abroad together, Mike disappeared for the night. In Budapest. In Bogotá. What was in those cities that was so attractive to him? A woman? Or one of the casinos? More often, Mike found a reason to go on somewhere in the jet and told Stan to catch a commercial flight home. Like today, when he said he had to go to Hungary. For business.

If Mike was secretly gambling, it just made Stan feel more nervous, more uncomfortable with the place Louisiana Light had become. It seemed to him it was a house built on sand. Stan didn’t know how or where or what would make it happen, but he feared that anytime now it might creak, lean, and come crashing down.

Somewhere in the back of his mind he had begun to wonder if the British guy, Bassett, might be able to restore some sanity to the madhouse that had become Louisiana Light. Maybe he could work with him. But now Murdoch had seen the other man and he wasn’t impressed. Mike Wilson was going to walk all over him. As Stan sat watching the two of them, he wondered how he could ever have imagined it might be otherwise.

Nothing was going to change. With a bigger company for Wilson to play with, it was probably going to get worse. Deal or no deal, Murdoch felt, the house on sand was coming down. Wilson’s desperation to do the deal only made it seem more certain. But it would take two companies with it, rather than one, if the deal went ahead.

That night he called Greta. They talked about stuff. Not business, other stuff. Family stuff. He told Greta he’d be staying over in London the next day, probably back on Thursday. She wanted to know if he was all right. She must have heard something in his voice. How long had they known each other? Forty-plus years. High-school sweethearts. If Greta didn’t know his mind, who did? She knew when something was troubling him. But she knew if he wasn’t ready to talk, there was no point asking.