Texas Gal
by C. Sprite
© 2001

 

Chapter Twenty-Two Happy New Year Vermont!

Four days later Susan and I left on the corporate plane. We stopped briefly in West Virginia so that Susan could leave the plane, and then, after a company employee had arrived to pick her up, we proceeded to Vermont. As I got off the plane I was struck by a blast of cold arctic air. As I struggled to keep my hat and skirt in place, Earl stepped forward and took my arm to lead me to the car.

"Hello Earl," I sputtered into the biting wind. "Don't tell me that you're still working up here?"

"Hello Miss Darla. No, I've been back home. I was only sent up here to drive for you while you're here. After you leave I go back home again."

"I hope that you had a nice Christmas and a Happy New Year."

"Yes, ma'am. It's about the only time that I get to see most of the family these days."

Earl helped me into the car and then put my luggage into the trunk. As we drove out of the airport, we saw the plane taking off for its return to West Virginia so that it would be available for Susan's use. Earl drove straight to the Holiday Inn and I checked in. It was dinnertime here and, since I hadn't eaten lunch, I went to the dining room right after I hung up my clothes and put my things in the dresser. The special for today was Lobster Newburg and I enjoyed it immensely. When I returned to my room, I re-read through all of the weekly transcripts that I had received since I had left in September, and then went to sleep. I had arranged with Nancy to schedule one on one meetings for tomorrow with all of the senior level managers, allowing one hour for each.

 

Earl was waiting for me with the car at 7:30 in the morning. I dressed in warmer clothes this morning than I had worn yesterday. My skirt was much longer, extending to my calves, and I had put on a pair of boots that came up almost to my knees. The arctic blasts from yesterday had taught me a lesson. Earl had already warmed up the car and the rear seat area was warm and cozy for the ride to the plant.

The guard at the entrance to the plant grounds stepped out of the booth and saluted as we entered, and I noticed that the parking lot was about 1/3 full. That would be about as full as it would get until we started production in the second factory building. The other extra spaces would be needed during shift changes.

Earl dropped me off at the front entrance and I climbed the stairs to the front door. As I walked in Doris smiled and said, "Good morning, Miss Drake. Welcome back."

I smiled back and said, "Good morning, Doris. Thank you," as I proceeded to the elevator.

When I entered the executive suite area, Nancy greeted me with, "Good morning, Miss Drake. Welcome back to Vermont. Did you have a nice holiday?"

"Good morning, Nancy. Thank you, I did. How about you?"

"Very nice, Miss Drake."

"That's wonderful, Nancy. Any messages?"

"No, Miss Drake. But here's the schedule for your meetings. The first is with Bob Warren at ten. That's the earliest that he could make it. He already had a nine o'clock meeting scheduled with Mr. Harris from Purchasing and a representative from a company that we buy chemicals from."  

"That's fine, Nancy. Thank you."

"You're welcome, Miss Drake."

I walked to my office and removed my coat and gloves. There was a fresh pot of tea on the stove so I poured myself a cup and sat at my desk. I swiveled around so that I could look out at the snow-covered mountains as I enjoyed my tea, and thought about my meetings with the managers. After I had finished my tea and then put on my coat and gloves, I picked up the phone and told Nancy that I was going over to the factory. I had almost an hour and a half before my meeting with Bob so I would have plenty of time for a tour. I used the rear stairs and exited the office building by the door closest to the plant so that I would be out in the cold for only a few minutes.

The plant was alive with activity. It was the beginning of the first shift on the first day of the new workweek, so there was a lot to do in getting the plant into full operation. I stood quietly by and watched as people did their jobs with the efficiency that comes from years of experience. I received a lot of 'Good Morning's' and responded in kind. I didn't know most of their names, so all of the greetings were a bit formal. About halfway though my tour I happened upon John Fahey. He was working on a piece of machinery with several other men. When he saw me he stopped what he was doing and came over. His hands were black with grease, so I didn't offer mine in greeting.

"Good morning, DD. Welcome back. Were you looking for me?"

"Good morning, John. No, I was just taking a tour through the plant. Having a problem with that machine?"

"Yeah, nothing major though, just a stripped gear. We'll have it going very shortly. That fella with the red hair is Mike O'Connell. He's one of my best engineers. Joined us in October. He used to work for a paper box manufacturer down in Massachusetts."

Just then Mr. O'Connell straightened up after removing something from the machine. He looked around and when he spotted John with me he made a gesture with his head indicating that he wanted to see John. I said, "Well, I don't want keep you from your work. We'll have a chance to talk later in our meeting."

"Okay, I'll see you at two."

John walked back to the small group that was working on the machine and I continued my tour around the plant, ending up in the warehouse. The warehouse, largely empty when I had first visited before buying the company was now about half filled with pallets of paper rolls or stacks of paperboard. Several forklift operators were moving pallets and very large rolls, either in from the plant or out to the loading dock as I watched. There were five tractor-trailers parked at the enclosed loading area, and although all of the overhead doors were down, it was still cold out there. Although the 56 degrees F that I read on a large wall mounted thermometer was mild when compared to the frigid weather outside.

Glancing at my watch I saw that it was almost 9:45 so I headed back to my office. A cup of tea helped to warm me up after I returned. I brewed a pot of coffee in the small percolator that I had in the kitchen and sat down to wait for Bob Warren. I used my time to mull over several ideas that had come to me while visiting the plant.

At almost exactly 10 o'clock, there was a knock at my door and Bob came in when I responded.

"DD, welcome back to Vermont."

"Thank you, Bob. Good morning. Did you have a nice holiday?"

"Very nice. You?"

