Texas Gal

by C. Sprite

   

Chapter Thirty-Seven     Always Ask For Mo' Paper!

On New Year's Eve we celebrated the arrival of the New Year with a glass of champagne each as we watched the ball drop in New York City's Times Square. The fact that New York is in another time-zone from the ranch was largely ignored. Since Christmas we'd had our noses buried in books, and this was our chance to let our hair down and hoot and holler like the revelers in NYC for several minutes. We threw those little rolls of colored paper that become streamers if you manage to hold onto one end, and blew cardboard horns with paper bellows that rolled out.

Before we knew it we were back at school cramming again for final exams. We had all finished reading our textbooks long ago, and even skimmed through them a couple of times while paying particular attention to the highlighted passages, but that didn't stop us from renewing our efforts to commit every single fact to memory, at least every fact that we thought might possibly be included on our final exams.

By the time we had each taken our last exam, we were ready to collapse. As much as we liked to keep busy, we needed a break, desperately. Unfortunately for me, I had scheduled the corporate jet to pick me up at the ranch on Monday morning. With only four days at the ranch since our arrival home I was flying away again.

The jet whisked me off to Venango Regional Airport in Franklin on schedule. We touched down around two p.m. local time, and I got my first taste of really cold weather in almost a year. As I stepped down from the plane, the wind whipped up under my skirt and froze my thighs. Luckily Peter Emos drove up just then and I was able to jump into a warm car.

"Welcome to Franklin, DD," Peter said as we pulled away from the ice-slicked ramp area where the jet had parked. It would be fueled and pre-flighted while I was gone. The plant was only a few miles from the airport.

"Thank you, Peter. How's everything going? I understand you've found a home to purchase?"

"Yes, I have. It's a nice little four-bedroom house. My wife fell in love with it as soon as she saw it."

"Wonderful. How are the kids taking the news?"

"About as I expected. My son is looking forward to the move, but it's the end of life for my daughter."

"I'm sure your daughter will make lots of new friends when she comes."

"I know," Peter said, smiling. "It's simply of matter of getting past the teenage theatrics. We've been in the same home since the kids were born, so this will be quite a change for them."

"Did you have a nice Christmas?"

"Wonderful. Thank you for the great bonus, by the way. It gives me the down payment for the new house. I never received anywhere near that much from my previous employers."

"I like to reward hard work and loyalty. I'm very glad that you're part of the team, Peter."

"Thanks, DD."

"So how are things going at the plant?"

"Wonderful. Most of the box making equipment has been reconditioned and we're running it to capacity for one shift each day. We're also training new operators with an eye to starting a limited second shift."

"How many machines are still down?"

"Only three. They're the oldest machines and John's having trouble finding parts."

"Perhaps we should get rid of them and replace them with new equipment."

"We've been tossing around the idea of bringing some of the single-color machines down from Greenfield. They'd then be replaced with four-color machines up there."

"That sounds reasonable."

"The only problem is that we'll have to have the second shift going here before we do that because of the downtime of the Greenfield equipment during the transition."

"I see. Well, it sounds like you're preparing for that possibly with your training schedule."

"We want to be ready if you approve it."

"I'll talk with Bob about it. How are we progressing on getting the paper manufacturing equipment ready to roll?"

"Excellent. We hope to have one machine ready by February."

"Wonderful. That's well ahead of schedule, isn't it?"

"Yes. John decided to have everyone work on the machine that was in the best condition. Once that's in operation, they'll work on the other two, while continuing normal maintenance on the first as needed."

"What about operators?"

"We've made arrangements for a full crew. Some will come from Brandon, and some from Greenfield. They'll train replacements from the local labor pool and then return home when I feel that the new operators can handle things."

Peter had pulled into the plant's driveway and slowed at the guard booth. The guard pressed the button to raise the gate and saluted as we passed.

"Is he from Brandon? I didn't recognize him."

"No, he's local, but he was trained by the senior security man from Brandon."

"Does he always salute you?"

"He wasn't saluting me. He was saluting you. He just waves to me when I'm alone."

"Oh."

"The new security procedures manual for all plants, requires that all guards salute the company president whenever she enters the grounds."

"Really. Who wrote that?"

"I think it was Josh."

"The senior security man at Brandon?"

"Uh, yeah."

"The buildings look excellent," I said as they came into view. "The last time I saw them the windows were all shot out and the lawn looked like a jungle. With the snow covering the ground, everything looks so pristine and wonderful."

"It'll look just as good when spring gets here and the snow has melted. The fellows from Brandon and Greenfield, together with a crew of local temp laborers, really whipped the grounds into shape before the first snow fell. Come April, we'll get a little landscaping work done and this plant will appear like a showplace."

The parking lot in front of the building where the boxing operation was located was about half filled with cars. Peter continued over to the two story office building and parked near the main door in a spot marked, 'Plant Manager.' We hurried from the car to the entrance door as a cold breeze pelted us with snowy ice crystals collected from the surface of the fields around the plant and hurled with abandon. As the door into the large vestibule closed heavily behind us, I relaxed slightly with the sheer delight of being out of the brutal wind. Peter grabbed the large brass handle of a second door and pulled it open, allowing me to precede him into the reception area. The office area was warm, clean, and inviting. An attractive young woman typing at the receptionist's desk near the front entrance looked up briefly and smiled before returning to her work. A recollection of this large area, with rodent and bird droppings everywhere, was still somewhat fresh in my mind. I could happily now replace that image with this new one.

