The Appeal
Chapter 6
With an hour to go before trading closed, Krane bottomed at $18 a share, then began a rather feeble rally, if it could be called that. It nibbled around $20 a share for half an hour before finding some traction at that price.
To add to the catastrophe, investors for some reason chose to exact revenge on the rest of Carl's empire. His Trudeau Group owned 45 percent of Krane and smaller chunks of six other public companies-three chemical companies, an oil exploration firm, an auto parts maker, and a chain of hotels. Shortly after lunch, the common shares of the other six began slipping as well. It made no sense whatsoever, but then the market often cannot be explained. Misery is contagious on Wall Street. Panic is common and rarely understood.
Mr. Trudeau did not see the chain reaction coming, nor did Felix Bard, his savvy financial wizard. As the minutes dragged by, they watched in horror as a billion dollars in market value slipped away from the Trudeau Group.
Blame was rampant. Obviously, it all went back to the verdict in Mississippi. But many analysts, especially the babbling experts on cable, made much of the fact that Krane Chemical had for years chosen to go brazenly forward without the benefit of full liability insurance.
The company had saved a fortune in premiums, but was now giving it back in spades. Bobby Ratzlaff was listening to one such analyst on a television in a corner when Carl snapped, "Turn that thing off!"
It was almost 4:00 p.m., the magic hour when the exchange closed and the bloodshed ended. Carl was at his desk, phone stuck to his head. Bard was at the conference table watching two monitors and recording the latest stock prices. Ratzlaff was pale and sick and even more bankrupt than before, and he went from window to window as if selecting the one for his final flight.
The other six stocks rallied at the final buzzer, and though they were down significantly, the damage was not ruinous. The companies were solid performers, and their stocks would readjust themselves in due course. Krane, on the other hand, was a train wreck.
It closed at $21.25, a full $31.25 collapse since the day before. Its market value had shrunk from $3.2 billion to $1.3 billion. Mr. Trudeau's 45 percent share of the misery was about $850 million. Bard quickly added the declines from the other six companies and computed a one-day loss for his boss at $ 1.1 billion. Not a record, but probably enough to land Carl on someone's Top Ten list.
After a review of the closing numbers, Carl ordered Bard and Ratzlaff to put on their jackets, straighten their ties, and follow him.
Four floors below, in the corporate offices of Krane Chemical, its top executives were hunkered down in a small dining room reserved exclusively for themselves. The food was notoriously bland, but the view was impressive. Lunch had not been important that day; no one had an appetite. They had been waiting for an hour, shell-shocked and expecting an explosion from above. A mass funeral would have been a livelier event. But Mr. Trudeau managed to brighten up the room. He marched purposefully in, his two minions in tow-Bard with a plastic grin, Ratzlaff green at the gills-and, instead of yelling, thanked the men (all boys) for their hard work and commitment to the company.
A wide smile, and Carl said, "Gentlemen, this is not a very good day.
One which I'm sure we'll remember for a long time." His voice was pleasant, just another friendly little drop-in from the man at the top.
"But today is now over, thankfully, and we are still standing. Tomorrow, we start kicking ass."
A few nervous looks, maybe a smile or two. Most were expecting to be sacked on the spot.
He continued: "I want you to remember three things that I'm about to say on this historic occasion. First, no one in this room is losing his job. Second, Krane Chemical will survive this miscarriage of justice. And third, I do not intend to lose this fight."
He was the epitome of the confident leader, the captain rallying his troops in their foxholes. A victory sign and long cigar and he could've been Churchill in his finest hour. He ordered chins up, backs to the wall, and so on.
Even Bobby Ratzlaff began to feel better.
Two hours later, Ratzlaff and Bard were finally dismissed and sent home. Carl wanted time to reflect, to lick his wounds, to clear his head. To help matters, he fixed himself a scotch and took off his shoes. The sun was setting somewhere beyond New Jersey, and he said good riddance to such an unforgettable day.
He glanced at his computer and checked the day's phone calls. Bri-anna had called four times, nothing urgent. If she had an important matter, Carl's secretary logged it as "Your Wife" and not "Brianna." He'd call her later. He was in no mood for the summary of her daily workouts.
