Inital Public Offerings Ch. 04byFD45©
The mass of summonses was because there were a lot of people pissed at me. Most underwriters spread the risk around. So we had one primary underwriter, and 7 others who were also selling shares, including, I'm proud to say, Goldman Sachs. I have to admit to a certain pride at being sued by an institution of that level of prestige. It made me feel that I had hit the big time.
However, one truism for an legal matter is they move with glacial slowness, particularly at the corporate level. Much more personal matters intruded earlier.
His Honor sat behind his desk, as a decorative stenographer took notes. Bryson Coopersmith was representing the Slut, who was in attendance, and he was in rare form. "His actions were deceptive and detrimental to the well being of my client. He specifically sold his appreciating assets simply to deny my client her legitimate share of community property. I have here a dozen examples of what a successful tech IPO is expected to appreciate in its first three months..."
I tuned him out as I examined Roland Thurman Esq. He was sitting in front of the judge, his gray hair a wispy halo around his head. His glasses were resting on top of his head, his chin lying on his chest and his hands folded upon his tweed enshrouded paunch. I kept wanting to kick him awake, but I suppressed the impulse. I had enough on my plate without facing assault charges. From what the last month had been like, it wouldn't be surprising.
"...and then, to top it off, he returned a signed divorce decree along with all the shares." he wound down.
It was true, and almost made me want to drop Mr. Thurman as my counsel. We read over the divorce decree three times and by the Wednesday after she had served me, Thurman made me not only sign her decree, but forced me to buy up 500,000 shares of Ipswitch Inc to give to my 'darling wife'. Luckily Prathee wasn't home because I tied one on right after I clicked the purchase and transfer order.
The Judge looked askance at Mr. Coopersmith. "Aren't they the papers your own client had served upon Mr. Reynolds?"
"Exactly your Honor." Thurman snoozed from his chair.
"Sir, they were served under the current conditions of the company, not after Mr. Reynolds crippled the company with his illegal actions."
"Not illegal. It is a civil matter. And as Mr. Coopersmith knows, IPO investments, particularly in a tech company, are highly speculative..."
When I had sold the shares, I had 'hit', actually 'made' the top of the market. Our initial price was $6 a share and we had gained a dollar per share when I sold. So I realized 7 million dollars. My attorney, God damn him, convinced me that I should repurchase 500,000 shares of Ipswitch Inc to fulfill the divorce decree. But by that time, the shares had dropped to $2.5 a share. So instead of the $3.5 million she thought she would get, she got $1.25 million in share price plus another $500,000 in real estate, furniture and accounts. She had specified a number of shares as community property, not a particular value. Much more then she deserved, in my opinion. But suddenly, she had the difficulty of arguing how giving her exactly what she wanted was now a BAD thing. It was a very bittersweet moment. Save a million but give the Slut the shares she so desperately wanted.
Of course, this decision totally reversed my stance on keeping Andrew from getting his hands on the company, something I was foursquare against. Thurman had talked to me about this at length before this meeting. "Look Jim. You are already out. What does it matter to you who is in charge? This lets you keep your money and if what you say is true about Mr. Schwartz, they'll rue the day themselves." There was a nagging uncertainty in my gut about that, but I grudgingly decided to sign.
The large sheaf of papers thwaped on the judge's desk. "What's this?" he asked.
"If I don't miss my guess," Thurman said, without opening his eyes, "that is Mr. Reynold's theatrically offered rebuttal to 'manipulation and deceptiveness'. You'll find records of maxed out credit cards to the tune of $50,000 for clothing, jewelry purchases and cash advances made by Mrs. Reynolds on the day after her husband found out about her infidelity. So, my question to Mr. Coopersmith is if he is offended by a spouse making arbitrary and fiscally harmful decisions upon the other spouse at the last minute in principle, or only when my client does it?"
"Your honor!" Bryson protested.
"He has a point, Counselor. You're asking to overturn your own settlement."
There was more arguing, but nothing further was decided. Lawyers!
Leaving with Mr. Thurman, I asked "Do you think we'll get away with this?"