"Wonderful, thank you. Would you like some coffee? I just made a fresh pot."

"Sounds great."

"Help yourself. You know where everything is."

As Bob went to prepare his coffee, I moved from my desk to a comfortable chair in my sitting area. There was an extension telephone on the coffee table so it was easy to conduct business from there.

After Bob had taken a chair across from me I said, "I've read all of the transcripts from the weekly meetings, but I wanted to get a personal update on how things have been going since I left. How have you been doing? All settled in here now?"

"Yes. My wife and kids joined me in September after Mrs. Moore approved my transfer. We found a nice house and moved our furnishings from the Portland house in November. The kids have adjusted pretty well and like their new school and friends. My wife has also adjusted well and is happy with the smaller community. She never really liked the city life. We all went to my brother's house for the holidays. It was great to see family at other than at a wedding or funeral. We've sold the house in Portland and expect to close in a few weeks."

"That's great, Bob. I'm happy that moving your family here went so well."

"Thanks. I've heard horror stories from other execs. I guess that we were lucky that everything went so smoothly."

"How is everything going with the company?"

"Great. We're running a full first and second shift now in plant 1, and getting ready to start the third. We've already made the reassignments of personnel from the two shifts to the third. There was a little grousing, I've heard, but they understand that it's only temporary until the incoming employees are checked out, then we'll shift the newer people to the third shift and the others can return to their original shift, unless they want to stay on the third. We've instituted the 5 percent second shift bonus and 10 percent third shift bonus that you approved."

"When do you expect to begin the third shift operations?"

"Two weeks from today. The twentieth of January is the start date. Virtually all of the new employees are furloughed workers so re-training should be minimal and we expect a smooth transition. We've notified the selected employees so they can give their present employers two weeks notice. With this hiring we'll have brought back 72 percent of the former staff that are still interested in employment here. We've identified almost 8 percent as being 'undesirable' for re-employment, so we'll have to find new people as we gear up operations in the plant 2."

"When do you foresee that happening?"

"At the rate that Matt's crew is bringing in the orders, I would say March. We want to be ready before we need it so that we don't have any product shortage problems. John and his guys have already begun cleaning, lubrication, and preventative maintenance on the equipment to keep busy when they aren't working in Plant 1."

"That's wonderful, Bob. I took a tour of the plant today and was impressed with the activity. I see that the warehouse is filling up."

"Almost everything in the warehouse is sold and just awaiting shipment. Some companies space out their shipments because they don't have much warehouse space of their own. We ship to some printers twice a week so that they can maintain their inventory at maximum. They're always afraid that a wild-cat Teamster's strike will prevent them getting paper when they need it."

"I see," I said. "Bob, I was wondering if there had ever been any plans to have an enclosed walkway built between the office building and the plant?"

"Not to my knowledge, but it would be a great idea. It would sure be useful this time of year."

"Since our five year plan calls for a small cafeteria in the basement we should give it some thought so that the plant workers don't have to get all bundled up just to get to the cafeteria in the winter time."

"I agree. Since the two plants are already attached, only one walkway would be needed and then all of the buildings would be connected. The main problem would appear to be that the area between this building and the plants is used for truck traffic. So it would have to be an elevated walkway that would allow at least 15 feet clearance."

We sat in silence for a few minutes as we thought about the proposal.

I broke the silence with "Maybe not, how about a tunnel? It would be better protected from the elements, and would be easier on the legs. An overhead walk would mean climbing or descending two stories to access the basement cafeteria. A tunnel would only mean one story at the plant side and half a story at the office building side since half of the basement is above ground."

"That would work, but it would require extra reinforcing because of the weight of the trucks carrying wood chips and other materials in and outgoing paper shipments."

"That shouldn't present overwhelming problems since we're only talking about a tunnel that's four or five feet wide. The load stress on such a short distance should be handled easily."

We spent the rest of our hour discussing the tunnel and cafeteria. We agreed that the project could be completed by midsummer. Bob would have an architect draw up the plans for the modifications so that we could get building commission approval for the project. When Nancy called to let me know that Bill Marshall was waiting, Bob and I wrapped up our talk. On his way out he told Bill to come in.

We spent a few minutes on the greetings and social niceties, and then sat down to talk after Bill had fixed himself a cup of coffee.

"How is everything in Accounting, Bill."

"Fine, DD. I'm sure that you get copies of the reports that I give to Bob, plus the transcripts of the meetings."

"Yes, but I'd like to hear it from you. Why don't you give me a quick summary of things since I left in September?"

"Okay. We've brought all of our accounts payable current, and are even taking advantage of early payment discounts where they are available. Account receivables are about normal for the industry. We've collected almost all of the money that was owed to Piermont when we took over. The rest will probably have to be written off. Credit and shipments to those accounts have been suspended. Our cash position is excellent. If we weren't a closed corporation, we would probably be a target for a takeover attempt. We've filled all of our vacant positions in the Accounting department and I expect to turn over control to my deputy sometime next month so that I can return to Ameri-Moore. Ron's a good man and he'll do an excellent job here."

"That sounds fine, Bill. You've done an excellent job here yourself and it's been appreciated."

Bill smiled. "Thank you, DD. But I'm sort of looking forward to being home again even though my wife and I are divorced. It gets cold in Portland, but seldom like it is here."

I smiled. "I know what you mean. I've gotten used to Texas weather over the past couple of years."

We spent the rest of our hour chatting about Piermont and Ameri-Moore. At noon we broke up and Bob left to keep a lunch appointment with his deputy Ron Collins. Just after he left, Nancy called me from her desk to say that my lunch had arrived.

