by Matthew Nuth
At the desk, Paul filled out the standard papers required to admit his wife. He had also brought his check book in case he would be required to pay the hospital up front for their services. The administrative nurse laughed at him when he pulled out his check book. “Honey, don’t worry about it now. I suspect we all know where we can get ahold of Paul Simmons if you don’t pay your bill. You know my family just moved into one of your new homes. I never thought we’d be able to afford a place like that. It’s just beautiful and kids just love each having their own rooms. Now after we get done here, you can go up to the second floor, maternity. Your wife will be taken care of wonderfully and you can try to make yourself comfortable in the waiting room.”
“Thanks, and I am certainly glad you like your home. You know we are planning on a couple more phases plus we are going to open another development just to the south if you know anyone interested.”
At that, Paul heard William bust through the hospital double doors; his Mom and Dad trailing behind. “So, did we miss it, Is it a boy or a girl? Come on . . .”
“Time out, William. There is no baby yet, we just got Sam checked in. I suspect it is going to be a long night, so, really, you guys don’t need to wait with me. But thanks anyway.”
“Well, son, maybe we will stay for just a bit. I suspect they will shoo’ us out of the waiting room by 8:00 in any case.” Dad said, looking to the nurse as if waiting for confirmation.
“Mr. Simmons, your Dad is right. Everyone, but you will need to leave in 30 minutes or so. Perhaps one of your family members might like to pack you some snacks for the evening. It might be hours before your wife delivers.”
Mom smiled “I beat you to it,” she said as she pulled up a brown paper sack by the handles. “This is for you, Paul. I packed a couple apples, a muffin and a Thermos filled with some iced tea. Let’s head upstairs for at least a little while.”
“You know where you’re going, Mom? William asked.
“Where do you think you two were born? Now march to the elevator.”
* * *
“Mister Simmons? Mister Simmons?”
Paul stirred and opened his eyes to what he took as Sam’s doctor. He was dressed in a light green set of scrubs consisting of a short-sleeved shirt and drawstring pants. He still had on his scrub hat, giving the impression he had a light green bouffant.
“Yes, I’m Mister Simmons. Is Sam okay?”
To this, the doctor merely smiled and said, “Samantha came through it wonderfully and you now have a handsome baby boy. If you will follow me, I think we will break a couple rules and bring you into the delivery room.”
The hallway was eerily quiet, as they padded to the room marked “Delivery Room #1”.
“It has been a particularly quiet night, so not much activity. It is usually a lot busier than this, so normally I don’t bring fathers back here. You are in for a treat.” With that he swept open the door to expose a nurse dressed in the identical scrub setup as the doctor. She had just placed a newborn at the breast of the new mother, his wife, Sam.
Sam looked to Paul, then back the baby. “Cal, you want to say hi to your Dad?” She paused, “I guess not. You are more interested in the boob. You are Daddy’s boy.”
Paul was shocked at her comment given that two strangers were in the room with them, but then again, he figured prudence went out the door once his wife spread her legs to enable the doctor and nurse to bring this new child into the world.
Paul laughed.
* * *
Paul, Virginia, and Arlin were now in the final stretch of pulling together proposals for the next development. Proposals, plural, was important to note. After their first effort, they realized they needed focused proposals that anticipated the needs of the respective stakeholders. As such, they now had proposals structured for the zoning commission, their bank, and the utilities commission. The last had been the primary stumbling block in the first development, so this time they had put some extra effort into developing a set of targeted funding proposals based on the city’s own projections of tax revenue growth. Developments like the one Simmons & Sons were proposing were integral to these projections. The team had pulled together what Virginia referred to as 10-year pro-forma of the tax revenue impact, showing that their project would be exceptionally valuable to the city of Fort Collins’s coffers.
Paul had assumed the business plan they had pulled together for the bank would sail through approval with minimal concerns. They had reduced their current loan balances ahead of schedule and had elected to limit their request to that of a line of credit of up to $75,000. They had mistakenly understood what would concern the bank.
Their first warning that the financing might come with some unforeseen challenges came when Paul took a call from James Horton, the bank’s Vice President of Business Accounts asking Paul to make sure that he brought his Dad to their meeting to review the Simmons & Sons business plan and the request for the line of credit. James and Paul’s Dad had known each other for years, but rarely did the two have cause to get together. They had run in very different circles from their early days as kids. Paul had met with James many times over the past couple years; their initial meeting back when they garnered his approval for their first round of bank funding. He inferred from James’s call and his insistence on expanding their meeting as a vote of no confidence in Paul. He fumed.
“You will not believe what that SOB, James Horton, just did.”
“What’s that?” asked Virginia.
“He just pretty much demanded I bring Dad along to the meeting this afternoon to discuss our business plan. Not that I wouldn’t love to have him there, but the idea that we are not capable of addressing his questions really ticks me off. Heck, Dad is pretty much part-time now and it’s my company, too.”
Arlin sat quietly bouncing his eyes between Paul and Virginia, then asked, “Did he say why he wanted your Dad at the meeting? I mean, maybe something else is going on.”