"Hell no! This is California. If you want fair, get divorced in Ohio next time. But now the onus is on them and it's likely they'll get less then the half of what they are asking. Judges are human...occasionally. They sometimes reward clever tricks and earned comeuppance if it's legally justifiable." He flicked a look at his watch and hefted his briefcase. "I have to get some depositions, so I'll talk to you later." That was too bad. I wanted to discuss some other things that Allie had neglected to put in her divorce decree.
I was considering whether to bring some KFC home when her cloud of perfume announced her presence. "Hello Allie." I didn't need to mention that both of our lawyers would have kittens if they caught us having a normal conversation together. But what was the chance I'd be having a normal conversation?
"What do you want?" My patience was limited, but I had to admit to a certain curiosity. There was a small part of me that hoped she'd come to regret her decision, that she felt she made a terrible mistake. Admitting that would be soothing to my soul. I even wanted her to want to reconcile. Oh, don't get me wrong; I wanted it so I could crush her hopes...mostly...I think. The wistful memories of days gone by and my blue balls were conspiring to make me consider irrational options. "And don't call me that."
"Okay." She quirked a grin. "MEESter REEnalds, I haven't talked to you in forever."
Snorting with laughter, my tension dropped about two notches, which was no doubt her intention. She was still savvy and she knew me reasonably well. She must have if she could pull the wool over my eyes in so total a fashion. I had to watch her, but I wanted some answers to my questions. I pulled my iPhone out of my pocket, and punched in my code, checking my calendar. "I don't have to be back at work until four...ever. Want to grab a coffee?" She nodded guardedly, but with a certain amount of anticipation, or so I thought.
We retired to one of the courtyard cafes and found a table in an isolated section. She wore a nice silk blouse which I hadn't seen before. It was a chaste looking thing. Hiding her round heeled nature was probably sound legal strategy. "That's a nice blouse." I tried to start casually but she could see the clench in my jaw as I said it.
She sighed. "This is all fucked up. I know what you are thinking and you're partly right. You really caught us off guard. We didn't know what you were going to do; if you were filing restraining orders or had a process server coming to our place the next day, so we were scrambling ourselves. Which meant," she grimaced, "that I made sure I had enough stuff to live off of for a while."
"Walmart was having a sale." I said dryly. "You didn't need to go to Sax. But I understand your feelings now."
"Yes. Andrew has a bad habit of not paying for his pussy which is why he's still single."
Her breath hissed inward. "That was uncalled for. We're discussing marriage."
"Well, it makes me feel better that you aren't just throwing a perfectly good marriage away for some meaningless sex. So what was your game plan?"
Looking into the foam of her mocha crappachino (sic), Allie mustered her thoughts. "It wasn't supposed to be like this. You were supposed to finish up Ryleh, the company was supposed to go through the roof. We'd argue a bit more, I'd file for divorce and after we...I mean you got a chance to get over the hurt, I'd hook up with Andrew openly and we could go on with life without ruining your business relationship or the company. I didn't want to hurt you more then necessary. Andrew didn't either."
"Yeah sure. He's a prince. And when did you two start fucking?"
"That...developed. Look, does it matter? I don't want to get into that. Andy is a people person like me. We're...compatible in ways that you and I weren't."
"It matters to me. Because it seems that your plan involved fucking him until all this happened. And I agree. You're both cheaters. Sounds like the stress of the IPO was a nice excuse for a divorce. You didn't draw up that proxy card for something months from now. I recall I used to be the 'package'. So...what happened to us?"
"Nothing happened!" was her bitter response. "That's exactly the problem. Nothing! Happened! You were still the same guy who I married back in the dorm rooms. You have your little X-Box, and your stupid movies and it takes an act of God and the promise of whore sex to get you out of our house to a social event to act like a normal adult!"
"A normal adult? So...you're telling me that we're getting a divorce because of my entertainment choices?. Because I don't want to go to a wine tasting or boring plays? You're leaving me because I don't like Brie?!?" My fists were clenched in anger.
"You're trying to make me out to be the bad guy. I'm not! I wanted a soul mate. Someone who liked and respected the things I wanted. We were supposed to grow together. But you didn't change! I grew...and I wanted more."
"So...starting an IPO before I'm 37 is nothing?"