"Lunch? I didn't order any lunch."

"It's from the B&B. Mr. Piermont ordered it for you. Would you like it brought in?"

"Yes. Thank you."

A few minutes later Matt Piermont walked in carrying a tray. "Good Afternoon, DD. Your lunch has arrived."

"Matt, how nice to see you again. This is certainly a surprise."

"The pleasure is mine. Your meal will be ready in a few minutes. We just have to warm it up a little bit in the Radar Range. It's so cold outside that the crab cakes have probably frozen."

As Matt went to the kitchen I went to use the bathroom. The several cups of tea that I had enjoyed had filled my bladder. When I came out he had set two places on the conference table.

"I hope that I'm not imposing. Nancy said that you didn't have any visitors scheduled for the noon hour and Earl told me that you hadn't made any plans to go anywhere. And I'm your one o'clock anyway."

"No imposition at all. I'm delighted to see you. I was only going to open a can of soup for lunch."

"Well I think that you will enjoy this much more."

"I'm sure of it."

As in the past, the food from the B&B was delicious. Even after it had been warmed up in the special oven. During the meal we talked about the company. Matt gave me a list of the major accounts that he had brought back to the company, and named the ones that he was still working on.

"I'll bet that the execs at South-Core are fuming. They had gotten most of the business that we lost. So they not only lost out on acquiring Piermont, but they lost a whole lot of business as well."

"I prefer to think that they just had a bumper crop for a few years."

Matt smiled. "I doubt if they share that sentiment. And I love it. Don't get me wrong. I'm delighted that you got the company, but I sure was pissed… uh, sorry… peeved… when they rejected my offer to buy me out."

"Understandable. They had you with your back to the wall and they figured that they could squeeze you a lot more."

"Yeah. I love the way it turned out."

"Matt, did you ever consider having an enclosed walkway built to connect the office building with the plants."

"Originally, plant # 2 was supposed to have been built between the office building and plant # 1, but then the fire underwriters told us that our coverage would be increased substantially due to the extra risk of having all of the buildings clustered too closely. To reduce our potential insurance costs we moved the building site to its present location. All of the connection points have special fireproof doors that will close automatically if a fire is detected. The warehouse is similarly protected. We talked about installing a covered walkway but never firmed up plans."

I told Matt about my idea for a tunnel and we discussed it at length. He was all in favor of the idea, especially since we would be moving ahead with the cafeteria idea. We discussed a number of other issues and the rest our time together passed quickly. I didn't realize the time until Nancy phoned to say that John Fahey was waiting. Matt and I quickly cleaned up our lunch mess and he left.

I had made a fresh pot of coffee and tea while Matt was there so John fixed himself a cup and joined me in my sitting area. He had cleaned up since our earlier meeting so I didn't hesitate to offer my hand this time. We spent the first ten minutes on small talk.

"So, John. I understand you're preparing the equipment in Plant 2 for operation."

"Yes, ma'am. We'll need it soon enough. Now that I have a full compliment of people on my crew, we actually have more help than we need for the two shifts so it makes sense to do the work now."

"Yes, it does. So you feel that everything is progressing fine?"

"Better then fine. Everything is great. I can't believe that it's only been four months since you came looking for a tour of the plant."

"Neither can I sometimes."

"I do think that you'll have to review your plans for output though."

"What do you mean?"

"Well, I know that you wanted to get into producing data processing forms, but it appears now that we'll need all of the resources of the two plants just to produce our present types of paper."

"You believe that there won't be any excess capacity?"

"Yes, there'll be some, but it won't be enough to produce the different kinds of paper that we want to make, according to the business plan. Matt's sales team has been too successful."

"Well… I can't complain about being too successful. We'll just have to put off our plans for the new lines."

"There is a possible solution."

"Oh?"

"Do you remember Mike O'Connell, the fella that I pointed out this morning?"

"Yes."

"Mike used to work for a paper box company called Oak Mill Paper about an hour and a half from here. They're only set up to take paperboard stock and make boxes at present, but they used to produce their own paper and paperboard and the equipment is still there. They have a ton more factory space than we have here, and more than enough equipment to match our output capability and still operate the paper box business."

"You're suggesting that we lease the space and paper producing equipment from them?"

"No, I'm suggesting that you consider buying them out."

"Buy them? Is it for sale?"

"Not yet, but it will be."

"How do you know?"

"The old man who owned the company passed away about five years ago. He didn't have any children so he left it to two nephews and a cousin. As soon as they took over they started buying fancy cars, vacation homes, and some say, drugs. They ate up the company's cash reserves, and then started making cutbacks to reduce expenses and fund their lifestyles. They reduced the staff to less than bare minimums. Then they halted the paper production. They had to close that part of the plant a couple of years ago after they didn't pay their bills to the companies that were supplying the raw materials, and chemicals. They've left several suppliers holding big bills. They owe us too, for paper and paperboard stock. We shut them off after you took over but they still have a large outstanding balance. They're making small payments to everyone and that has stalled legal action so far, but it's only a matter of time. I give them less than a year."

"You seem to know a lot. I take it that you learned most of this from Mike O'Connell."

"Yeah. Mike's brother still works there. He's put in an job application to come here because the writing's on the wall."

"How much do you think that they'll ask?"

"I have no idea. I'm sure that it would be more than you paid for Piermont because their operation is potentially much larger. They own the company outright so there's no threat of foreclosure by a bank but there is a threat of bankruptcy. If you go down there and offer them a buyout like you did with Matt, assuming all debts and paying them say… three or four million for their interest, I think that they would jump at it based on what Mike has said."

