Caitlin seemed pleased her client would match Dickstein metaphor for metaphor. This would be a frustrating morning for Dickstein; in her view of the world, the best kind. Rather than pounce with still another question, he sipped his coffee, lined out two or three questions on his legal pad with a green Cross pen, and peered over the top of his wireless reading glasses at Kate.
She didn’t meet his glance. Instead, her eyes were drawn to a picture on the wall behind him. A man and a woman were sitting at a yellow plastic kitchen table. He was dark, wearing a black blazer and jeans, a blue shirt and a thin green tie. She was light, blonde, in a pink blouse. She was sipping champagne, perhaps white wine. His glass was on the table, next to his cigarettes and a red Bic lighter. There was a half-smoked cigarette in a round yellow ashtray. An unopened bottle of orange juice sat to the man’s right.
Kate felt as though her every move was being defined by some piece of art. The Courbet, the Leger, Felicity at Delmonico’s, and now this. She would always balance the sour taste of four hours of Bill Dickstein’s righteous indignation with gratitude that this pair of lovers (or were they more than that or less than that?) allowed her to escape to their table, for a moment of rest, just as Chris Franklin and Michael Hirsch and Gustave Courbet would be forever linked in her memory.
She was certain once the conference room had been cleaned of any evidence of the morning’s meeting, the woman in the picture would turn to the man and say she accepted Kate’s version of the story.
And the man would agree.
FORTY-TWO
Getting Ed together with Kate and Mike Conklin at the same time was Jack’s idea. Having them meet at Jack’s house meant Ed wouldn’t have to get himself into the city and thus be reminded he’d forfeited his reason for being there.
Ed’s skin was ashen. White hairs billowed out of the top of his red Polo shirt and out of his ears, the way the canasta crowd at the senior center began to look when they realized no one any longer cared. He was wearing a musky pair of Notre Dame sweatpants he hadn’t bothered to lace. His left knee showed through a large hole.
Jack spoke extremely softly, as if he were unwilling to stir either the air around him or controversy. “I remember the day you joined us, Mike.” He held his coffee cup with both hands, as if he needed to keep them warm. Eleanor had set out fruit, small pastries. She needn’t have bothered. No one seemed prepared to let the meeting last longer than it needed to.
“Straight out of Stanford, all wound up and ready to go.” Mike smiled.
“We all had hair.” Jack was comfortable the meeting was getting off to a good start.
“We all had jobs,” Ed said. He’d tried to sound funny, but he was unable to contain his bitterness, even if he wanted to. “How’d you come up with three?” So much for the good start to the meeting.
When Ed was in his stride his view of negotiation was to begin by pushing and to push even more as the meeting was ramping up. If the guy across the table wasn’t back on his heels by the time he’d taken two sips of his coffee, Ed hadn’t done his job. That was part sport and part good business, but this was personal. Mike was saying nearly fifty years of Ed’s effort was worth only about five hundred million dollars. In a market where the hedge fund superstars knock down several billion a year, that was an embarrassment.
Kate quietly waited her turn to be in Mike’s cross hairs.
Mike seemed prepared for the question. “I’m concerned about leakage, Ed.”
“At my age, so am I, but that’s a bullshit number, Mike. You know that.” Mike hadn’t toadied to Ed the way Steve had. He never would have made Ed’s short list of possible successors, which is why he put feelers into the market a few years after he got there.
“Who’s generating your revenue, Ed?” Mike asked, leaning forward to meet Ed toe-to-toe. “It’s not coming from your banking side. You’re losing your top traders to all the funds. What’s left of your private equity group is second or third tier. With all due respect to my very able opponent, I’m giving you a chance to salvage value by bolting what remains at Drake onto my shop.”
Jack shook his head slightly at Kate, as if he were warning her not to jump into the fray. The genius of inviting both of them became obvious. Jack wanted Mike to show his true colors. Kate would be the one with the grace, civility, and integrity needed to reestablish Drake’s reputation in the marketplace.