"It's not nothing. I'm proud of what we did." she said in a mollifying fashion. "I'm not saying you're a bad guy. You're a great guy. You're just not a great guy for me."
"We? Excuse me?" I said disbelievingly.
"We. I sacrificed. The hours you were gone. Those crippling loans we took out. Making clothes last and trying to feed us on our lousy paychecks. Putting up with cold and lonely nights. Having my friends who married portfolio managers and lawyers call me and not being able to go out with them because I couldn't afford my share of the dinner check. I had to flirt with all those venture capitalists...Stop!" she said firmly. She saw the expression on my face. "I flirted. I'm not a whore. But I networked my ass off to make sure that this company got off the ground."
"So you say. What do you call a woman who screws his business partner for his share of the business?"
"I earned my share of that money." she replied hotly.
I tried to rein in my temper. "So...you're equating talking to people with actually making something. You lived with me. I cut code for days and days. You know how many 18 hour days I put in. And I know it took a toll on our marriage. But I made it. Not you in a low cut dress. Without me, all you're selling is yourself. Certainly not Andrew. There is only so long you can sell a piece of crap product without it being any good. If it wasn't for my code, he'd be selling cars in Fresno or something. Some people sleep alone in bed for decades and it doesn't do what I did."
"If I hadn't supported you, you wouldn't have been able to do what you did. I was there encouraging you and making sure you were taken care of and nursed you when you were sick. I was a good wife to you."
"Yes...a good wife. And yet as soon as you could comfortably escape, you pulled the 'eject' handle." I held my hands up to forestall her comments. "I can see, however hurtful it is, that you wanted out of the marriage. Sometimes things don't work out. But there are certain...protocols you should have followed. We fight, we file, lawyers hammer out an agreement. Maybe you get a slice of the company and a bigger money package. Maybe we just split things in half. But you should have divorced me because you were unhappy, not because you chose to fall in love with someone else. And certainly before you started fucking someone else. Marriage means that you stop shopping for the package, not that you look to trade up at the first opportunity. I don't think you're a whore; I think you're a thief."
"I was hoping that you'd come to your senses and talk your lawyer into offering me something fair." Came her flat reply.
"I'm being as fair as you were. Tell me...has it ever occurred to you that maybe Andrew is just using you to take control of the company?"
She smiled at me in that condescending way. "I'm not an idiot. It occurred to me, but it isn't likely and it doesn't matter. " Her hands gestured down her frame, over her over her breasts, her taunt waist, her thighs. "I AM the 'Package'. I'm easy to get along with and very beautiful. I can pick and choose who I want to be with. And if Andrew is foolish enough to drop me, I'll be okay. For one thing, I'll retain those shares. A proxy vote card can be reversed. And it will be an easy matter to find someone else. That's the power of the pussy."
"Yes...or a similar word starting with a 'c'." Her face grew thunderous. I slid off the chair. "I'll take your suggestions under advisement." I said diplomatically.
"Jim..." she looked at me beseechingly. "This doesn't have to get ugly. Let's be adult about this."
"You mean roll over for you to get exactly what you want? Sure." I had to get away from her. I knew she was pragmatic, but what was it they said: that pragmatism is the first step on the road to being a sociopath? It seemed to fit.
I walked out of the court house and pulled out my iPhone. That's a nice blouse... the speaker said
Allie was right in one regard: it was time for me to start growing up.
It was a slow news cycle business wise, both for the bad and the good. What this meant was that the legal problems of our IPO got a lot of press on Bloomberg and CNBC. Andrew must have sweated bullets over that.
But I noticed that suddenly, the press comments started characterizing me as the scam artist of the tech sector. The talking heads on Squawk Box were speculating that I hadn't written the code; that I willfully waited for a good increase in the stock price before I illegally sold my shares, laughing my way to the bank, while leaving the hapless workers in a lurch.
Since I wasn't a business guy, I really hadn't paid much attention to this. My mother, bless her heart, finally asked me how I could let the press walk all over me like that. If I didn't look after my interests, who would? I mean besides Swati and co.