"What a difference," I said to Peter.

"That's for sure," he said. "Once the windows were all replaced, the exterminators moved in. The rodents had gained a tremendous foothold in the place, nesting in the walls, and eating anything they could sink their needle-sharp little teeth into. We practically had to gut this building to clear them out. Once they were gone, the plumbers moved in and thoroughly checked all the pipes. Then it was the electricians' turn. All rodent damaged wiring and fixtures were replaced, and in many cases upgraded. We rely a lot more on electrical devices in the office than they did just fifteen years ago. Assuming that trend to continue somewhat, we tripled the number of outlets in every work area. Then the sheetrock we had ripped out was replaced and it took on the appearance of an office area again.

"Of course we won't need nearly the office space that the former operations did, since so much of the accounting and sales work will be done at Brandon, so about half of the first floor was left as one large, empty area, suitable for storage of whatever else we need. The second floor was impractical for storage or manufacturing operations, so we left it as office space. Shall we go upstairs for a hot beverage before we start the tour?"

"That would be lovely," I said. "I could use a cup of tea right now."

Peter led the way to the elevator, and we rose to the second, and top, floor. He led the way down a wide corridor, and through a set of swinging, glass doors marked 'Executive Suite.' Another young woman was on the phone when we entered the reception area.

"Here he is now, Mr. Burke. Mr. Emos, Mr. Burke would like to speak with you."

"Excuse me for just a second, DD," Peter said. Taking the phone from the young woman, who was holding out the receiver, Peter asked, "What is it, Lenny? I'm a little busy right now."

After a few seconds, Peter said, "Fine. You're the chief engineer. Use your best judgment." Then he hung up the phone. "I'm sorry, DD."

"There's nothing to be sorry for, Peter. This is your workday and I'm imposing on your time."

"It's never an imposition. I enjoy your company, and besides— you're the boss."

I smiled. "I believe you mentioned something about tea?"

"Of course, follow me. Katie, would you bring a carafe of tea to my office?"

"Certainly, Mr. Emos. What would you like, Miss Drake, Black, or Herbal?"

"Black is fine," I said. "With a little honey and cream."

"Right away, Miss Drake," she said, professionally.

Peter led the way down the hall to a door marked 'President' and opened it, then stepped aside. I entered and found myself in a reception area with a secretarial desk and a dozen comfortable chairs. Peter continued on and opened another door, this one leading into an enormous office even larger than the one I have in Brandon. I remembered it from my first trip to visit the plant but it had been empty at that time. There was a large conference table, an enormous executive desk, credenza, and an informal area with a couch, two chairs, and a coffee table. As we had taken over our various companies and consolidated office functions, we'd wound up with a lot of excess office furniture. The furniture here was in excellent condition, but didn't appear new, so I supposed that it had been shipped in from one of our regional storage locations. A large picture window looked out at a snowy spectacle and I could see the nearby river. I was surprised to see the room so sterile. Aside from the office furniture, all clean and polished, there was no evidence of any paperwork or personal effects.

"You keep a tidy office, Peter," I said.

"Oh, this isn't mine, DD. This is your office."

"Mine?"

"Well, we have so much unused office space, I decided to set aside this area for your use when you're here, as is the case in Owosso and Asheville. Normally, this space is only heated to 55 degrees, but I raised the thermostat this morning so that it would be comfortable when you arrived. My office is over here."

Peter led the way back into the corridor, to another suite. Again, there was no one at the secretarial desk in the outer area, but the office beyond was very much different than the one reserved for my use. A conference table was covered with blueprints and building plans and there was a stack of papers in the IN basket on the desk, and two large stacks on the credenza behind the desk. It was obviously the desk of a working man.

"Excuse the mess," he said.

"What mess?" I said lightly. "All I see is that the occupant of this office works for a living."

A knock at the door preceded its being opened by Katie, the executive suite receptionist. She placed a small carafe on Peter's desk, along with a cup, a jar of honey, a spoon, and a couple of napkins. Then she smiled and turned, disappearing through the door without as much as a word.

"Aren't you having anything?" I asked Peter.

"I always have a pot of coffee going in my office," he said, pointing to a coffee maker on a side table against the wall. Walking to it, he poured a cup and returned with a small creamer container.

After removing my coat, I prepared my tea, then walked to Peter's informal area and sat in one of the two chairs. He prepared his coffee and came over to sit in the other chair. Over the next hour we discussed the Franklin operation in depth, then left for a tour of the plant.

The box making operation was, by necessity, as noisy as the operation in Greenfield. Conversation was impossible, so I took the earplugs I always carry when touring the plants and inserted them into my ears. When we passed through a fireproof door two forklifts wide, into the section where the paper producing equipment was located, I removed them. It seemed almost as quiet as a tomb in here. The floors had all been swept of debris, and the machinery had been washed down to remove the dust, dirt, and droppings, but you could tell that no machine maintenance had been started.