There were over forty calls, and number twenty-eight caught his attention. Senator Grott had checked in from Washington. Carl barely knew him personally, but every serious corporate player knew of The Senator. Grott had served three terms in the U.S. Senate from New York before he retired, voluntarily, and joined a powerful law firm to make his fortune. He was Mr. Washington, the ultimate insider, the seasoned counselor and adviser with offices on Wall Street, Pennsylvania Avenue, and anywhere else he chose. Senator Grott had more contacts than anyone, often golfed with whoever happened to occupy the White House, traveled the world in search of more contacts, offered advice only to the powerful, and was generally regarded as the top connection between big corporate America and big government.
If the Senator called, you called him back, even though you'd just lost a billion dollars. The Senator knew exactly how much you had lost and was concerned about it.
Carl dialed the private number. After eight rings a gruff voice said, "Grott."
"Senator Grott, Carl Trudeau here," Carl said politely. He was deferential to very few people, but The Senator demanded and deserved respect.
"Oh yes, Carl," came the reply, as if they had played golf many times. Just a couple of old pals. Carl heard the voice and thought of the countless times he'd seen The Senator on the news. "How is Amos?" he asked.
The contact, the name that linked both men to this call. "Great. Had lunch with him last month." A lie. Amos was the managing partner of the corporate law firm Carl had been using for a decade. Not The Senator's firm, not even close. But Amos was a substantial person, certainly big enough to be mentioned by The Senator.
"Give him my regards."
"Certainly." Now get on with it, Carl was thinking.
"Listen, I know it's been a long day, so I won't keep you." A pause. "There is a man in Boca Raton that you should see, name is Rinehart, Barry Rinehart. He's a consultant of sorts, though you'll never find him in the phone book. His firm specializes in elections."
A long pause, and Carl had to say something. So he said, "Okay. I'm listening."
"He is extremely competent, smart, discreet, successful, and expensive. And if anyone can fix this verdict, Mr. Rinehart is your man."
"Fix this verdict," Carl repeated.
The Senator continued: "If you're interested, I'll give him a call, open the door."
"Well, yes, I'd certainly be interested."
Fix this verdict. It was music.
"Good, I'll be in touch."
"Thank you."
And with that the conversation was over. So typical of The Senator. A favor here, the payback there. All contacts running to and fro, everybody's back getting properly scratched. The call was free, but one day The Senator would be paid.
Carl stirred his scotch with a finger and looked at the rest of his calls. Nothing but misery.
Fix this verdict, he kept repeating.
In the center of his immaculate desk was a memo marked "CONFIDENTIAL." Weren't all of his memos confidential? On the cover sheet someone had scrawled with a black marker the name "PAYTON." Carl picked it up, arranged both feet on his desk, and flipped through it. There were photos, the first from yesterday's trial when Mr. and Mrs. Payton were leaving the courthouse, walking hand in hand in glorious triumph. There was an earlier one of Mary Grace from a bar publication, with a quick bio. Born in Bowmore, college at Millsaps, law school at Ole Miss, two years in a federal clerkship, two in a public defender's office, past president of the county bar association, certified trial lawyer, school board, member of the state Democratic Party and a few tree-hugger groups.
From the same publication, a photo and bio of James Wesley Payton. Born in Monroe, Louisiana, lettered in football at Southern Miss, law school at Tulane, three years as an assistant prosecutor, member of all the available trial lawyer groups, Rotary Club, Civitan, and so on.
Two backwater ambulance chasers who had just orchestrated Carl's exit from the Forbes 400 list of the richest Americans.
Two children, an illegal nanny, public schools, Episcopal church, near foreclosures on both home and office, near repossessions of two automobiles, a law practice (no other partners, just support staff) that was now ten years old and was once fairly profitable (by small-town standards) but now sought refuge in an abandoned dime store where the rent was at least three months in arrears. And then the good part-heavy debts, at least $400,000 to Second State Bank on a line of credit that is basically unsecured.
No payments, not even on the interest, in five months. Second State Bank was a local outfit with ten offices in south Mississippi. Four hundred thousand dollars borrowed for the sole purpose of financing the lawsuit against Krane Chemical.
"Four hundred thousand dollars," Carl mumbled. So far he'd paid almost $14 million to defend the damned thing.
Bank accounts are empty. Credit cards no longer in use. Other clients (non-Bowmore variety) rumored to be frustrated by lack of attention.
No other substantial verdicts to speak of. Nothing close to $ 1 million.
Summary: These people are heavily in debt and hanging on by their fingernails. A little push, and they're over the edge. Strategy: Drag out the appeals, delay, delay.
Crank up pressure from the bank. Possible buyout of Second State, then call the loan.