To that, Virginia agreed, “Arlin, you might be right. We’ve had a great relation with the bank, and we’ve certainly proved we can manage the business. I cannot believe Horton would have any doubts in our ability to deliver on what we say.”
“Okay, okay. Maybe you’re right. Maybe something else is going on . . . you know, like wanting to know from Dad what the bank should get us for Christmas presents. I do not buy it, but I’ll give Dad a call anyway to tell him we’ll pick him up at the house a little before one this afternoon. It will make sense to run through the plan assumptions with him once again since he will now be in the meeting.
* * *
The appointment with James Horton was scheduled for 3:00 pm. Paul, Lattimore, Virginia, and Arlin approached the receptionist 15 minutes to the hour and asked to see Mister Horton for their three o’clock meeting.
“You know I don’t see that he has any meetings this afternoon, but let me bring him on down to meet you. Who can I say is calling?”
“We are from Simmons & Sons. We have had this appointment for some time, but just this morning we changed the attendees. Maybe there has been some confusion,” Dad responded.
“No problem. Please take a seat and make yourself comfortable. I will be right back.”
Several minutes later, Paul noticed the receptionist approaching from the steps, followed by a man, about his own age; someone he had never met. Eagerly approaching, the man held out his hand to greet the four, moving from right to left, Virginia, Paul, Arlin, and lastly Paul’s Dad, thereby avoiding making a potentially embarrassing mistake by guessing who might be the most important member of this management team. “You probably expected my Dad, Jim. I am Landon Horton, but please, just call me Lanny. I always hated the name Landon . . . so hoity-toity.
“Dad’s waiting for us in the conference room upstairs.” With that, Lanny turned and started out in the same direction from which he had just come, obviously
expecting Simmons & Sons to follow.
The conference room was amazing; walnut paneling, intricately carved crown molding outlining a glossy-smooth plaster ceiling, all surrounding a huge conference table that looked too big to fit through the double-hung, eight panel doors. Pouring a cup of coffee from a stainless-steel percolator was the senior Horton.
“Folks come on in. We have some coffee and some donuts over here. I thought it was about time to get us all together to have a frank talk.” Jim placed his cup on a plate with a couple donuts and several cookies and a napkin. He passed on the silverware. He was apparently comfortable eating with fingers. “Seriously, guys, grab some food. If you don’t dig in, I’ll be tempted to eat seconds. I have no self-control when it comes to donuts.” His last comment was not necessary. It was apparent. Jim had to push the scale somewhere north of 250 even though he looked to be no more than five and a half feet tall. He certainly did not miss too many meals and the sedentary life of the banker did not help.
“Lattimore, why don’t you sit next to me? It has been a long-time since we’ve a had a need to talk. Your boy, Paul, and Virginia have been absolutely superior business people. I bet they have you just enjoying life now. You pretty much retired?”
“Hell no, Jim, although I do have to admit I do not feel compelled to head into the office very often anymore.” Paul’s Dad placed a cup of coffee, sitting appropriately on a saucer, down by Jim and plopped down. “I suspect if I showed up every day, I’d just be getting in the way. Probably screw things up. These guys,” nodding across the room to Paul, Virginia, and Arlin, “have been great. So why have you pulled me into this discussion?”
“Soon enough, Lattimore, soon enough.” Addressing the rest of the group, “Let’s get started, if you are ready?”
To that they found seats at the table, all to one end surrounding the two elders. Jim started, “By now I think you have met Lanny. He just got back from studying banking and accounting at Wharton. I think you will find he will bring a lot to our relation that I just have not been capable of providing.” Looking at Lanny, “Smart, capable, educated, energetic; I was thinking of assigning him to manage your account on behalf of the bank.” Lanny blushed at the complement. Jim continued, “but I don’t think that might be the best thing for you. Instead, I want you to hire him on as your Controller.” At that he stopped and waited for a reply.
Paul did not know what to say or how to respond. Looking at the faces around the table, including Lanny, it was obvious they were as equally dumbfounded. “Mister Horton,”
“Hell, Paul, we’ve been doing business together now for years and you are on your way to becoming one of my most important customers; please call me Jim.”
“Uh, sure. So, Jim, why do you think we need a Controller and what makes you think we can afford to add another senior member to our team?” Arlin, Virginia, and Lattimore sat quietly, letting Paul take the lead.
“Look, Paul, let me be frank,” and then turning to Virginia, “Virginia, you have made huge contributions to Simmons & Sons. Your business plan proposals are so good I don’t even need to look at them. I know you guys have done your homework. You have developed a skill set that I think Lanny, over there, would be envious of, even given his platinum quality education.” Then turning to Paul’s Dad, “Lattimore, you have always impressed me with your business instinct, sharp as a knife, and with a heart. Damn impressive. But you two have to be pushing sixty. Am I right?”
To that Paul interrupted “So what’s that got to do with our business, Jim?
