The Brass Statuettes Ch. 09

Frank: "So, as the bank's representative, you're interested in reviving the deal in some form after we get back on course; is that right?"

Richter: "Well, I suppose so, Frank, if you put it in those general terms."

Frank: "That's all I need to know, Hanny. I'll talk to you later."

Frank hung up the phone and sat back in his chair. He lifted his coffee cup to his lips and polished off what remained. The Chase deal was dead and he knew it. "At least I've got a warm corpse. Maybe I can make it look like it's just sleeping." Before he had a chance to think about it for long Jeannette buzzed him again.

"Frank, I just received a call from Mr. Shoreham. His flight has been delayed in San Francisco by ninety minutes, but he says he's still on his way. I've already alerted the driver."

"Thanks, Jeannette. Would you call Jason Lowell and ask him if I could speak to him for a few minutes?"

Frank leaned back in his chair again. It was hard to relax, but having Jeannette on his side made it easier. "No matter how crazy things get around here, at least I know she's out there." After a few minutes passed Jason Lowell appeared at his door.

"Your secretary was away from her desk," Jason said, "so I thought I would come right in."

"Glad you did, Jason," Frank replied. "How about some coffee?"

"No thanks," Jason replied as he sunk into a chair in front of Frank's desk. "I got your message. I came to see what you want."

"I was planning to go down to your office, Jason. I didn't mean it to look like I summoned you."

"That's alright; I'm here now."

"I'll get to the point, then," Frank said. "I've got a major shareholder coming in early this afternoon for a visit. He wants answers about our recent troubles. If he doesn't get the answers he wants, he'll dump our shares and things will get real complicated. I thought you could spend fifteen or twenty minutes with us and talk about our R&D efforts. You know, show him the shiny side of the coin."

Lowell looked away and huffed a sigh. He turned back toward Frank. "What do you want me to tell him?" Jason asked with a sneer. "What would you suggest? Certainly not what we're going through. We're cramped into shared space because the new building that was promised is still on the drawing board. We were supposed to get funded. Where are our funds? Buried in some Wall Street report that no one's read yet. Is that what you want me to tell him?"

"No, Jason. I thought a brief rundown on our new products would be nice."

"I'm a scientist, not a salesman," Jason protested.

"This could be very helpful," Frank replied.

"Why the hell should I? I'm the one on the short end of the stick. Maybe if I got what was promised to me..."

Frank vaulted out of his chair. He stared down at Lowell who remained seated with crossed arms looking out the window. "Look at me, you little twerp," Frank yelled. He leaned forward over the little man. "Yeah, right here!" he shouted and stabbed his fingers at his own two eyes. "This is the real world; a lot's at stake. We need grown-ups around here. You're acting like one of my teenage daughters. You need to grow up or go back to that snot-nosed college of yours."

Jason looked up at Frank. His lower lip began quivering. "Maybe I just will," he blubbered.

"Grow up, or go back?" Frank demanded.

"I won't justify that with an answer."

"I'm busy," Frank sneered.

Jason arose from his chair and walked to the door. "Do you want me to meet with this guy or not?" Jason asked as he was leaving.

Frank had sat back down and picked up some papers on his desk. "No thanks!" he answered without looking up.

Jason left and Frank wondered if he should have treated Jason more softly. Shoreham's visit, after all, was important and a goodwill chat with Jason might make a difference. "The hell with it; the guy's unreliable." Frank shook his head, wondering how some things come to be.

***********

Murray Shoreham didn't arrive until two in the afternoon. Frank used the extra time to call Al Crossman in hopes that there was some news on the release of the 10-Q, but to no avail. Then he paid a visit to Alvin in his office to prep him for Shoreham's visit.

"Hey, I've got an idea," Alvin said. "Let's get Jason Lowell in on this. He can do a little dog 'n' pony show on our R&D projects."

"Already asked him," Frank replied. "He gave me such a hard time that I told him to forget it."

"Well, I'll just change his mind right now," Alvin said. His face was red with anger as he picked up the phone.

Frank raised a hand to signal him to wait. "I think I'd rather do without it," he said as Alvin held the phone midway the desk and his ear. "He'd only cop an attitude and Shoreham will see right through it. Jason's too unpredictable. I'm not too sure that Shoreham's the dog 'n' pony show type, anyway."

"When this is over I'm gonna make Jason change his tune," Alvin vowed. "We can't do it now. A sudden resignation from senior management is all we'd need with the problems we're facing now."

"I agree," Frank said, "although I don't understand why you should have to straighten out Jason's attitude. He's not some entry level kid just out of college. He should be able..."

At that moment Alvin's intercom buzzed. He answered it and then set the phone down. "That was the front desk. Your secretary is on his way up with Shoreham right now."

***************

By the time Shoreham arrived, the Executive Dining room was closed for the day, but Jeannette had thought ahead and ordered in a buffet that they could eat at Frank's conference table. As Alvin and Frank welcomed their guest, she set the fare out on the table for them.

"Sorry your plane was late. We could have had lunch upstairs. I'm afraid this will have to do," Frank apologized.

"This is better than fine," Shoreham said as he started filling his plate from the portable buffet. "I want to catch the six o'clock flight back home later this afternoon, so we only have a few hours. By the way, say 'thanks' to your secretary for changing my reservations. She's doing that right now."

"If it weren't for Jeannette, we'd be lost," Frank admitted as the three men found a place at the conference table.

"Let me get to the point," Murray told them. "You guys have me out on a very skinny limb. By rights, I should have dumped you when this whole thing started. I would have been right in line with the Fund investment policy. To be honest, I was about to when you called me yesterday."