Peter led the way through the plant and through another fireproof door. In here I could hear the sounds of people talking and occasional mechanical noises such as those generated when tools strike metal. Like the previous plant, the enormous area was well lit, mostly by large widows and skylights, but also by overhead lighting. Workmen were climbing all over the three story high paper forming machine.

"This is Machine #2," Peter said. "We decided that it was in the best condition, and gave us the best opportunity to get the plant online quickly. Machine #3 had almost never been used, but it sat dormant for so long without maintenance, that a lot of parts are seized up with rust. Every seized component will have to be disassembled, sanded or replaced, and reassembled."

I nodded and continuing walking along. A man on a walkway atop the machine, perhaps twenty feet up, spotted us approaching and hurried down a nearby metal stairway.

"Welcome to Franklin, DD," he said, while he was still climbing down.

As he neared us, Peter said, "This is Lenny Burke, my chief engineer. I convinced him to move down here and take responsibility for maintenance in this plant."

I smiled and said, "Yes, I remember Lenny. He helped us evaluate the plants in the Southeast Region when we were considering a buyout of Appalachian Paper. How are you, Lenny?"

"Fine, DD."

"I understand that you feel we can begin paper production operations in February?"

"Well, mid-February, anyway. We're still up to our elbows in work with this baby, but we've made a lot of progress so far. We want to make sure that we've done the job right so that once it starts operating, it'll stay operating."

"That's wonderful. Once we get one machine rolling, there'll be a lot less pressure to bring the other machines online quickly. Are you settled in the area?"

"No, so far I'm sleeping in the dorm with the other guys."

"Dorm?"

"I rented a couple of dozen beds," Peter said, "and we set them up in the area on the first floor that used to be office space. The carpenters built some simple partitions to give a semblance of privacy. The engineers pretty much all stay there."

"It's great," Lenny said. "We hardly ever have to go outside in the cold at all. We set up a small kitchen, and make communal meals like they do in a firehouse."

"What about your families?"

"Some of the guys drive home on weekends. A couple, like myself, are looking at houses here because they plan to transfer permanently."

I nodded. "Wonderful. Well, I won't keep you from your work any longer. It's been nice seeing you again, Lenny."

"You too, DD. Have a safe flight home."

"Thank you," I said to his back as he hurried to the stairs and began the climb back up the enormous machine.

"He's one of the best engineers I've ever known," Peter said. "He's smart, loyal, and hardworking."

"We inherited a lot of incredible people with the Owosso deal," I said.

Over the next hour we toured the rest of the facility. The people working there had done a wonderful job of cleaning up and preparing the plant for operation. Only a small part of the enormous warehouse contained paper, and then it was paper produced at one of our other plants for the Franklin boxing operation, but the entire warehouse had been broomed clean and was ready to receive product manufactured in-house.

I phoned the airport after completing my tour to notify Captain O'Toole that I was returning momentarily so they would be able to complete their pre-flight. Then it was time to bundle up and walk to the car with Peter. We were at the airport in minutes, and I thanked Peter for transporting me and taking time to tour the plant with me, before saying goodbye and boarding the plane.

Less than an hour later we were on the ground in Vermont. Earl was waiting with the limo and I hurried to get inside while he and the co-pilot wrestled my luggage into the trunk. My usual suite at the Holiday Inn had been reserved, and after checking in I walked to the restaurant for dinner.

On Tuesday morning I arrived at the Brandon plant just before the first-shift people began to arrive. The uniformed guard at the gate snapped smartly to attention as the limo approached and then passed the booth without slowing. I doubt if the guard could see in through the tinted windows, but I knew that Earl always flashed the lights to notify them that I was in the vehicle.

Doris welcomed me back when I entered the building and Nancy did the same when I entered the executive suite. I smiled and returned their greetings, as well as those of the other half dozen people that I passed, but I didn't stop to talk to anyone today. As I entered my office, I saw several large stacks of folders on my desk. Well, it had been more than four months since I'd been here. Although magazines and important correspondence had been sent to me in Austin, up until Christmas, such things as new employee forms and business offers were not. I removed my coat, poured a cup of tea from the pot prepared by Nancy just prior to my arrival, and got down to work.

Most of the personnel forms were from the new Bloomington plant, although there were quite a few from Jamestown as well. The normal turnover at the other twenty-one locations provided a healthy stack of its own. It was almost ten o'clock when I finished examining them and turned to mail and magazines. On my instruction, Nancy had stopped sending mail to me prior to Christmas. I didn't want to think about the business during the holidays, and then I had to devote myself to preparing for my end-of-semester exams. If any mail looked important, or any critical matters had come up, Bob Warren would have called me.

I separated my mail as I looked through it. Some would be forwarded to Bob, some would be filed, and some went directly into the wastebasket. Within half an hour I had finished, so I took some time to file the personnel files. When I was done, my desk was clear except for a month's worth of trade magazines, and four months of offers from prospective business sellers. I decided to leave the trade publications for last and dived into the offers.

