Tate — Banff, Canada
The legendary Banff Springs Hotel, built in 1888 by the Canadian Pacific Railroad, rose majestically from the pines atop a confluence of spiritual mountain crossings. Wayland Tate’s fondness for the Scottish baronial hotel and its mystical environs brought him to the resort at least twice a year. On this trip, he’d wanted to accompany the group of clients he was sending off on a two-day helicopter skiing trip to remote slopes in British Columbia. These were undoubtedly some of the most beautiful mountains on the face of the planet, but even greater pleasures awaited him today. David Quinn’s manipulation was about to reach new heights.
Outside the hotel’s elegant lobby in the large roundabout, Tate’s clients finished loading their gear and entering the vans that would take them to the helipad. He half-warned, half-bantered with them about sudden avalanches and sheer cliffs while, out of the corner of one eye, he watched David Quinn and Jules Kamin arrive in the lobby. As planned, Vargas had convinced Quinn to ski with her later in the morning instead of going on the heli-skiing trip. Now it was just a matter of minutes before Tate would be determining Quinn’s future.
Once the vans were on their way, Tate joined Kamin and Quinn in a secluded part of the lobby next to an immense fireplace. Quinn was venting his frustration to Kamin.
“Somebody at Kresge amp; Company spilled the beans,” Kamin said, clueing Tate in on what Quinn was saying. However, both Kamin and Tate knew perfectly well what had happened, since they were the ones who’d set things in motion. The first event in the Musselman stock-manipulation plan had been implemented.
“They’ll pay for their arrogance,” Quinn said, still fuming. “They promised both me and MacMillan that they wouldn’t talk to the press. That was the only reason we let them keep the fees we’d already paid them. You watch me sue their asses for defamation, mismanagement, and fraud.”
This was the moment Tate had anticipated. Everything had come together as planned.
“What happened exactly?” Tate asked, his characteristic smoothness and feigned concern oozing from every pore.
Quinn looked like death as he told Tate about the call he’d just received from his administrative assistant.
“A reporter at The Wall Street Journal says he has confirmed information that Kresge amp; Company was fired because it questioned Musselman’s future viability. He knows all the details about Kresge’s recommendation to break up the company.”
“Are you sure he’s got confirmed sources?” Tate asked, for effect.
“He says the story’s going to run Monday morning, with or without confirmation from Musselman,” Quinn said.
“What was MacMillan’s reaction?” Tate asked.
“I haven’t talked to him or any other members of the board. You’re the first,” Quinn said, rubbing his hands over his balding head.
“Word of the story must be spreading by blogs,” Tate said, letting a look of anguish fall over his features.
“This is exactly what I was afraid of. And it only gets worse,” Quinn said, shaking his head and closing his eyes. “Hardware City has been buying our shares for the past several days. They’ve already acquired close to fifteen percent of the company and we don’t have a poison pill because I don’t believe in them. Our shareholders are salivating over the imminent tender offer. God, I’m such a fool.”
There was a prolonged moment of silence as Tate stared out the large windows at the snow-speckled pines near Bow Falls. He could barely contain himself. Having placed Quinn in this predicament gave him a rush of pure psychic energy. This is what Tate lived for-the artful, unfair, and always deceptive manipulation of a rich and powerful CEO. In fact, he could no longer live without it.
“Maybe there’s another way to look at this, David,” Tate finally said to break the silence.
“If you can find a silver lining in this, I’ll write you a blank check for your services.”
“That won’t be necessary, David. There’s always opportunity in crisis.”
“Of course there is for Hardware City’s management. They’ve been dying to get their hands on my warehouses for years.”
“No. For you, David. For us. For our friends.”
“What are you talking about?”
“We’ve seen this scenario before,” Tate said. “Bad news gets leaked just before the weekend, the stock price begins dropping, and everyone in the trading community knows the details before the market reopens. The Monday morning sell-off, combined with the bad press, drives the stock price to new lows. Bottom line? One investor’s nightmare becomes another investor’s dream. When the stock bottoms on Tuesday, we buy more than we can afford.” Tate paused and placed his hand on Quinn’s shoulder. “And, that’s exactly what we’re going to do.”
“Who’s we?”