"We're glad you didn't," Alvin said.

Shoreham grimaced a little. "I still might; I don't want to. I'm here to be convinced."

"Everything that made you see us as a good investment is still in place," Frank assured him. "This 10-Q thing is just a bump in the road. We're working on getting the impound lifted. We believe the SEC is being unreasonable."

"If this bump turns into a pothole, I'll get myself canned and I can assure you that my successor won't hesitate to pull the plug."

"We believe the most immediate danger is a wave of high volume, high profile selling that will drive the share price even lower. That would make us easy pickings for a takeover."

"I can't fault the logic. What do you think the company is worth? From a shareholder's point of view, a takeover isn't always bad."

"We haven't even made the calculation, but it would be a lot further north than the share price is now. A buyout at this level would be of no benefit to the owners."

"Is that what your Board says?"

"I speak for the Board," Alvin interjected. "What Frank just said reflects the position of the Board. You can speak to Jim Sweeney; he's an outside director—Chairman of the Finance Committee, too. He couldn't attend today, but he told me that he would be more than glad to speak to you at any time. I'll give you his number before you leave to catch your flight.

"What made you pull the new offering?" Shoreham demanded.

"It's like I said on the phone," Frank replied. "It was the depressed status of the overall market. We didn't pull it, just converted it to a shelf registration. Of course, the SEC didn't approve it when all the short selling happened."

"So someone got the news early and went out did some profiteering."

"That started it, and then it was follow the leader. I think it wouldn't have happened in an upbeat market," Frank said. "It would have absorbed the news without much of an impact. Unfortunately, everyone's so skittish right now, anything can provide an excuse to dump and run."

"What about the funds you were going to raise from the offering?" Murray asked.

"The greatest part of it was for an acquisition in Europe," Alvin answered. "That's on indefinite hold, unfortunately. The rest was for the expansion of our R&D effort. Frank, here, is working on an alternative source of funds."

"Borrowing?" Shoreham asked.

"That's right," Frank said. "We're in talks with one of the New York banks right now."

"You'll never get a big bank to fund you with your SEC docs in limbo," Shoreham said.

"It's true; they want to put it on hold until the SEC problem is cleared up. After that they're willing to open it up again."

"Oh?" Alvin grunted.

"I just spoke with them this morning. I was going to fill you in later this afternoon," Frank said to his boss.

"And what if it doesn't come through?" Shoreham demanded. "What happens to your R&D effort then?"

"We think it will..." Frank started to answer.

"The R&D effort has got to go forward," Alvin declared with conviction. "We'd have to do some trimming on some projects. We'd make whatever cuts..."

"You can't cut the dividend," Shoreham insisted. "I need your assurance that you won't touch the dividend. If we can't agree on that, there's no reason to continue talking."

Alvin was tongue-tied. "Of course the Board..."

"The dividend won't be touched no matter what," Frank promised. He turned to Alvin. "If we cut the dividend we'll have all kinds of problems. The stock price will really go in the crapper and a takeover would be child's play."

"We need that dividend flow to fund retirement benefits," Shoreham added. "It's in our forecast. A dividend cut would be very serious."

"I meant what I said," Frank answered.

**********

After they finished lunch, Alvin excused himself, promising Murray Shoreham a tour of the R&D facility and a round of golf when he visited again with more time. After Alvin left Frank and Murray sat again at the conference table again.

"What I really need is a copy of that 10-Q," Murray said.

"You know I can't," Frank replied. "I'd like to give you your own copy right now, but you know the rules."

"I had to try," Murray said. "I don't want to divest Western, but if this situation doesn't clear up soon, the pressure to do so will be enormous. I'll be asked why I didn't do it sooner than I did."

"My hands are tied, Murray."

"To be honest, I'm going to start divesting small lots of Western stock when I get back. It won't be enough to change our relative stake, but at least I'll be able to say that I got the process rolling. If everything turns out like you said, we can buy the shares back later."

"I understand," Frank said. "It sounds like a reason..."

Frank was interrupted by a knock at the door. Jeannette stepped in. "I'm sorry to interrupt you, Mr. Bennett," she said. "Here is your copy of the 10-Q form. You said you wanted to lock it in your desk for safekeeping."

"Oh, right," Frank said. "I almost forgot. Set it on my desk and I'll take care of it when we're done."

"By the way, you wanted me to let you know when they were having the cake for Joe Driscoll's forty-year anniversary. They're just about set up now."

"Oh, geez, I wanted to go to that," Frank said as he winced. "A guy puts in forty years with a company, he deserves some recognition." He paused for a second and then looked at Shoreham. "Murray, would you mind if I snuck out for a few minutes. I'll just say a few words and ..."

"Go on," Murray said, waving his hand. "Bring me back a piece of cake."

"Thanks, Murray. I won't be much more than fifteen minutes. If you want, use my computer to check your e-mail. It's right behind my desk. It's all right there; monitor, scanner, keyboard. Jeannette will be right outside if you need anything."

"Thanks, Frank. I think I just might do that. Take your time."

It wasn't long after Frank returned that Shoreham left for the airport. Jeannette walked into Frank's office. "Do you think he did what you wanted him to do?"

"I'm sure he did. When I got back the 10-Q was moved from the spot where I left it. My scanner has financial statement excerpts from it in its memory. It was bending the rules, but it was worth it."

"Did he ask for his piece of cake?" Jeannette asked, indulging herself with a wry grin.

"No, thank goodness," Frank replied. "Do we even have anyone working here named Joe Driscoll?"

*************

TO BE CONTINUED...

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Dear Readers,

Thanks for reading. Be sure to send me your comments and questions.

AW