Bankruptcy would be the only course. Huge distraction as appeals rage on. Also, Paytons would be unable to pursue their other thirty (or so) cases versus Krane and would probably decline more clients.
Bottom line: this little law firm can be destroyed.
The memo was unsigned, which was no surprise, but Carl knew it was written by one of two hatchet men working in Ratzlaff's office. He'd find out which one and give the boy a raise. Good work.
The great Carl Trudeau had dismantled large conglomerates, taken over hostile boards of directors, fired celebrity CEOs, upset entire industries, fleeced bankers, manipulated stock prices, and destroyed the careers of dozens of his enemies.
He could certainly ruin a garden-variety mom-and-pop law firm in Hattiesburg, Mississippi.
Toliver delivered him home shortly after 9:00 p.m., a time selected by Carl because Sadler would be in bed and he would not be forced to dote on a child he had no interest in. The other child could not be avoided. Brianna was waiting, dutifully, for him.
They would dine by the fire.
When he walked through the door, he came face-to-face with Imelda, already permanently ensconced in the foyer and looking more abused than the night before. He couldn't help but gawk at the sculpture. Did the pile of brass rods really resemble a young girl? Where was the torso? Where were the limbs? Where was her head?
Had he really paid that much money for such an abstract mess?
And how long might she haunt him in his own penthouse?
As his valet took his coat and briefcase, Carl stared sadly at his masterpiece, then heard the dreaded words "Hello, darling." Brianna swept into the room, a flowing red gown trailing after her. They pecked cheeks.
"Isn't it stunning?" she gushed, flopping an arm at Imelda.
"Stunning is the word," he said.
He looked at Brianna, then he looked at Imelda, and he wanted to choke both of them.
But the moment passed. He could never admit defeat.
"Dinner is ready, darling," she cooed.
"I'm not hungry. Let's have a drink."
"But Claudelle has fixed your favorite-grilled sole."
"No appetite, dear," he said, yanking off his tie and tossing it to his valet.
"Today was awful, I know," she said. "A scotch?"
"Yes."
"Will you tell me about it?" she asked.
"I'd love to."
Brianna's private money manager, a woman unknown to Carl, had called throughout the day with updates on the collapse. Brianna knew the numbers, and she had heard the reports that her husband was down a billion or so.
She dismissed the kitchen staff, then changed into a much more revealing nightgown.
They met by the fire and chatted until he fell asleep.
To add to the catastrophe, investors for some reason chose to exact revenge on the rest of Carl's empire. His Trudeau Group owned 45 percent of Krane and smaller chunks of six other public companies-three chemical companies, an oil exploration firm, an auto parts maker, and a chain of hotels. Shortly after lunch, the common shares of the other six began slipping as well. It made no sense whatsoever, but then the market often cannot be explained. Misery is contagious on Wall Street. Panic is common and rarely understood.
Mr. Trudeau did not see the chain reaction coming, nor did Felix Bard, his savvy financial wizard. As the minutes dragged by, they watched in horror as a billion dollars in market value slipped away from the Trudeau Group.
Blame was rampant. Obviously, it all went back to the verdict in Mississippi. But many analysts, especially the babbling experts on cable, made much of the fact that Krane Chemical had for years chosen to go brazenly forward without the benefit of full liability insurance.
The company had saved a fortune in premiums, but was now giving it back in spades. Bobby Ratzlaff was listening to one such analyst on a television in a corner when Carl snapped, "Turn that thing off!"
It was almost 4:00 p.m., the magic hour when the exchange closed and the bloodshed ended. Carl was at his desk, phone stuck to his head. Bard was at the conference table watching two monitors and recording the latest stock prices. Ratzlaff was pale and sick and even more bankrupt than before, and he went from window to window as if selecting the one for his final flight.
The other six stocks rallied at the final buzzer, and though they were down significantly, the damage was not ruinous. The companies were solid performers, and their stocks would readjust themselves in due course. Krane, on the other hand, was a train wreck.
It closed at $21.25, a full $31.25 collapse since the day before. Its market value had shrunk from $3.2 billion to $1.3 billion. Mr. Trudeau's 45 percent share of the misery was about $850 million. Bard quickly added the declines from the other six companies and computed a one-day loss for his boss at $ 1.1 billion. Not a record, but probably enough to land Carl on someone's Top Ten list.
After a review of the closing numbers, Carl ordered Bard and Ratzlaff to put on their jackets, straighten their ties, and follow him.