Mike had built up a head of steam. “I’m not going to tell you how many resumes I got from your people when the news Kate dug up hit. Let’s just say it’s enough so that you shouldn’t bet against me.” He opened his hands, fingers straight up, as if he were offering an armistice. “If I had the comfort your top people weren’t so vulnerable to being picked off once their golden handcuffs fall away, I might raise my bid to four, but even if I don’t scoop them up, some hedge fund or private equity shop will. Boutique banks like Drake that have small wholesale and retail operations are going the way of the woolly mammoth. If I were you I’d cash as many of my chips as I could.”
Kate had spent her career navigating around egos like Mike’s. This morning would be smooth sailing. She owed Jack for this.
“Even after what she did to me, I’d rather back Kate than hand you the keys to my office for three bucks a share, Mike,” Ed said.
Mike looked at Kate as though she’d trespassed the meeting. He’d either lost whatever control he brought to the meeting or never had much in the first place. “I won’t bother saying ‘with due respect’ this time, Ed, but what can Kate do other than ride the ship down? She’s got her hands full keeping her husband’s stockholders from lynching her. Bill Dickstein skewered her at her deposition. I’ll send you the transcript so you can judge for yourself.”
Kate smiled and shook her head. The gesture didn’t slow Mike for a minute. “Do you really think Harvard and the other funds backing you at the moment are going to vote for someone who sabotaged a deal for her own benefit?” The “at the moment” comment was intentional. Loyalties on Wall Street lasted only until quarterly earnings are reported.
Mike lowered his voice. “Listen, Ed. I’ve talked to pretty much every holder so I’ve seen the ending of this movie. Do you really want another round of press about you and Reed? Do you really want stories linking you and Kate to her decision to keep Jack Carpenter in the closet? You want more than three? I’ll see if I can get you three and a half as a premium because your shares assure me the control of the company.”
“That’s not a control premium. That’s a bribe. The papers won’t be particularly kind to you for trying to buy off the large holders to stiff the minority, Mike. You’re still a young man. Think about that.”
Mike stood up. It was his way of showing Ed he’d failed to intimidate him and both this meeting and the tender offer would end on terms he dictated. “You want a fight in the papers? I’m good with that. What’s the worst that can happen to me?
The Deal
runs a front page article calling me a merciless son of a bitch who tried to pounce on a wounded company to make a buck? Shit, Ed, where I come from, that’s a compliment.”
Ed didn’t wait around to call Mike Conklin a bastard. He got up and walked out of his brother’s house without shaking Mike’s hand or thanking Jack for the effort. He wasn’t certain where he was heading, but he knew he had to get into his car and move. Mike made his way out when Ed’s car was out of the driveway.
Jack shook his head. His effort at reconciliation was an abject failure. “It will be a tough fight, Kate. Maybe too tough.” Jack sounded genuinely concerned, too interested in Kate’s well-being to appear patronizing. Still, Kate wondered whether Jack would be quite so solicitous if he were talking to Steve or Clive. He’d tell them to gird their loins for the fight.
Kate hadn’t told Sarah to stand down her fears only to run from the prospect of a nasty scrape with Mike Conklin. “I’m in it for the long haul, Jack.” Kate wasn’t merely being tough. Three dollars a share did her no good. The average strike price of her options was four twenty. Even if she lost at the end, if she could get Mike’s price to five she’d make another million. Six made her two. She could buy a lot of towels to wipe off the mud slung in her direction with that kind of money.
FORTY-THREE
And so the race was on. A political election in almost every sense. Not chicken dinners and town hall meetings, but one-on-one grilling by the hedge fund, pension, and money managers who held Drake’s stock and Kate’s fate in their hands.
David Blakely hadn’t pulled his money out of Drake when the news about Ed and Steve hit. Some of the business press was whispering that was a tacit endorsement of Kate by the Harvard endowment. Of course he’d be the first shareholder she’d call on face-to-face.
They sat at a small table across from David’s desk in one of the new towers that had sprung up in Cambridge. Kate looked out toward the Charles River. Three crew boats were practicing, two oared by men, and one by women. Kate mentioned that because of the way the boats were positioned the women seemed to be leading. David asked whether the comment was a fact or a metaphor.
“It’s time. Barriers are crumbling throughout the business world. Why not on Wall Street? Your endowment will win plaudits for supporting another step for social change.” Kate was prepared to play whatever cards she had.