"Their debts could easily exceed a couple of million."

"I don't think so. Mike's brother's wife works in accounting. He says that all their accounts payable don't exceed a million. I think that it would be a great deal at five million."

"But there could be private deals and liens that she doesn't know anything about."

"It's always possible. You'd have to find out from the owners."

"And the equipment for producing paper is in good condition?"

"They kept cutting expenses so proper maintenance suffered. It will take a bit of work to put it back into good working condition, but Mike says that the equipment is basically sound, even though it looks terrible outwardly. That might be why they haven't sold it up until now. It has to be stripped down, cleaned or painted, repaired, and reassembled."

"Okay, John. Thank you for the suggestion. Let me think about it and maybe do some investigation."

After he left I thought about John's suggestion. If things were not going so well, I wouldn't have even considered it, but Grandma said that I should take advantage of good deals when I found them, so I called Bill Marshall.

"Hello, Bill. This is DD. I'd like you to do something for me. I want to learn everything that I can about a company called Oak Mill Paper. I understand that they've left us holding a delinquent account. Would you look into it please? I'll need everything that you can dig up by Wednesday, but I'd like an interim report tomorrow morning. Oh, and I don't want anyone to know that we are inquiring other than as an interested creditor. Thank you, Bill."

Next I called Matt Piermont. I still had 20 minutes before my next appointment.

"Hello, Matt. Do you have a local attorney that I could call for some legal advice? We have in-house attorney's in Portland but I want someone more familiar with Vermont and Massachusetts law. …Jeff Goldblum. Is he right here in town? …Good. Can he be trusted to be discreet about our business? …Great. Thanks Matt."

I called Nancy and asked her to call Mr. Goldblum and call me back when she reached him. A few minutes later, she called and said that he was on the line so I had her put the call through.

"Good Afternoon, Mr. Goldblum, this is Darla Anne Drake. I was wondering if we might get together tomorrow here at Piermont. …Good. What time would be good for you? …Wonderful! I'll see you at 10 o'clock."

When I finished my call, Nancy phoned to say that Tom Harris was waiting. I asked her to send him in.

We sat and discussed Purchasing and Procurement for about twenty minutes. Everything was running smoothly and we wrapped up our talk early. Before Tom left I asked him about Oak Mill Paper.

"You mean that company just over the border in Massachusetts?"

"Possibly. I'm not sure exactly where they are. I know that they owe us money. I was wondering if you knew anything about them since you spend a lot of time talking to suppliers that also service them."

"I've heard that they owe a bunch of people. A number of companies have cut them off so the reps don't stop there anymore."

"Do me a favor, Tom. Make a few calls and see if you can find out who's still supplying them and how much they owe. If anyone asks, just tell them that they owe us quite a bit of money and we are trying to determine their fiscal stability."

"I'll be happy to, DD."

"Thank you, Tom. Have a nice evening."

My next two appointments were with Ben Phillips of Personnel and Mike Turbill of Plant and Warehouse Operations. Both had little to report that I didn't already know, but we enjoyed a cup of tea or coffee together and made some small talk for a while.

Right after Mike left at 5:30 I called Earl and told him that I was ready to leave. On the way out I picked up a book that I had started on my last visit, with the intention of doing some reading after dinner.

 

I was in the office the next morning when Mr. Goldblum arrived. Nancy showed him in and fixed him a cup of coffee while we sat down to talk.

"It's a real pleasure to meet you Miss Drake. I've heard so much about you that I thought that you must be ten feet tall."

I giggled and said, "Just a little more than half of that, Mr. Goldblum."

He smiled and said, "Perhaps only literally. But what is it that I can do for you?"

"I need information from someone familiar with Vermont and Massachusetts law. I would like to retain you to provide legal advice to Piermont Paper, and whatever other legal services are required. Matt Piermont says that you are a competent attorney who knows how to protect his client's secrets."

"Within the confines of the law. As an officer of the court I can't be a party to anything illegal."

"Of course. It will be your job to make sure that we remain within the law at all times."

"Then I'm your man."

"Good. For your first job I will tell you that I am considering making an offer on a property that has not yet come on the market. The company is fiscally unsound and I want to make sure that our exposure is limited to those debts that we aware of at the time that we ink an agreement, if an agreement can be reached. I'm sure that this will entail investigation of county and state records for any possible liens that may be in existence at the time that agreement is reached."

"All liens should be recorded in the county clerk's office. That's pretty much the standard rule throughout New England."

"Do you have someone working for you who can make discrete investigations?"

"Yes. I have an investigator that does work for me. He has always been discrete. Who is it that you wish to have investigated?"

"There's a company named Oak Mill Paper in Greenfield, Massachusetts. As I said, they are fiscally unsound. They owe us for deliveries and I know that they owe many others. The word that I get is that they won't last a year."

"How soon do you need the information?"

"Yesterday. My time here is limited."

"I see. Well, my investigator charges a premium for immediate services."

"How much of a premium?"

"Double."

"Agreed."

"Very well. I'll call him as soon as I get back to my office."

"Why wait. My phone is available. I need the report by 8 am Thursday."

While I went to get another cup of coffee for Mr. Goldblum and tea for myself, he called his investigator and sent him to find the information.

"Okay, Miss Drake. You shall have a report by 8 am Thursday."

"Fine, Mr. Goldblum. I'll need you to prepare the initial paperwork in case we can reach agreement, and to work with our bank's attorneys and our corporate attorneys to complete the transaction."

"I'm at your disposal, Miss Drake. May I call you DD? I understand that that's the way that you are referred to here in town."

"Of course, Mr. Goldblum."