Four floors below, in the corporate offices of Krane Chemical, its top executives were hunkered down in a small dining room reserved exclusively for themselves. The food was notoriously bland, but the view was impressive. Lunch had not been important that day; no one had an appetite. They had been waiting for an hour, shell-shocked and expecting an explosion from above. A mass funeral would have been a livelier event. But Mr. Trudeau managed to brighten up the room. He marched purposefully in, his two minions in tow-Bard with a plastic grin, Ratzlaff green at the gills-and, instead of yelling, thanked the men (all boys) for their hard work and commitment to the company.
A wide smile, and Carl said, "Gentlemen, this is not a very good day.
One which I'm sure we'll remember for a long time." His voice was pleasant, just another friendly little drop-in from the man at the top.
"But today is now over, thankfully, and we are still standing. Tomorrow, we start kicking ass."
A few nervous looks, maybe a smile or two. Most were expecting to be sacked on the spot.
He continued: "I want you to remember three things that I'm about to say on this historic occasion. First, no one in this room is losing his job. Second, Krane Chemical will survive this miscarriage of justice. And third, I do not intend to lose this fight."
He was the epitome of the confident leader, the captain rallying his troops in their foxholes. A victory sign and long cigar and he could've been Churchill in his finest hour. He ordered chins up, backs to the wall, and so on.
Even Bobby Ratzlaff began to feel better.
Two hours later, Ratzlaff and Bard were finally dismissed and sent home. Carl wanted time to reflect, to lick his wounds, to clear his head. To help matters, he fixed himself a scotch and took off his shoes. The sun was setting somewhere beyond New Jersey, and he said good riddance to such an unforgettable day.
He glanced at his computer and checked the day's phone calls. Bri-anna had called four times, nothing urgent. If she had an important matter, Carl's secretary logged it as "Your Wife" and not "Brianna." He'd call her later. He was in no mood for the summary of her daily workouts.
There were over forty calls, and number twenty-eight caught his attention. Senator Grott had checked in from Washington. Carl barely knew him personally, but every serious corporate player knew of The Senator. Grott had served three terms in the U.S. Senate from New York before he retired, voluntarily, and joined a powerful law firm to make his fortune. He was Mr. Washington, the ultimate insider, the seasoned counselor and adviser with offices on Wall Street, Pennsylvania Avenue, and anywhere else he chose. Senator Grott had more contacts than anyone, often golfed with whoever happened to occupy the White House, traveled the world in search of more contacts, offered advice only to the powerful, and was generally regarded as the top connection between big corporate America and big government.
If the Senator called, you called him back, even though you'd just lost a billion dollars. The Senator knew exactly how much you had lost and was concerned about it.
Carl dialed the private number. After eight rings a gruff voice said, "Grott."
"Senator Grott, Carl Trudeau here," Carl said politely. He was deferential to very few people, but The Senator demanded and deserved respect.
"Oh yes, Carl," came the reply, as if they had played golf many times. Just a couple of old pals. Carl heard the voice and thought of the countless times he'd seen The Senator on the news. "How is Amos?" he asked.
The contact, the name that linked both men to this call. "Great. Had lunch with him last month." A lie. Amos was the managing partner of the corporate law firm Carl had been using for a decade. Not The Senator's firm, not even close. But Amos was a substantial person, certainly big enough to be mentioned by The Senator.
"Give him my regards."
"Certainly." Now get on with it, Carl was thinking.
"Listen, I know it's been a long day, so I won't keep you." A pause. "There is a man in Boca Raton that you should see, name is Rinehart, Barry Rinehart. He's a consultant of sorts, though you'll never find him in the phone book. His firm specializes in elections."
A long pause, and Carl had to say something. So he said, "Okay. I'm listening."
"He is extremely competent, smart, discreet, successful, and expensive. And if anyone can fix this verdict, Mr. Rinehart is your man."
"Fix this verdict," Carl repeated.
The Senator continued: "If you're interested, I'll give him a call, open the door."
"Well, yes, I'd certainly be interested."
Fix this verdict. It was music.
"Good, I'll be in touch."
"Thank you."
And with that the conversation was over. So typical of The Senator. A favor here, the payback there. All contacts running to and fro, everybody's back getting properly scratched. The call was free, but one day The Senator would be paid.
Carl stirred his scotch with a finger and looked at the rest of his calls. Nothing but misery.
Fix this verdict, he kept repeating.