As always I separated the offers quickly. One pile was for 'Overseas,' one was for 'Too Small,' and the other was for 'Possibles.' The first two went immediately to Nancy for letters to the sender thanking them for considering us, but informing them that either we weren't yet international, or that they were too small an operation for us to consider. I spent the next hour carefully reading each offer and making two new piles: Possibles and No-interest. When I was done, I still had eight in the Possibles folder. I decided to take a break and read one of the magazines, so I prepared a fresh cup of tea and carried it, and the trade magazine, to my couch. I had no sooner sat down than the phone rang. Fortunately there was an extension phone on the coffee table.

"Yes, Nancy," I said into the receiver.

"Miss Drake, there's a Morris Wells asking to speak with you. He says that he knows you and won't state his business."

"Thank you, Nancy. Put Mr. Wells through."

A second later I heard the connection click. "Good morning, Mr. Wells. This is Miss Drake."

"Good morning, Miss Drake. It's a pleasure to speak with you again. I hope that you can spare me a few minutes?"

"Of course, Mr. Wells. Have you learned something of interest? Is South-Core plotting some new dastardly deed against us?"

"Against you, no. But they are plotting against someone else. I thought that you might be interested in hearing about it."

"I certainly would, Mr. Wells. Who is their victim this time?"

It's a company called Mo Paper. You might have heard of them. Their slogan is 'Always Ask For Mo Paper.' They're based in Missouri."

I knew the name immediately because they were the company rated at number twenty-one, just behind Piermont. "I've heard the name," I said, "but I don't know much about them. What is South-Core planning?"

"Mo Paper is seriously delinquent on loan payments for a new plant they built. South-Core has purchased the loan and stopped normal collection efforts. They want Mo Paper to believe that the finance company is giving them a 90 day grace period to get their finances in order, but I've learned that actually they're preparing to file the court paperwork to seize the plant. I understand that South-Core is also working with a couple of Mo's suppliers, and has arranged to give them enough credit for Mo to hang themselves good and proper. At the appropriate time all the creditors will demand immediate payment or commence court action to collect all outstanding money."

"But Mo Paper can simply file for Chapter 11 protection from its creditors."

"That will fit right into South-Core's plans. Once the company drops into Chapter 11, it will never reemerge. It won't be able to get supplies at a price that allows it to compete. Its plant assets have all been used as collateral for its loans, and its cash position is practically non-existent. It will only be a matter of time before South-Core picks up the entire company for a fraction of its value."

"And what's its value, Mr. Wells?"

"I understand that the current assets of the company are about $240 million, and the outstanding structured debt is about $70 million."

"$240 million in assets? That's well outside South-Core's usual operating range. Their own value is only about $200 million I believe."

"As I understand it, the goal is to surpass Piermont in one stroke. You're almost too large for them to take on now. They need this deal if they're ever going to have a chance of getting back at you. I've also heard that they have a spy inside your company. We haven't been able to find out who it is yet, but I'd be careful in whom I confided."

"I see. Thank you, Mr. Wells."

"We've been collecting our monthly fee for some time without providing any solid information to you. I hope this evens things up a bit?"

"It does indeed, Mr. Wells. Thank you for calling with this information. You'll continue to receive your monthly fee. Let me know if you learn the identity of our spy, or if any other nefarious deeds come to light."

"Of course, Miss Drake. Thank you."

"Thank you, Mr. Wells. Good day."

As I hung up the phone, I began to think about Mo Paper. They were about to get dropped on their head, but I didn't know if I should get involved. Piermont Paper, even when including the Franklin plant at its anticipated end of year value of twenty million, only had assets of $300 million. Taking over a $240 million company was almost out of our league at this point. Of course, it didn't hurt to look into it. I trusted my management team implicitly, but I didn't know all the secretaries and assistants in their departments. I hated to think that perhaps some long-time employee such as Nancy was our spy. I was wondering who I should trust with this news when Bob Warren called. He must have physic power because I had just been thinking of calling him.

"Hi boss," he said.

"Hi Bob. Did you have a nice holiday season?"

"Terrific. Yourself?"

"It was wonderful, but I began to feel a little guilty about neglecting the company."

"You shouldn't. We talk every week and you're here whenever you're not in school. Can I drop over?"

"I wish you would."

"Great. I'll be there in a mo'."

I started at his words. Perhaps he really was physic. I hadn't ever heard him use mo' before, although a lot of people shortened the word 'moment' that way in conversations. True to his word, he knocked at the door and then let himself in a moment later. As usual, he was carrying his coffee mug.

"I'm sorry I didn't drop by earlier," he said. "I've been tied up in meetings all morning."

"That's quite alright," I said. "I had a lot of paperwork to catch up on."

"Any likely looking offers?"

"The folder is on my desk," I said, pointing.

Retrieving the folder, he opened it and looked quickly at the letters. "There are a lot here. Are they all under consideration?"

"No, not really. I just had to take a break after I whittled the pile way down. There were a lot of letters this time because I hadn't gone through them in almost five months, and probably because of the press about our last three acquisitions."

"Would you like me to start investigating any of them?"