"Call me Jeff, please."

"Very well, Jeff. Can you advise me as to what questions I should ask as we enter negotiations? And what should be included in the Letter of Intent to cover our backs while still being binding upon the other party?"

Over the next hour Jeff instructed me in the things that I had to know before agreeing to purchase a property in financial trouble, or any property for that matter. When we were done, he gave me his private numbers so that I could reach him after hours should the need arise. As soon as he was gone, Nancy phoned to say that Bill Marshall was waiting to see me, so I asked her to send him in. A couple of minutes later I was holding a thick file.

"That's everything that I could dig up quickly. There's a Dun & Bradstreet report, copies of all of their purchases from us and the outstanding invoices. There are a lot of notes that I took after calling around to my counterparts in other companies that have had dealings with them. I heard a lot of reports about their failure to meet shipping deadlines, poor quality boxes, and mixed up orders. Bottom line is that I don't expect them to survive. We may not be able to recover all of the money that they owe us. A bankruptcy seems likely."

"Thank you, Bill.  I appreciate your handling this so quickly. From what I've heard I tend to agree with your assessment. Oak Mill Paper will not survive another year."

"I saw Mr. Goldblum leaving. Are you anticipating legal action against Oak Mill Paper?"

"You know Mr. Goldblum?"

"He handled the transaction when Bob Warren bought his house. I met him at the house warming party."

"I'm not planning any action against Oak Mill yet. I just wanted some legal advice about Vermont and Massachusetts law. Thank you again for the report, Bill."

"You're welcome, DD."

After he left I carefully read through everything in the folder. The picture of Oak Mill's future just got bleaker and bleaker.

I made a lunch from some vegetables and fruit that I found in the refrigerator. Nancy was wonderful in the way that she provided for me.

After lunch Tom Harris visited me. He had completed a report about Oak Mill also. Everything in it confirmed everything that I had learned so far. I thanked him and then spent some time reviewing the report.

At three o'clock I asked Nancy to place a call to Oak Mill Paper and try to get whoever was in charge on the phone. Ten minutes later she called to say that she had a Mr. Grunen, the plant manager, on the line. I asked Nancy to find John Fahey and ask him to come to my office with Mike O'Connell, after putting the call through.

"Hello, Mr. Grunen, this is Darla Anne Drake."

"Hello Miss Drake. It's a pleasure to speak with you."

"You've heard of me?"

"I doubt if there's anyone in the business that hasn't heard of you. There've been several articles in The Paper Press."

"Really. I'll have to look and see what they're saying about me. Nothing too bad I hope."

"Only things like, you walk on water, and turn lead into gold."

"Perhaps a slight exaggeration. I haven't really perfected that lead into gold thing."

He laughed. "After what you did for Piermont, I'm willing to believe that you are only being modest. Can you do the same thing for us?"

"Do you need it?"

"I'm sure that you know our situation. It's common knowledge. We sure need something."

"Are you empowered to represent the owners?"

"Me? Heck no. I was only a shift supervisor until last year when top management walked out after the owner cut everyone's salary thirty percent. I have to get permission to buy a box of paper clips."

"Do you have permission to give me a tour of your plant?"

"That I can do. Name the day."

"Thursday, 1 pm."

"I'll be looking forward to meeting you."

"Are the owners available?"

"They're not here now, but they stop in occasionally."

"Do you think that they might be stopping in on Thursday?"

"I'll ask. That's all that I can promise."

"What are their names?"

"James A. Rokor, George M. Rokor, and Stephen J. Rigney.

"Thank you, Mr. Grunen. I'll see you in two days."

"Goodbye, Miss Drake."

Nancy called to tell me that John and Mr. O'Connell would be up in about ten minutes. They needed to clean up first. I told her to ring me and then send them in when they arrived. I also asked her to ask Bob Warren to stop in after they left. Ten minutes later the phone rang twice and stopped. When I heard a knock at the door, I said, "Come in."

John walked in with Mike O'Connell right behind him. Mr. O'Connell looked very nervous.

"Good afternoon, Gentlemen. Would you care for some coffee?"

"I'll get it," John said.

"Won't you have a seat, Mr. O'Connell? I'm Miss Drake."

"Yes ma'am. I know who you are. I mean everybody knows who you are."

I smiled in an attempt to put him more at ease, and took a seat in the chair that I had been using. He sat in one of the two chairs across from me. John came over and put the two cups of coffee on the table then sat down.

"Mr. O'Connell, everything that you hear here today is strictly confidential. John made a suggestion yesterday that I have been giving a great deal of thought to. He suggested that Oak Mill Paper might be available. He mentioned that you were formerly employed there so I wanted to hear your thoughts about the company."

Mr. O'Connell looked totally lost. I guess that he wasn't expecting to be called before the company president to give his opinions about anything.

"It's okay, Mike," John said. "Just tell DD about the things that you told me."

"Uhhh…  Ummm… Well, it's a lot like Piermont, except it's going under. And they also have a box manufacturing line."

"That we know, Mike. Tell us about the equipment, the buildings, road access, warehouse space, loading docks, water access, utilities, that sort of thing."

"Uh, okay."

For the next half-hour Mr. O'Connell told us about Oak Mill Paper. We learned all about the equipment and facilities. We also learned about the decline since the new owners had taken over, and the apparent lack of employee morale. It sounded much the same as what I had found at Piermont originally. Most people were just hanging on until the end came.

"Mr. O'Connell. I've had a couple of people put together a financial picture of Oak Mill. It's pretty dismal. They won't last the year, and may not even make it to the summer. John has told me that your brother and sister-in-law still work for the company."