“You and I, Jules, and a group of clients committed to helping each other make a lot of money.”
“That’s not going to stop Hardware City, and you know as well as I do we don’t have the debt capacity to buy back our stock.”
“No need for that,” Kamin said, having remained quiet since Tate arrived, just as rehearsed earlier. “Our way is better. A consortium of clients purchases twenty-six percent of Musselman’s stock before closing on Tuesday. A second suitor, friendly, of course, buys another fifteen percent at the same time. You purchase another ten percent and we’re completely insulated from any takeover, without raising suspicion. We’ll do it all simultaneously. While Hardware City is busily acquiring shares to establish a minimum ownership position, which will probably be something around forty percent, we’ll shut them out.”
“You know I can’t do it. In the first place I don’t have a billion dollars lying around to invest. In the second place, it’s illegal. Not only do we release quarterly earnings next week, we’re about to launch America’s Warehouse. I’m in a blackout period, you know that. The SEC would crucify me.”
“We can take care of the legalities,” Kamin said, stepping closer. “The first thing we’ll do is collateralize your Musselman stock options through a foreign lender into a blind Nevada corporation owned by a Nevis Trust. Everything will be completely untraceable. The Nevis Trust will then use the proceeds from the collateralization to obtain a line of credit. That line of credit will be used to buy ninety-five million shares of Musselman stock on margin. Only twenty-five percent of the value of the stock will be required for deposit. The rest can be borrowed from the broker. The stock price doubles before margin call, and the Nevis Trust cashes out over a three-day period. You make a killing and prevent a takeover.”
“Why can’t your partnership of clients or this new suitor you’re going to arrange buy the remaining ten percent?”
Tate came back into the conversation, “Because they’ll want to know you’re in this with them, David.”
Quinn looked scared and trapped. He was in over his head. In less than forty-eight hours when the New York Stock Exchange reopened for trading, Musselman’s stock price would continue dropping and Hardware City would give shareholders a way out, by buying their shares at a premium. Life as Quinn knew it would be over by Wednesday, unless he accepted Tate’s offer. He should have done more to prepare for the possibility of a takeover, as remote as it may have seemed weeks ago. And he might have, had he not been so involved preparing for America’s Warehouse. Now, he had to choose. Either accept Tate’s offer and be beholden to Tate for the rest of his life or reject it and lose everything. There were no other options, at least none that could be developed in time to stop a Hardware City takeover, and Quinn knew it.
Tate didn’t expect it would take long for Quinn’s moral dilemma to give way to his obsession for preserving control of the J. B. Musselman Company.
Quinn rubbed his fingers across his large forehead and peered at Kamin.
“You’ve done this before?”
“Yes,” Kamin said.
“How many times?”
“Dozens.”
Quinn’s face froze in astonishment.
“No, David, we didn’t create this situation,” Tate said. “Actually, it happens more often than you might think. We just know how to turn it to our advantage.”
Small beads of sweat began forming across Quinn’s forehead. He took a deep breath. “You’re certain there’s no way to trace my involvement?”
“Absolutely no way,” Tate said with his characteristic arrogance.
“And if you’re wrong?”
“We’re not,” Tate said. “You once told me you wanted to buy a ski resort in Idaho.”
“I’ve considered it, but what does that have to do with…”
Tate interrupted, “The Nevada Corporation will be set up as a resort development company. The investment coming from your collateralized stock options will be made to look like foreign investment, to be used as working capital for the selection, acquisition, and development of ski resort properties. The cash will remain in the Nevada corporation at all times, and will only be used by the Nevis Trust as collateral for obtaining a line of credit to purchase the ninety-five million shares of Musselman stock on margin.”
Quinn folded his arms across his chest and glared at Tate. “Is this what you wanted, Wayland, to own me lock, stock, and barrel?”
“Don’t be silly, David,” Tate said, putting his hand on Quinn’s shoulder. “This is what friends do for each other. Don’t forget, we all have a lot riding on the success of America’s Warehouse. A takeover by Hardware City could jeopardize everything.” Tate paused a moment to let his words register. “Your interest is our interest. We can have all of this worked out by Monday morning. It’s what we do for clients in crisis. In the meantime, enjoy your day of skiing with Andrea. They say it snowed all night at Sunshine Village, two feet of fresh powder.”