"No, not until I go through them one more time. Bob, have you ever hear of Mo Paper in Missouri?"

"Mo Paper? Sure. Always Ask For Mo Paper. They're rated just behind us in paper production capacity."

"What do you know of them?"

"Not too much, really. I see their name in the trade mags from time to time. I think that they have about twenty plants, mostly sheet and roll paper, but also formed paper products. They also have three sawmills and extensive forest holdings. They're kinda like us with their product mix, but not quite so diversified. Producing mostly bleached papers must severely restrict their product line. That's probably at the heart of whatever problems they're having. I didn't see an offer in here," he said, referring to the 'Possibles' folder. "Are they looking to sell some of their plants?"

"We haven't received a letter from them. I've been told that they're in trouble and the South-Core vultures are circling overhead."

"Really? They're quite a bit out of South-Core's league. They're bigger for one thing."

"The word is that South-Core figures to more than double their size overnight."

"Taking over Mo Paper would do that."

"Uh, how much do we have available in our $100 million line of credit?"

"About $31 million."

"That might not be enough."

"Are you considering going after Mo Paper yourself?"

"It may be beyond our means at this time, unless we could get our line raised."

"I could always ask."

"Why not? Call your contact at the bank and ask him to raise our line to $300 million."

"300?"

"Sure The worst they can do is say no, right? Mrs. Moore keeps telling me never to think small."

"And if they say no?"

"Tell them that we've always enjoyed doing business with them and that we hope they'll harbor no ill feelings when I contact the Hong Kong bank that's been chasing after our accounts for the past year."

"Hong Kong?"

I nodded. "Hong Kong."

"You've never mentioned them before," he said.

"I didn't need a fictitious financial card before."

"Fictitious?" he asked with a grin.

"Of course. It does sound plausible though, doesn't it?"

"You had me convinced for a minute."

"Good. Now go convince them."

"Should I start looking into Mo Paper while I'm waiting for the bank to respond?"

"You can, but only within the strictest of confidence. This is South-Core's big play, and they're going to be looking for any interest from us. Be careful whom you trust with this information. I've just learned that South-Core has a spy in our midst."

"A spy?"

I nodded.

"Where did you hear that?"

"It doesn't matter. But I can say that I heard it from a usually reliable source."

"You know someone who works in South-Core?"

I didn't want to lie to Bob, but I didn't want to tell him about the investigator. "I know someone who's close to someone who's close to their management team. I can't say anymore."

"And they've been giving you reliable information?"

"It's how I learned about South-Core's plan to takeover Gorham. Although Mr. Nedermyer had already contacted me directly, I hadn't responded positively because we weren't selling newsprint at the time."

"Ahh. Good enough. We'll be even more careful than usual."

After Bob left I looked though the 'Possibles' again, but I couldn't concentrate on them. I kept thinking about Mo Paper. I reached for the phone to call the local investigator that I used to search for outstanding taxes and liens against companies we were considering for purchase, but then I started to wonder if South-Core had learned of our association and was paying him to inform them every time I used his services. I shook my head violently. I had to be wary, but I couldn't mistrust everyone who worked for me. I picked up the phone and made the call. When I was done, I called the Ashville plant and asked for Ian Thorehill. After several minutes I heard his voice.

"DD, are you still there?"

"Hey Zit. How you?" I asked in my best hillbilly voice.

I heard him chuckle. "Great. Sorry I took so long to get to a phone, I was up on the walkway of #1, checking out a roller vibration reported by one our engineers."

"If I'd known I would have told them not to bother you and then called again later."

"No, I'm glad for the interruption. Are you coming to Ashville?"

"Not this trip. Maybe during Spring Break in about three months. Or definitely after the school term ends."

"I'll look forward to it."

"Me too. The reason for my call today is to ask you a question. This is important and you mustn't tell anyone I asked. Okay?"

"Of course."

"Good. Do you know anything about the Mo Paper company?"

"Sure. The owner's a good ole boy named Roy Blu. He inherited a single plant in 'bama from an uncle about fifteen years ago. Of course, back then it wasn't so much. He's a little like you, building up the company from practically nothing. He's not as smart though, and it's taken him a lot longer. I understand the company isn't as sound as Piermont."

"It's a lot worse than that, from what I've been told."

"Are they ripe for a takeover?"

"The vultures are circling."

"Really?"

"So I've been told. It's just a matter of months."

"Wow! I had no idea."

"Ian, I need to learn as much as possible about Mo Paper, as quickly as possible, but no one may know that I'm involved, or even interested."

"I understand, DD. I think I can help you. I have a cousin who works at the Mo Paper plant in Hendersonville, Tennessee. It's a little northeast of Nashville. He's not a Thorehill, but I trust him. He'll give me the inside dope and keep his mouth shut. I'll suggest that the family is looking to buy a small paper plant and start over. Mo Paper has a number of small operations valued in the 5 to $10 million range, mostly in Tennessee and Kentuck."

"Good, that's what I need, Ian."

"Where can I reach you?"

"I'll be in Brandon for the rest of the week."

"Only three more days?"