In the center of his immaculate desk was a memo marked "CONFIDENTIAL." Weren't all of his memos confidential? On the cover sheet someone had scrawled with a black marker the name "PAYTON." Carl picked it up, arranged both feet on his desk, and flipped through it. There were photos, the first from yesterday's trial when Mr. and Mrs. Payton were leaving the courthouse, walking hand in hand in glorious triumph. There was an earlier one of Mary Grace from a bar publication, with a quick bio. Born in Bowmore, college at Millsaps, law school at Ole Miss, two years in a federal clerkship, two in a public defender's office, past president of the county bar association, certified trial lawyer, school board, member of the state Democratic Party and a few tree-hugger groups.
From the same publication, a photo and bio of James Wesley Payton. Born in Monroe, Louisiana, lettered in football at Southern Miss, law school at Tulane, three years as an assistant prosecutor, member of all the available trial lawyer groups, Rotary Club, Civitan, and so on.
Two backwater ambulance chasers who had just orchestrated Carl's exit from the Forbes 400 list of the richest Americans.
Two children, an illegal nanny, public schools, Episcopal church, near foreclosures on both home and office, near repossessions of two automobiles, a law practice (no other partners, just support staff) that was now ten years old and was once fairly profitable (by small-town standards) but now sought refuge in an abandoned dime store where the rent was at least three months in arrears. And then the good part-heavy debts, at least $400,000 to Second State Bank on a line of credit that is basically unsecured.
No payments, not even on the interest, in five months. Second State Bank was a local outfit with ten offices in south Mississippi. Four hundred thousand dollars borrowed for the sole purpose of financing the lawsuit against Krane Chemical.
"Four hundred thousand dollars," Carl mumbled. So far he'd paid almost $14 million to defend the damned thing.
Bank accounts are empty. Credit cards no longer in use. Other clients (non-Bowmore variety) rumored to be frustrated by lack of attention.
No other substantial verdicts to speak of. Nothing close to $ 1 million.
Summary: These people are heavily in debt and hanging on by their fingernails. A little push, and they're over the edge. Strategy: Drag out the appeals, delay, delay.
Crank up pressure from the bank. Possible buyout of Second State, then call the loan.
Bankruptcy would be the only course. Huge distraction as appeals rage on. Also, Paytons would be unable to pursue their other thirty (or so) cases versus Krane and would probably decline more clients.
Bottom line: this little law firm can be destroyed.
The memo was unsigned, which was no surprise, but Carl knew it was written by one of two hatchet men working in Ratzlaff's office. He'd find out which one and give the boy a raise. Good work.
The great Carl Trudeau had dismantled large conglomerates, taken over hostile boards of directors, fired celebrity CEOs, upset entire industries, fleeced bankers, manipulated stock prices, and destroyed the careers of dozens of his enemies.
He could certainly ruin a garden-variety mom-and-pop law firm in Hattiesburg, Mississippi.
Toliver delivered him home shortly after 9:00 p.m., a time selected by Carl because Sadler would be in bed and he would not be forced to dote on a child he had no interest in. The other child could not be avoided. Brianna was waiting, dutifully, for him.
They would dine by the fire.
When he walked through the door, he came face-to-face with Imelda, already permanently ensconced in the foyer and looking more abused than the night before. He couldn't help but gawk at the sculpture. Did the pile of brass rods really resemble a young girl? Where was the torso? Where were the limbs? Where was her head?
Had he really paid that much money for such an abstract mess?
And how long might she haunt him in his own penthouse?
As his valet took his coat and briefcase, Carl stared sadly at his masterpiece, then heard the dreaded words "Hello, darling." Brianna swept into the room, a flowing red gown trailing after her. They pecked cheeks.
"Isn't it stunning?" she gushed, flopping an arm at Imelda.
"Stunning is the word," he said.
He looked at Brianna, then he looked at Imelda, and he wanted to choke both of them.
But the moment passed. He could never admit defeat.
"Dinner is ready, darling," she cooed.
"I'm not hungry. Let's have a drink."
"But Claudelle has fixed your favorite-grilled sole."
"No appetite, dear," he said, yanking off his tie and tossing it to his valet.
"Today was awful, I know," she said. "A scotch?"
"Yes."
"Will you tell me about it?" she asked.
"I'd love to."
Brianna's private money manager, a woman unknown to Carl, had called throughout the day with updates on the collapse. Brianna knew the numbers, and she had heard the reports that her husband was down a billion or so.
She dismissed the kitchen staff, then changed into a much more revealing nightgown.
They met by the fire and chatted until he fell asleep.