Still, after the conversation with Allie, I realized that Andrew wasn't going to roll over either. And the way he fought was with words and sales. Now, having remembered my backdoor code...eventually, I could have snuck in and totally destroyed Ryleh. But the fingers would have pointed at me, and correctly so. Besides, I didn't want to destroy the company. I just wanted Andrew and Allie to feel pain.
My first step was to contact Allie's attorney for a phone number. The second was to scroll through my calendar. I had given a lot of business interviews in the weeks before the IPO. Maybe it was time to talk to them again...
The ugly man sat nervously across from me. Yup, it was the same process server. He was bald with a jutting lower lip and heavy features and I'd been seeing a lot of him.
"Would you like some tea?" I asked.
"I'm sorry about that day. Making you chase me around. I just needed to do a couple things before I let you serve me."
"That's fine. It was one of my more interesting days. Besides, I get paid mileage."
I laughed and started to use Google map. "Uh...what are you doing?" he asked, licking his lips.
"Maximizing your profits." I responded as I handed him the envelope to be served.
"Mister REEnalds! It is Mees Allie on the phone!"
I wonder what this was all about I smirked. I might have a guess or two.
"You ASSHOLE! You absolutely indescribable ASSHOLE!"
"Hi Allie. How are you? Still fucking Andrew?" There was a clucking sound from the hall.
"How could you do that to me? I was your wife for close to 11 years!"
"I could ask you the same, babe."
"You gave them our conversation? And those pictures???That was a private conversation between the two of us! Car salesmen are offering to show me 'the good life!' Photographers are following me around! My mother...oh God my mother! You are painting me like a gold digging whore! "
"Please, please," I said modestly, "you didn't need any help from me. But since we're on the subject, who has been feeding the news all those smears about me?" Silence was my reply. "Since you two have been using your 'social skills' to smear me as some 'Bernie Madoff', I figure I'd use the 'power of the pussy' to make sure my side of the story got at least a little play. I never thought it would go national! You should be complimented on how much of a 'package' you are. Think of it as me helping you expand your choices. Remember how long Debra LaFave was in the news?"
An incoherent scream was my only response and suddenly the line was dead. It seems that she resented the fact that I sent her little conversation to some of the reporters smearing me. Of course, I just had to add our photos from Cancun. She always favored small bikinis. I always was proud of her beauty. Now I got to share my pride. From what I could see, she was on display about three times an hour for the last three days.
All in all, it was a good day.
But on to Andrew. Allie fucked me out of a relationship and she'd have gotten part of my business no matter what, but I had to wonder how much that slimy cocksucker had worked to seduce her. From her words, she was still shopping for a life partner and neglected to tell me about that fact.
His call came a day or so later.
"Why the hell did you have me served at my gym?" His voice was guarded and suspicious. Good. I felt no need to reveal that I picked that spot out because it was farthest for the process server to drive. His kids had piano lessons. Andrew, that slimy weasel, would assume it was because of some strategic reason or to embarrass him. Let him wonder.
"Oh good. He found you. How does it feel to be ambushed?"
"Is that what this is about? Cheap revenge?"
"I consider it very expensive revenge, thank you very much."
"What do you mean 'Ipswitch Version 5.0 and all derivative software developments?' You can't do that! It would cripple the company!"
"Now now. I'm not forbidding you to use my software. But since I am no longer part of the company, I feel my efforts should be rewarded."
Cliff, the ugly process server, had ambushed Andrew at his gym with a letter of intent. You see, I had single handedly designed our original software bundles (with a little help from Karl) and it was owned by me! It was licensed to the Ipswitch company. I had done it this way because I wasn't sure if Ipswitch would get off the ground and I wanted to be able to maybe shop it to a different software company in the event of failure. After all, I had a family to support...The irony was killing me.
Because I was a founder with a huge amount of shares, the profits of our company went into my pockets, so I waived any royalty checks or reinvested it. But I had never signed any documents waiving my rights to the copyright. And there was a tricky (read expensive) legal argument that all the subsidiary versions of the software, worked on by me, were also owned by me. Sort of like a movie. I owned the character of Harry Potter, even though another writer or studio used his likeness.
"Look...we have to be able to come to some kind of accommodation. What do you want?"