"If I'm going to do anything, I'll have to travel to Missouri for a face to face with ol' Blu next week. The new school term starts a week from next Monday. Time is short."

"Okay, DD. I'll get working on this right away."

"Great. Thanks. Remember, I'm not involved."

"I've got it, boss. I'll call you as soon as I learn anything."

"Bye, Zit," I giggled in my hillbilly voice.

Hanging up the phone ended my direct involvement for the immediate future. I didn't know who else would know anything about Mo Paper, and who could be trusted to keep my inquires private. I returned to the folder of Possibles.

"I've learned a little," Bob said when we met again after lunch. "It would be easier if I could ask openly, but I appreciate the need for complete secrecy with a South-Core spy in the building."

"What have you heard?"

Bob handed me several pages with basic corporate information from D&B. "Mo is having trouble getting supplies because they're thirty days delinquent with most of their payables. The companies that are still doing business with them are charging a premium price for the chemicals and other supplies because of the perceived risk of the debt becoming uncollectible."

"That's understandable. It also usually marks the beginning of the end."

"Yeah."

"Anything from our bank?"

"Not yet. I spoke to Bill Wentworth, the president, but he was hesitant to say anything that could be interpreted as positive. He has to run a loan request of this magnitude before the Board."

"Did you play the Hong Kong card?"

"Not yet. I'm keeping that one in the hole for now. I'll only play it if they turn us down. I don't want to alienate them for no reason with what might be perceived as a threat."

"Okay, Bob. It's your play for now. I'm confident that Mrs. Moore can get us the funding if the bank won't play along. She's encouraged me to go with my instincts."

"They've served us well in the past."

"I have to admit that this deal makes me a little nervous."

"Why so?"

"It's so big. We're talking about a $240 million deal. This could be my Waterloo."

"That could be good or bad," he said grinning, "depending on whether your name is Napoleon Bonaparte or Arthur Wellesley. Anyway, we'll know the situation while there's still time to back out. We don't need this deal, as you always say, so we can always walk away. There will be lots of others."

"That's essentially what Mrs. Moore said to me at Christmas time."

"She's one brilliant lady; like you."

"Thank you. I can't think of a finer complement than to be compared to her."

"If we get this deal, which region will it be in?"

"While Piermont is spread out all over the eastern half of the country, Mo Paper is very centrally located around the point where Missouri, Kentucky, and Tennessee all meet. Coincidentally, that's where our Midwest and Southeast regions meet. The company headquarters is located in Missouri, which in Gerard's region, and most of the plants are in the Midwest region."

"Then I guess Gerard should handle the integration to Piermont."

"No, I'd like you to handle the integration, although both Ron and Gerard should be involved up to their ears. It will be up to you to determine at what point you turn responsibility of the plants over to them."

Bob nodded. "Well, I have work to do if you don't need me anymore. I'll continue to seek whatever information is available on Mo Paper. Did you want me to look into any other companies in case things don't work out with Mo."

"Sure," I said, pointing to the coffee table. "Take the folder. I've narrowed the Possibles down to three."

"Okay, boss."

After Bob left I picked up a trade magazine and started reading, but I found that I had to read everything two or three times because I kept losing my train of thought. After I purchased the two plants in Maine, Susan had said that I was playing at life like it was just a game of Monopoly. I wondered at what point the game ended and real life began.

I waited anxiously all day Wednesday, but there was no news from either the bank, my investigator, or from Ian. Bob heard a little more about Mo's delinquent payments to creditors, but it only reinforced what we already knew. Mo was paying its bills late, and the suppliers were growing antsy.

I was preparing a cup of tea on Thursday morning when Ian called. He had driven to his cousin's home in Tennessee on Wednesday evening so that he could have a face to face and be assured that they had complete privacy when they spoke. I grabbed a pencil and spent the next hour taking notes. Ian had indeed gotten the 'behind the scenes' story; at least that part of it that an assistant plant manager could know.

Later in the afternoon the investigator that I had hired dropped off his report. I had promised him double his usual rate and first class air travel to Missouri. He had dropped everything else to head there immediately.

With the two reports I was able to assemble a pretty complete picture of Mo Paper's situation. The information from Mr. Wells, and from Bob's sources, enabled me to further fill in most of the blanks, deducing information where I didn't have the exact facts. When I had completed the picture, I called Mo Paper and asked for Roy Blu. I didn't ask Nancy to place the call because I still wanted to keep the circle of knowledgeable insiders as small as possible.

"Miss Drake," I heard a female voice say, "please hold for Mr. Blu." A second later I heard a male voice come on the line.

"Miss Drake, this is Mr. Blu."

"Call me DD, please. Everyone does."

"Okay, DD. Call me Roy. Now, what can I do for you, Sugah?"

"I have some information I'd like to share with you, Roy."

"Okay, fire it at me."

"I can't tell you over the phone. Can we meet?"

"I suppose. Where are you?"

"I'm at my company headquarters in Vermont."

"Well, I can't get away until a week from Monday."

"That's no good. I have to return to college that day. How about if I fly down to meet you?"

"In that fantastic biz jet of yours?"

"Of course. It's only a couple of hours to Jefferson City."