Mr. O'Connell nodded.

"If we can reach an agreement with the owners, then we will continue to operate the plant, with the intention of opening up the paper production operation again. I would like you to ask your sister for as accurate a figure as possible that shows the accounts receivables and the accounts payables. That information would have to be disclosed anyway as part of the negotiations. I just want to verify that the owners are being honest while we're negotiating.

"Uh… I can ask her."

"Please call her tonight if you will. I have a meeting at Oak Mill Paper on Thursday."

"Uh… okay, ma'am."

John's jaw had dropped when I mentioned the meeting. "This Thursday?" he said.

"Yes, and I would like you to accompany me. Get together with Mr. O'Connell and find out where all of the problem areas are so that we can show the owners that they won't be able to pull the wool over our eyes. We'll make a big production out of finding anything that they don't point out or try to keep us from seeing."

"Okay, DD. What time Thursday?"

"If it's a two hour ride, we should leave here at ten. We'll stop for lunch once we reach Greenfield."

"Okay, I'll be ready."

"Good. Gentlemen, thank you for coming. I hope that you can get that information for me before we have to leave on Thursday, Mr. O'Connell."

"I'll do my best, ma'am."

After they left I worked at my desk organizing all of the facts that I had accumulated so far. I developed a plan for the inspection of the Oak Mill plant and for the negotiations afterward. A knock at the door drew my attention and Bob Warren came in when I responded.

"Hi, Bob. Sit down. I have some news."

"About Oak Mill Paper?"

"Yes. Has the news leaked already?"

"I had lunch with Tom Harris. He mentioned that you might be considering legal action against them for their delinquency."

"It's more than that. I'm looking at them as a possible acquisition target."

"Acquisition? But they're floundering and about to go under."

"So was Piermont before you stepped in and worked your magic. Think that you can do it again?"

Bob scrunched up his face. "I was just getting to like this town."

"It won't require you to move, but there will be quite a bit of travel initially if this goes through. And there's no guarantee that it will because this is all very preliminary. The owners may reject any proposal out of hand. If it does go through, the corporate offices will remain here. Office staff there will only consist of the personnel necessary to run a remote factory, just like all of the factories in the Lumber Division."

"Then you haven't even looked at Oak Mill yet?"

"Not yet. I'm going on Thursday. I'd like you to accompany me if you can get free."

"I'm available. I'll cancel whatever appointments I have."

"Fine. Now explain the conditions of the line of credit that we have with the bank for future expansions. You said that it was five million a few months ago. Can that be structured as long term debt?"

"Yes. It specifically applies to equipment purchases and expansion, but I believe that it will apply to acquisitions as well. I'll verify that this afternoon."

"Good. We want to be protected if we have to move quickly to make a deal."

"Might I suggest that we bring Bill Marshall with us? If you're really thinking of doing this, it would be good to let him have a look at the books before signing anything."

I picked up the phone and called Bill. "Hi Bill. Are you free for a few minutes? Good, can you come up to my office please? Good, just tell Nancy that I told you to come right in."

Looking back at Bill I said, "I already invited John Fahey, just before you came in."

"It pays to have as many experts as we can since you like to move so quickly. Mrs. Moore always spent months negotiating her deals. It gave us a lot of time to find the mines before crossing the mine field."

A knock at the door preceded Bill Marshall joining us.

"Have a seat, Bill. We were just talking about Oak Mill. I'd like you to accompany us on an inspection on Thursday."

"An inspection?"

"Yes, I may make an offer to buy the company. I would like you to be there to take a look at the books if they consider my offer."

"Of course. What time?"

"We'll leave here at ten. I've been told that the trip takes between an hour and a half to two hours."

"Okay, DD. I'll clear my calendar for Thursday. Anything else?"

"No, that's all."

"Then if you don't need me, I have to get back. I was going over some procedures with Ron."

"Of course. Just keep this under your hat."

"Sure thing."

After he left I said to myself, 'Okay, that makes four for the trip. I think that that should impress them enough.'

Bob and I spent about another hour talking about Oak Mill Paper. I explained all of the steps that I had taken so far, and we planned our strategy for meeting with the principals, if they showed up. If they weren't there then there wouldn't be much to do except enjoy the tour.

Before he left I said, "Bob, if we do this then we're going to need the full attention of our management to get things going again. What's going on with Tom Harris and Ben Phillips? I expected them to return to their previous jobs before now."

Bob smiled. "They're delaying the return with excuses that their replacements aren't experienced enough yet to take over. I think that both of them would like to stay here on a permanent basis. I haven't pressured them. We reimburse the other divisions for their services, and I guess that the only other ties to their old jobs are in their minds. Both are renting houses here and moved their families here months ago. If they ask I would recommend making the reassignment permanent."

"Okay, Bob. If they want to stay, I'll endorse their transfer. Thanks."

On my way out later I stopped into Peter's office and picked up a book put out by the manufacturer of the equipment that Mike O'Connell had said was installed at Oak Mill Paper. I spent the evening reading about the equipment so that I could, at least, appear knowledgeable if the need arose when we went to Greenfield.

  

On Wednesday I spent part of my time studying the manual, and part working on the data that I had collected on Oak Mill as I tried to develop a complete picture of the company in my mind. Both Tom and Bill had come up with more information for me.

 

On Thursday morning, I awoke early, bathed, and dressed in my most conservative suit. The report from the investigator was waiting in a sealed envelope when I arrived at work, along with Letters of Intent prepared by Jeff Goldblum. I read the report over as I enjoyed a cup of tea, and I found the information enlightening.