Quinn’s face was flushed. He said nothing.
“If you’re not comfortable, we won’t go through with it. It’s your call, David.” Tate could see Quinn’s anger, but the trap had already caught its prey. That was life. It was time for Tate to cash in on his investment in David Quinn.
Quinn walked over to the huge window and stared at the snow-covered pines. A couple of minutes later, he returned to where Tate and Kamin were standing. The look on Quinn’s face had changed from anger to resignation.
“Okay,” he said. “Tell me exactly how we go about borrowing the money against my stock options.”
That was it. Quinn was now theirs for as long as they wanted to manipulate him. He savored the moment as Kamin answered Quinn’s question in precise detail, assuring him that the funds could be made available immediately, through a European investment fund created for just this sort of emergency. After that, Kamin suggested they meet before dinner to sign all the necessary papers.
Looking stoic yet relieved, Quinn agreed to the meeting and then shook hands with Tate and Kamin before leaving for his room.
As Quinn walked away, Tate leaned over to Kamin and whispered, “I think events one and two of our plan can be considered a success.”
They exchanged roguish smiles.
Several hours later, alone in the private smoking lounge of the Banff Springs Hotel, with its dark cherrywood walls, plush Persian rugs, and soft leather sofas, Wayland Tate and Jules Kamin lit nine-inch Havanas and raised their Dirty Martinis to the initial success of their stock-manipulation plan. After a beautiful day of skiing with Andrea Vargas, Quinn had quietly acquiesced, signing all of the necessary paperwork to collateralize his Musselman stock options. The dinner that followed had been extremely pleasant, and Vargas later reported that she and Quinn shared several goodnight kisses before bedtime. Everything was going as planned. David Quinn had now been locked into the secret partnership until he died.
As the buzz from their martini’s and cigars grew, Kamin turned to Tate with a question. “Are you anticipating any last minute reversals from Quinn?”
“No,” Tate said. “We just need to make sure there are no hitches in the ongoing execution.”
“He’s feeling trapped and he doesn’t like it,” Kamin persisted.
“Of course he doesn’t like it. He’s addicted to running his own show. But what choice does he have?”
“Like I said before, we don’t want another Zollinger on our hands.”
“Where’s all this worry coming from? You keep asking me the same damn question,” Tate said without hiding his annoyance. Then he sucked on his cigar while considering Kamin’s enduring fear. Kamin had to be obsessing over more than the failed acquisition of Fielder amp; Company, Tate thought. Was it the neutralization of Charles Fielder? Whatever it was, Tate didn’t like it.
“I don’t know, Wayland,” Kamin said, exposing his feelings of uncertainty and vulnerability. “Maybe it’s the rising body count.”
“There’s huge risk in what we’ve decided to do, Jules,” Tate said. “Charles’ disclosure plan used to be our immunity blanket, but now it’s gone. This is a whole new ball game with higher stakes and even greater rewards, which means whenever things go bad, our damage control must be swift and merciless. Call it our new competitive advantage.”
Kamin smiled as Tate sucked heavily on his cigar and then blew perfect smoke rings into the air. They both laughed.
“You really think we’re moving too fast with Quinn?” Tate asked after a few seconds of silence.
“I’d feel more comfortable if he were sleeping with Vargas,” Jules said.
Tate sat back, his arms stretched out along the back of the sofa. With the confident air of a pimp fully in control, he said, “I didn’t believe I would ever say this, but it’s just a matter of time. When the Hardware City takeover is averted and Musselman stock starts climbing again, Quinn will be ready to celebrate. Mark my word, that’s when he’ll sleep with Andrea Vargas. I guarantee it.”
“I hope you’re right, Wayland,” Kamin said, smiling cagily.
“Would you like to wager on it?” Tate asked, displaying a toothy grin. “Let’s say your share of the Musselman take?”
Kamin immediately shook his head, “No thanks.”
They both laughed long and loud before lighting up another Havana and ordering more Martinis.
When they finally decided to call it a night, Tate was satisfied that Kamin, while not entirely happy with recent decisions and events, would get over it. What choice did he have? Tate was in control and as usual he would do whatever it took to stay there.