“Nothing other than you are getting big enough you really need to think of your next step. You have no transition plans for your senior staff. You have outgrown the ‘mom and pop shop’ if you don’t mind me saying. To be clear, I have NO issues with your team or your talents, or your business plan, or anything . . . other than you have reached a size that you only have two choices: get bigger or get smaller. It is inevitable, every company has growing pains or dying pains all the time. Unfortunately, most companies do not realize they have spiraled into dying pains until it is too late. I want to help you with your growing pains.”
“So, what are you suggesting?” Paul asked.
Jim sat out pads of papers and pens so that the Simmons & Sons team might take notes, then jumped directly into sharing his thoughts. In general, Jim was afraid that Simmons & Sons had no true succession plans in the case that they lost one of their team. Compounding that concern was the fact that outside of Paul, William, and Arlin the other five integral members of the team, Virginia, Lyle, Joe Klein, himself and Lattimore, all were in excess of 57 years of age, Joe being the oldest at 65. This is in a world where the life expectancy for a person born in the USA around the turn of the century was less than fifty years. They were living on borrowed time. Jim had stressed that he did not expect any of them to keel over in the near term, but it was only prudent to begin planning for some transitions.
There was another reason, Jim was pushing for changes within Simmons & Sons. Their structure was too risky in his opinion. He suggested it was time to move away from the proprietorship and move into a corporate structure, if for no other reason than to limit their liabilities. In the next couple of years, he also fully expected US Treasury recommendations on new corporate structures to prevail with Congress, thereby creating something called a Sub-Chapter S corporation. It would only be a matter of time before this was signed into law, and the current business structure for Simmons & Sons would be outdated. The benefits to Simmons & Sons should be significant: limit their liability to lawsuits and make transitioning the business to heirs easier. However, the law also meant they needed a real accountant to manage the books, fill out tax returns, and manage the ownership shares. Quite frankly, Jim did not see that Simmons & Sons had the requisite skills in house to handle the job, and they were getting big enough to justify the investment.
By the end of the discussion, Jim had convinced them of the need to change their structure. Even if the Subchapter S did not become law, Paul was convinced that incorporating was prudent, if for no other reason than to limit their liability. With building homes, it was only a matter of time before they became embroiled in a lawsuit. There were just too many dollars at stake.
That day, they agreed to a new, two-company structure. The first would be PW Simmons, Inc. and the second would also maintain the Simmons name, but now would just be Simmons Company. PW Simmons would be chartered with new housing and industrial developments. Simmons would be 100% owned by PW Simmons and would focus on renovation and redevelopment. Administration and accounting for both companies would all be handled through PW Simmons. An appropriate cost would be allocated to Simmons for the infrastructure support.
Lanny would join PW Simmons as the new company’s corporate controller and treasurer. Virginia would operate as their chief financial officer and drive long-term planning. Over time, Jim stressed that they would need to bring in successors for Lyle and Lattimore to focus on Simmons Co., or else they were putting a very profitable business at risk. Although it wasn’t the major contributor to growth for the combined company, the Simmons Company would still be contributing more than 20% of the total profits if managed effectively.
Lastly, the proprietorship essentially provided that Paul, William, and Lattimore all shared equally in Simmons & Sons. Jim thought this relation might need to be discussed going forward.
On this last point, Paul was glad that Jim had kept his comments brief and non-specific. He presumed that this was Jim’s veiled attempt to suggest William should not have an equal part of the company. True, Jim’s experience with William’s contribution was likely colored by his lack of reliability early on with Simmons & Sons, but he had really buckled down and showed his value over the past two years. He certainly had earned his part in the company. Paul feared Jim was being unfair and jaded with his opinion of William.
After hinting that the control and ownership
of the company be altered in the future structure, Jim had stopped.
Paul looked to his Dad. His Dad nodded back to Paul. Paul then looked to Virginia. She nodded in agreement.
Paul responded to Jim’s proposal, “Okay, you had us convinced several donuts ago.” He smiled and finished, “Jim, this all makes a lot of sense, but now we’re going to have to redo our business plans to reflect all these changes. When can we meet again to discuss our funding for the next project?”
“Paul, I am prepared to offer you a line of credit up to $200,000 today in addition to your outstanding loans, so don’t sweat it. I’ll have the completed documents to you before you leave today. I would not suggest my son leave the bank to join your company if I did not have the utmost faith in your business savvy and planning. You tell me this will work, and I’ll get the papers up here.”
Paul looked to Lanny, “So Lanny, when do you want to start? Oh, and by the way, how much did your Dad suggest we pay you?”
Chapter 16
The mention of the Mattsons was sufficient to get Uncle Bill to set aside his newspaper. “Uncle Bill, are we planning on heading back to that restaurant anytime soon? I was looking forward to our talk with Mark and Tim,” I prompted Uncle Bill.
“I think that would be good. Let’s sit with your Dad a while and then head over for a long lunch”
We both got up and walked through the living room and into Dad’s room. We were both pleasantly surprised to see Dad awake and apparently lucid. “So, I haven’t died yet. Shoot, that means I have to put up with this gut pain another day. You know I dreamt I died last night and then I was okay.”