At ten o'clock Bob, Bill, and John were waiting in the executive suite lobby. We rode the elevator down and walked out to the warmed up and waiting limo. As we rode we discussed the potential purchase and I showed everyone the report that I had received from the investigator.

Arriving in Greenfield a little before noon we stopped at an appealing looking restaurant for lunch. The food was pretty good even though the service was a little slow. Still, we made it to Oak Mill Paper in plenty of time for our 1 p.m. appointment. We easily found the large plant that sat on a large piece of property next to the Connecticut River.

Mr. Grunen was waiting in the lobby for us when we walked in. He was dressed in an older style, but good looking dark blue suit and walked straight to me and pumped my hand. "This is a real pleasure, DD. I almost feel like I know you because of all that I've read about you."

"Thank you, Mr. Grunen. It's a pleasure to meet you also. I'd like to introduce you to Mr. Warren, Executive V.P. of Piermont, Mr. Marshall, Director of Accounting, and Mr. Fahey, Chief Engineer."

"It is my pleasure to meet all of you. Please call me Eric."

Just then the outside door opened and two young men, who appeared to be in their early thirties, entered. They were dressed in faded jeans and ski parkas covering sweatshirts.

Mr. Grunen said, "Ah, here's Mr. James Rokor, and Mr. George Rokor. They are part owners of the company.

We had just finished the new introductions all around when the door opened again and a middle-aged man dressed in a very loud sport coat came in.

"And this," Mr. Grunen said, "is Mr. Stephen Rigney, the third owner of the plant."

We ran through the introductions again.

George Rokor spoke up and said to Bob, "So you're interested in buying this very valuable property?"

Mr. Grunen, "Excuse me, Mr. Rokor. Miss Drake is the one that you should be talking to."

"But she's just a kid."

"She's the boss."

He grimaced and turned to me, "You interested in buying this little goldmine?"

"Possibly. We'd like a tour and a look at your books before we talk price."

"Okay, let's take the tour."

"To save time, Mr. Marshall should begin looking at your books while we're looking at the plant."

"Whatever. Eddie, err…what's your name… Eric, show this fella to the accounting department and let him look at the books."

"Yes, sir, Mr. Rokor. Follow me Mr. Marshall."

After they left, the one named George said, "Okay, folks, follow me and I'll show you around."

He led the way to the plant with his brother and Mr. Rigney following along.

"Here's the box making operation. The company has been making boxes here since the thirties. All of the equipment is in top condition and we have a large customer base."

About half of the equipment was idle. He wanted to move on but John detached himself from the group and walked over to one of the idle machines and said, "If it's all in top condition, why is half of it not being used?"

"We have a bunch of people out sick."

John turned around and pulled on a cover of the idle machine. The cover came free and a tangle of wires fell out. "This machine wouldn't work no matter how healthy the operator was."

"Oh… well… they're probably working on that one. It must be down for maintenance."

John walked over to another and lifted a cover. "There's no motor in this one for driving the conveyor." Walking to a third idle machine he hit the start button and nothing happened. "Guess this one is down for maintenance also."

George licked his lips nervously. "Guess that I was wrong. They must be working on all three."

John said, "Oh, okay. Let me just check the other idle machines."

George said angrily, "Don't bother. All of the idle machines are broken, okay? But they can be fixed. We just don't have an engineer right now, okay?"

"I see," John said. "Who's maintaining those machines?"

"Well, we have one guy, but he's out with the flu."

"Oh? I was told that your last man is now servicing diesel truck engines down the road."

I figured that George had suffered enough after being caught in a series of lies, so I suggested that we move on.

As we reached the next area of the plant, where the paper production equipment was located, Mr. Rigney spoke up. "This is our paper production equipment. I know it better than George so I'll answer any questions. The equipment was operational until about two years ago when we phased out that part of the business."

"So you say that this equipment is ready to run as is?" John said.

"Absolutely, but it can't be turned on to test it."

John began removing covers and peering into the recesses of the equipment. We followed along as he went through the plant checking various pieces of equipment. Mr. Grunen caught up with us as we walked.

When we reached the end of the line he said, "There's no way that this equipment is ready to be operated."

Mr. Rigney said, "We've had several interested parties look at it recently. We've been thinking of selling it since we don't need it."

"How many offers have you received?" I said.

"We're expecting one shortly."

"It will take at least 150,000 dollars just to get these lines operating," John said, "and 250,000 to get everything back to 'good' condition. I wouldn't hold my breath until you hear from those 'buyers.'"

"Why don't we move on," I said. "Why don't you show us the warehouse?"

We followed George who led the way to the warehouse. It was a large cavern of a place, totally empty of inventory, and freezing cold. We took a brisk walk around the area and then hurried back to the office area to warm up. We got a quick tour of the office area and finished up in a conference room since Mr. Grunen's office couldn't accommodate all eight of us. Bill Marshall had finished with the accountant and followed us into the conference room.

After we had taken off our coats and sat down, I said, "Can you tell us how much you have in outstanding debt, including accounts payable."

"About 780,000 dollars," George said.

"That's it? Everything?"

"You'll have to ask your own man for an exact figure, sweet cheeks."

I ignored the remark and looked at Bill.

"According to the books, the figure is 786,841 dollars," Bill said.

That number agreed with what Mike O'Connell's sister-in-law had reported. I looked at George. "What about long term debt, property liens, anything like that?"

"We got clear title when the old fart kicked the bucket. The property was free and clear."

"So the total amount that you owe is $786,841."

"That's it. Your own man gave you the numbers, didn't he?"

"He gave me some of the numbers."

George looked at me suspiciously. "What's that mean?"