David smiled. “That will satisfy some of my constituents, but Drake turning a double-digit profit will make even more people happy. Do you see yourself being able to turn Drake around?”
It was a heavy-lifting question. Kate discussed the outlines of her business plan, her hiring expectations, her vision. David seemed satisfied, at times even animated. Kate found herself pleased at the direction the meeting was taking.
“Tell me your view of Drake’s board,” he said.
Kate wanted her criticism to be muted and respectful, but there was no hiding the fact that given the choice she would reshuffle the deck. She opted for a direct response. “There is a great deal of loyalty to Ed among the members. Candidly, I will seek more independent voices. I expect to be challenged and held to the highest standards possible.”
There was an inherent risk in the answer. But if loyalty to Ed’s board was the deciding factor influencing David’s vote he likely would have declined her request for a meeting in the first place. He didn’t visibly react to her answer.
“The Ascalon litigation. When do you see that resolving itself? I am quite concerned about distractions.” David had a list of questions on three-by-five index cards. She wondered about the order of the questions, the priorities David set. She imagined herself once again being deposed, only this time by someone acting in good faith with an honest desire to get to the truth.
“To a degree that’s out of my control. But nothing has come out in discovery so far to suggest this is anything more than a shakedown. I’ve asked our lawyers to press for Jack Carpenter’s deposition as soon as circumstances allow. I’m confident that once the weakness of his testimony is brought into the open the dynamic will shift in our favor and a nuisance value settlement will be inevitable.”
Kate looked David directly in his eyes when she spoke. “I want this sideshow behind me as much as you do. I don’t doubt for a minute I could knock out the allegations in court but I’m much more interested in closure than vindication. It’s time to move forward.” Kate knew she’d honed her answer perfectly.
“Mike Conklin has run a boutique shop. There is a feeling among some of the investors he is more seasoned. How do you answer?”
Kate had spent her entire career selling someone else’s ideas. She now had to sell herself. “It’s not my intent to win your support by criticizing Mike, but while Keiffer’s numbers have been impressive, he put them up in an era of easy money. That seems like several lifetimes ago.”
“Well, then let me follow up on that point. How do you see yourself steering Drake through what’s going on at the moment?”
Kate was trying to gauge whether David was moving through his indexed questions quickly because he was energized by their conversation or because he was rushing to wrap up their session.
She told the story of how she tracked down the ownership of the Courbet, of what it took to get Chris to accede to her plan, of her time with the Hirsch family. “I know how to stay focused.”
Her time with Hirsch was paying dividends a second time.
David moved slightly against the table. “And Peter, Kate? I need to ask whether your husband will support you.” Kate wasn’t surprised by the bluntness of the question. David wouldn’t have asked something that personal if he weren’t seriously considering throwing his weight behind Kate.
“I don’t just mean in connection with the tender offer. I mean beyond, if you’re successful.”
“When I’m successful?”
David smiled slightly, just enough to let Kate know that putting her toe in the comedy waters wasn’t a complete failure.
“Obviously, David, what happened to Ascalon is traumatic. But the worst is behind us.”
“As I understand it though, Peter will be away for an extended period of time as part of Ascalon’s sale. Talk to me about what that will do to your family? As you’ll be essentially a single mother at the time you’re stepping into Ed’s shoes, what comfort can you give me that your kids won’t be too much of a distraction?”
The question was a fair one. Drake would be a jealous mistress, demanding all of her time and beyond. She’d been juggling home and office from the moment Sarah was born, but the stakes were so much higher now.
“My kids fortunately are at the point where they don’t need a full-time mom. We’ve talked about it in depth. We’ve lined up all the help we need, but more importantly, my kids are absolutely committed to my success.”
“Time will tell.”
“Time will most certainly tell.”
David leaned back in his chair, a signal that aspect of the interrogation was over. For now, at least. Kate allowed herself a moment to prepare for the next round of questions.
“And where do you see Drake in five years?” he asked.
Kate pointed to the business plan on the table between them. “Drake will be doing so well in five years that when my daughter Sarah applies to college around the end of that five-year period I may call you and ask you to put in a good word with Harvard. And then I’ll have another one coming four years after that, so perhaps we should be talking about what your investment will look like in ten years.”