"Okay. How's 11 a.m. Monday sound?"

"It sounds fine. I'll be there. I suggest you keep our appointment completely secret. When I tell you what I've learned, you'll understand why."

"Our financial situation isn't a secret, DD. We've been having a few bad months."

"What I have to tell you is not common information such as delinquent payments. I regret that I dare not say more right now. I'll see you, Monday."

"I look forward to it, darlin."

Now that I had an appointment set up, I notified the others that I wished to bring with me. Roy Blu was going to be surprised when six of us walked in on him.

The Gulfstream set down on the single runway at Jefferson City Memorial Airport just after 10:30. An arranged for limo was waiting and I climbed in quickly to get out of the frigid wind. Bob Warren— my Executive V.P., Bill Marshall— my V.P. of Finance, John Fahey— my Chief Engineer at Brandon, Gerard Deveraux— the V.P. of the Midwest region, and Ron Collins— the V.P of the Southeast Region climbed in behind me. Mo Paper's offices were only a fifteen minute ride from the airport.

The office building was impressive. Four stories of polished enamel panels and mirrored glass reflected the stormy winter sky as we entered the building. We were directed to an elevator, and a receptionist met us on the top floor. She led us to a large, empty conference room, took beverage orders, then left us alone. The girl, whose name I later learned was Bobbi Jo, returned with a tray of beverages after five minutes, then left us alone again. It was another ten minutes before Roy Blu came in. I wondered if he had been busy, or merely wanted me to wait as part of some head game.

"My, my," Blu said, smiling affably "With all these Yankees, it looks like Sherman's march to the sea. Or perhaps Drake's march to the Blu. How do ya'll do? I'm Roy Blu."

"Hello, Roy," I said. "I'm DD." I then introduced each of my executives.

"So, to what do I owe this visit by Piermont's impressive brain trust?" Roy asked as he took a seat.

"We've come to help you," I said.

"Oh, do tell? And do I need help?"

"Most definitely." I picked up a folder that I had taken from my briefcase while we waited, opened it, and began to paraphrase what I read in my notes. "Fifteen years ago you inherited Mo Paper, then known as Bama Blu from the estate of your uncle, Deke Blu, following his death from cancer."

"Well, hell. I already knew that, little lady," Blu said morosely.

"The business was modest at that time. You produced formed paper products for local businesses. Most of your output was paper egg cartons, and you also produced packing corners for local furniture manufacturers. The business offered a comfortable living, but you wanted more. Once you had paid off the debt on the plant and owned it free and clear, you used it as collateral to secure a loan for another plant, moving into stationary and notebook products. Over the past fifteen years, you've used each new purchase as collateral to secure a new loan for another plant. Although you were mainly interested in paper plants, you've also picked up several sawmills and 345,000 acres of forest land along the way."

"I knew that also."

"Four years ago you decided that you were weary of only buying older plants, with tired equipment, and decided to build a brand new plant with state-of-the-art equipment. The output from the one plant would be a third again that of the other eighteen plants combined. The estimated cost was twenty-five million, but the final cost was thirty-two million, owing mainly to unexpected soil and foundation problems with the selected location, rising steel prices, and a prolonged union strike."

"Damn unions."

"When you were actually ready to build your dream plant, your bank refused the loan, as did every bank in the state."

"Damn banks."

"So you turned to private financial companies and finally found one that would lend you the money. But because of the size of the loan, they required not only your most recent purchase in Evansville for collateral, but also the new plant with all installed equipment, and this office building. That effectively wiped out your ability to raise money by arranging a loan on the new plant."

"Damn finance company."

"You got the twenty-five million you needed, but when the costs started to escalate, the finance company refused to extend more money. You wiped out your reserves getting the plant completed."

"Damn finance company."

"Although your sales had been climbing steadily for years, they suddenly began to fall off a year ago. By the time your new plant was finished, you didn't need the capacity, and so never staffed the new facility. But you still had to make the monthly payments on the twenty-five million. And you can't sell the plant until the loan is satisfied."

"Damn finance company. Oh, I already said that one twice, didn't I? Doesn't matter. I can't say it enough."

"Where you were once hungry for more paper producing capability, you found that didn't have enough work for one full shift at all of your producing plants. You've been keeping them all operating, just for appearances sake, while you try to resolve your problems, but you're in that fast spiral downward that occurs just before the end. Your suppliers, leery of your financial stability, are charging a premium on everything you purchase."

"Damn suppliers."

"Your fixed assets are valued at roughly $240 million, while your debt is approximately $70 million. Unfortunately, because of the way you've structured your debt, you can't sell anything to raise capital. You're being slowly squeezed out of business. You could seek shelter under the Chapter Eleven laws, but you'd have to present a plan for reorganization to the court, and show how you intend to clear your debt. With no cash reserves, and dedicating every penny that you do collect to payroll and your suppliers to keep the plants operating, that might be an impossible sell. Because of your higher expenses, and our highly competitive business, you can't make enough money on the paper that you do ship to make any progress on retiring your debts."

"Damn— suppliers."