"Just that the numbers on your books are only part of the story. Another of my people has performed a search through the county records and found out that you owe $641,497 in back taxes. On March 12^th the county will be taking over this property and selling it at public auction to recover the taxes. Is there uh— anything else that you forgot to mention?"

He knew that I knew so he said, "Yes… I took out a $25,000 loan against the box making equipment."

Mr. Rigney jumped up from his chair. "You did what?"

"There's a lien filed against the box making equipment in the amount of 28,500 dollars," I said.

"You can't do that, George. It wasn't legal. You can go to jail for that."

"Gentlemen," I said, "let's stay calm and maybe we can work this out. Allow me to summarize your position. You have a plant building worth between one to two million dollars, and equipment worth maybe one million, considering that it's very run-down condition. The business has been run into the ground and you are only running one shift, making boxes, using half the equipment because the other half is broken. Against the 3 million in assets you have debts of almost one and a half million. In two months you will lose everything unless you come up with 640,000 dollars for the back taxes. That is highly unlikely given your situation. Because of your bad credit, the bank won't be coming to your aid. So in two months you lose it all."

This was news to Eric and he was watching me attentively, but the three owners were staring at the table.

I continued. "Now, we could just wait for the property to come up at public auction in March, and possibly pick it up cheap. But, by then the boxing equipment will have been taken by the lien holder, what's left of the customer base will be gone, and you might have sold the paper equipment for scrap just to grab a couple of  dollars. So what I'm proposing is this, I will pay $750,000 for all rights, titles, and interest in the company and its assets. That's $250,000 for each of you now, or, you can have zero in two months."

The owners were now looking at me again. George said, "What about the company's debts?"

"We assume those also, at least the ones that we are aware of today. You'll be out free and clear with a quarter of a million dollars each."

Mr. Rigney said, "Make it a half million each and you've got a deal"

"You remind me of the drowning man who threw a rope back to the rowboat owner because he was waiting to be saved by a yacht," I said. "But there aren't any yachts on this duck pond."

John stifled a snicker and a laugh by putting his hand over his face.

We sat there for sixty seconds according to the clock on the wall. When none of the owners spoke I stood up. "Very well, gentlemen. I wish you good luck and a good day."

John, Bob, and Bill stood up as I started to put on my coat. I had almost gotten it on when the silent owner, James Rokor, spoke up.

"Wait. I'll sell you my interest for a quarter of a million."

I stopped putting on my coat and said, "It doesn't work like that. It's all or nothing. One third interest doesn't do me any good."

George said, "Let us think about it. Maybe we can decide by next week."

"Sorry. I'm heading back to Texas where it's a lot warmer. This was your only chance to make a big score and fatten your bank accounts before you lose the company at a tax sale."

Suddenly Mr. Rigney said, "I'll sell my interest also. A quarter of a million will last me for the rest of my days if I'm real careful."

"That's fine for you old man, but what about me?" George said. "We've each been taking more than $250,000 a year since the old man died. I can't even live for a year on $250,000. What am I supposed to do?"

"The gravy train has skidded to a halt, cousin. You'd better learn to live with it. Like she said, in two months we lose everything. How long can you live on nothing, Mr. Big Spender."

"Me? Big Spender? I didn't charter a plane and take twenty of my friends to Las Vegas. And then throw $100,000 down the roulette toilet."

"No, you chartered a tour boat to take you and your friends out beyond the 12 mile limit for three days of drugs and sex. That set you back $50,000 plus."

James Rokor spoke again. "Look, George, take the deal or so help me, brother or not, I'll swear out an arrest warrant for you myself. You didn't have the authority to take out a personal loan on the company's equipment."

George looked around then said sullenly, "Okay, let's do it."

I took my coat off again and sat down. Taking the forms that had been prepared in advance, I filled in the information about the amounts and then passed them to the owners to sign. After they had signed, I had Mr. Grunen and John sign as witnesses. Then I signed and gave the copies to Bill Marshall to notarize. When he was done I passed copies back to James, George and Stephen.

I stood up and said, "Thank you, gentlemen. It's been a pleasure doing business with you." I didn't really mean it but it was the proper thing to say.

"Where's our money?" George asked.

"This is just the first step, Mr. Rokor. More formal documents will have to be prepared by the lawyers and certified checks will have to be cut. That will happen next week. I couldn't really know what checks to bring today."

"Then we still own the plant until then?"

I knew what he was thinking. "Yes and No. That document you just signed is a contract and states your promise to sell your interest for the amount specified. It also abolishes your authority to remove anything from the premises, or to create any further debts for the company. Technically you can't even come in and take a cup of coffee. You can't hire or fire, and you can't even give orders to the staff. You're an owner in name only until the final paperwork is signed and you receive your payment. Do you have any personal property here?"

All three shook their heads.

"Then there isn't any reason for you to be here after today. I suggest that you turn in any keys that you have. If you are found on the premises after hours we would have to assume that your motives are ulterior."

George said, "I don't think that that was called for."

"I'm sorry if you're offended, but you repeatedly lied about the condition of the box making equipment, you lied about the condition of paper manufacturing equipment, and you tried to conceal the fact that there was almost three quarters of a million dollars in back taxes and a private loan. That doesn't exactly make you trustworthy in my book."

George stood up. "Well I'm not going to sit here and be insulted by any pint-sized little bitch. We'll expect to see our money next week. Or else." He stomped out.

James and Stephen both stood up and followed him out without saying a word.

 

(continued in part 23)

Author's note : I want to express my grateful appreciation to Debbie Cybill and Lynn Jennings for their proofreading help and story suggestions.

 

 

 

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