"I know that I haven't told you anything new yet, but I wanted to show you that we are well aware of your situation. Now, the things that you don't know…"

I paused to make sure I had his complete attention. He had been staring down at the table as I talked. Now he looked up at my face.

"Your twenty-five million dollar note with the private finance company, at the absolutely unheard of interest rate of six percent over prime, has been purchased by South-Core Paper."

Roy Blu jumped up from his seat. "The hell you say!"

I didn't respond. I just looked up at his face.

"I just spoke to the finance company this morning," he said. "They promised me an extension period to make my next payment."

"Did you get it in writing?"

"Uh— no."

Opening my briefcase, I took out a photocopy that the investigator had given me and handed it to Roy Blu. "I'm sure that if you recall the conversation exactly, they never actually promised you an extension on the note. They probably promised you that they wouldn't pursue any legal remedies against you for another 90 days, or some such other nebulous promise which has no possible bearing on your situation. They can't legally promise you anything about the note because it's not their note anymore. You can run down to the courthouse and see the original of this when you have the time. That's where we got our copy."

"Damn finance company!" Roy practically spit out as he looked at the document. "What did they hope to prove with this maneuver?"

"South-Core wants your company, Roy; all of it. Put simply, their plan has been to let the debts continue to mount, while your sales continue to fall. Once you're a solid ninety days in arrears across the board, and have no hope to recover, they'll petition the court to turn over the two plants to them, the new one and the one you used as collateral for the initial loan to buy the land, as stipulated in your finance contract."

I handed him a sheaf of photocopies and said, "They've also purchased all the notes on the other plants from your bank. The bank was probably tired of your delinquent payments and relieved to get out with all its money."

"Damn bankers," he said as he looked through the documents. He reached for the phone on the conference room table and furiously dialed a number. After a couple of seconds he said loudly, "Let me speak to Ernest. This is Roy Blu." After a few more seconds, he said, "Can it, Ernie. Just tell me one thing. Did you or did you not sell all my notes to South-Core Paper?" A couple of seconds passed while Roy nodded and scowled. Then he said, "I've been a loyal customer of your bank for more than a decade, and you do this to me now?" Another pause. "Yeah, I know you warned me against the new plant. But you didn't even have the balls to tell me you were selling me out. I had to learn it from a competitor." He slammed down the phone. "Damn bankers!"

"That's what I came to tell you," I said. "Oh, there's one more thing. It's merely a side bit of information. South-Core hopes that by acquiring your company they'll be in a position to attack me at some point. Right now, we're too large, and too financially secure for them to do anything."

"They've been after you also, eh?"

"We've had a very long acquaintance. They've come off second best each time we've locked horns. But they're persistent, if nothing else."

"Well, I appreciate the information, but you didn't come all this way just to open my eyes."

I grinned. "No I didn't. I have a proposition for you."

"I figured as much. I've read about your raids on other companies."

"I don't raid companies, Roy. I step in when they're about to lose it all and offer alternative solutions. If I'm not welcome, I pack up my tent and go home."

"That's not the way it sounded with that company in Massachusetts."

"Greenfield was a bit unique. To funnel more cash into personal accounts used to fund extravagant and wasteful lifestyles, the owners stopped paying taxes on real estate the company owned. Then, because they weren't actually involved with the operation of the company they'd inherited, they forgot they owned it free and clear except for back taxes. The property was about to be seized by the local municipalities and sold for the owed real estate taxes when we stepped in and bought the company. When the previous owners realized that there'd been large tracts of land they could have sold off easily before selling the company, they filed a lawsuit to get their company back. They lost their bid. Do you know who was about to pounce on them before I stepped in?"

"Don't tell me. South-Core?"

"Exactly. Now, in exchange for turning over control of your company to me, I'll pay you 10 million dollars."

"Just $10 million? For $240 million in assets?"

"Well, let's not forget the little matter of $70 million in loans."

"Still, it's not very much for me."

"Do you think that South-Core is going to make you a better offer before they file their paperwork with the courts next week?"

"After seeing what they've been doing behind my back, I think that South-Core wouldn't offer to hold the door for me while I move my personal things out of my office."

"That's probably right. You're still a young man, Roy. By selling to me, all your debts will be cleared up immediately. The delinquencies are still a matter of record, but since all the debts will be satisfied in full without the courts getting involved, a few months of delinquencies won't stop others from doing business with you again, and you can reestablish pretty good credit with a one year history of timely payments. With ten million, you can buy a nice little paper plant somewhere and start again. Naturally, I suggest that you rethink your financing strategy next time. Or, if you prefer, I'll give you the original plant in Alabama and a million dollars in supplies, in lieu of the ten million. It will be free and clear of all liens and encumbrances. You can start production immediately without a cent of debt."

Roy looked at me strangely. "Right back where I started fifteen years ago, eh? Lady, you got bigger cojones than anyone I ever met. You're nothing but a conniving corporate raider. You're the reason that I'm in this fix to begin with."

"Me," I said, startled. "I never met you before today."

"The day you bought Appalachian Paper, was the day my problems began. All of sudden I started losing customers left and right. I found out they were going to Piermont Paper for their needs."

(continued)

  

  

  

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