Brown called Carly’s father. He hated making those calls. They ate away at him. At least the bust might help Carly and Mark. Addicts sometimes told him that being hauled into jail, and then diverted into rehab, saved their lives, but you could never tell. Arresting a couple of kids—which was what they were, really—was not guaranteed to change them or to nick Lancaster’s heroin trade.
* * *
As a matter of fact, Brown was unaware that, at the moment of Carly’s arrest, a man named Jason Roach was appointing himself Lancaster’s new dope king. Jason had just met this guy, the Cheese, in the same place lots of people in Lancaster met a connect: the Fairfield County Jail, on Main Street. What Jason was doing in the Fairfield County Jail for a day or so made for a long story, but anyway, the Cheese seemed like a good dude. Jason had met him before, you know, around, and when he heard Jason was at loose ends—just out of a South Carolina prison as of January 1, no job, no money, living on a little SSI (Supplemental Security Income)—the Cheese said, “Dude, I can totally fix you up.”
That sounded good to Jason. He was a family man, in love with Jessica Cantrell, though they were kind of broken up at the moment, seeing as how Jason had spent the past two years in prison.
Jessica, who looked a little like Ava Gardner if Ava Gardner had played in The Grapes of Wrath, arrived in Lancaster in 2005 after Hurricane Katrina. She and her mother and brothers had lived in Louisiana. They weren’t doing all that well, and the storm only made everything worse, so when Jessica’s mother called a friend who lived in Lancaster, and the friend suggested they come north, they did.
Jason and Jessica had a child together, and she had kids of her own with a couple of other dudes, though Jason considered himself their father, too. The hitch, though, was that Jason was sick of scrambling around for minimum wages and government checks. He’d watched his own mother live on SSI and never have anything, and there was no way in hell he was going to raise his little brood that way.
Jason had a soft face, with gentle eyes framed by short brown hair. A tattoo of a single tear under one eye looked like actor’s makeup for a prison picture, not the genuine tat of a guy who’d served time in prison, though Jason had done two stretches already—the first for a felony assault; he’d served five years for it. Really it was his brother’s rap; Jason just happened to be there.
He married shortly after that first time in prison, and lived for a little while with his new wife in the Columbus suburb of Upper Arlington. (Jason always stressed “Upper Arlington.” He’d grown up around Columbus and knew that rich people lived in Upper Arlington.) Life wasn’t working out as well as he’d hoped, so the couple moved to South Carolina to be near Jason’s father-in-law.
His wife went to work for her father while he got a job with a moving company. Moving’s brutal on a fellow’s back. Jason blew a disc. During the operation, the doctors gave him fentanyl, and then, after the surgery, Perc 30s—or was it Oxy? Jason never told a story exactly the same way twice—and Xanax, all of which Jason enjoyed very much, which explained how he morphed from a casual drug user into an addict, and why he used his father-in-law’s credit cards.
When he heard that a warrant for misusing them had been issued, Jason ran back to Ohio. His mother had since moved down to Lancaster. So, in 2009, Jason landed there, too. He worked a little landscaping here and there, and for a small catering business, but the pay was bullshit. He wasn’t ever going to get anywhere that way.
When he met Jessica, they fell in love pretty quickly. The relationship was messy and volatile, with a domestic violence charge against Jason and a trip to court over support, and both of those cases were complicated by Jessica’s arrest for heroin trafficking. She served a stretch in prison during 2013, right about the time Jason’s South Carolina warrant finally caught up to him. He was extradited and served a couple of years, but now he was out, back in Lancaster, and clutching a phone number provided by the Cheese.
The Cheese was a man of his word. He really did have a big-time connect: Mexicans up in Columbus.
Jessica was almost twenty-six; Jason was nearing thirty-eight. If he and Jessica were ever going to have anything, the time had come to go big and go hard.
The Cheese told him the Mexicans might front him dope—serious weight: ounces, not grams. Jason could bring it down to Lancaster, divvy it up among a few trusted junkie sellers, collect the proceeds, make another trip to Columbus, pay back the Mexicans, keep the profit, and load up again. Jason wanted to go into the wholesale pharmaceutical business.
Though he knew where he wanted to end up, he was vague on how to get there. Jason was not a management guy; he was an eighth-grade dropout who had never been able to manage himself. But then Lloyd Romine hit him up on Facebook.
Lloyd barely knew Jason. They’d met in the county jail annex out by the Southeastern Correctional Institution, on BIS Road, a couple of years before and hadn’t spoken since, but when Lloyd heard Jason was back in town, he wanted to say hello. No particular reason. When Jason saw Lloyd’s message, he said to himself, “‘He has a reputation in this town for beating people up and shit,’ and I was like, ‘Well, shit, I’m gonna put him on my team.’”
SEVEN
The Shutdown
February 2015
Mark Kraft’s family holidays had been so loving and peaceful, and the first few days of the new year so positive, that his mother, used to a stream of doom in Lancaster, wondered, “What the heck’s going on here?” She even allowed herself to share in the general optimism slowly making its way through town. Then the MCU bashed in Mark’s front door.
He spent thirty hours in the jail on Main Street. Each hour dragged more slowly than the one before, until Mark wasn’t sure what to fear most: the hour that was scraping by, or the next one to come. He’d been a little dope-sick before, but nothing like this. He didn’t sleep and didn’t eat much. What he did eat, he threw up.
He pleaded not guilty to drug-related charges in Municipal Court and posted $1,000—10 percent of his $10,000 bail—and the $25 cost for his jail time, and when he was finally released, he wobbled east down Main Street, blowing chunks into the curb.
The only way he’d managed those thirty hours was by telling himself that as soon as he got out, he would find his stash in its secret spot and get high. Then the pain would go away. The pain was temporary. He wouldn’t feel this way forever. He could see it in his mind, how it would go: his arm, the syringe, the needle, the warm, cozy feeling of safety and contentment. He made for it as soon as he could. But the dope was gone. It had been discovered.
His father went back with him to the house on King Street to look over the damage and get a few things for his stay back with his parents. Mark opened a drawer in his bedroom. A gram the cops had missed shone up into his face like a bright sun through dark clouds of T-shirt. His father was right there and saw Mark palm it. Mark knew his father had seen. That was the bad part, his father’s knowing. Mark pulled the dope from a pocket, in front of his father, walked over to the toilet, dropped it in, and flushed. It was the first time in the two-plus years he’d been shooting heroin that he’d made a choice not to use it, and his dad had seen him do that. He thought, “We did it together.”
The sweetness of the moment didn’t last long. The sickness overwhelmed it.
By early February, he wasn’t throwing up anymore, but he’d never felt worse. He ached. Anxiety infested his mind like a thousand buzzing bees, making it impossible to sleep. He lay in bed for hours, feeling like he could crawl out of his skin. To get some sleep, he picked up some Xanax—Mark always knew where to get whatever drug he wanted—though he knew he’d be tested for drugs. The Xanax helped a little, but what he really wanted more than anything was dope. Any dope, from anybody. A Perc 30 would do.
* * *
At first, when his buddy Aaron Shonk, who sat in a cubicle out at Drew Shoe making phone calls to China, told Brian there was a warehouse job opening up, Brian dismissed the idea of applying. He could
n’t afford to make that move. The Drew job started at $10 an hour, $4.50 less than he made at Anchor.
Then he thought about it some more, weighed the goods of his job in Plant 1 against the bads. The heat was bad, the machines were dangerous. The longer he worked his H-28, the more he feared losing a body part or getting burned. Really, though, it wasn’t the heat or the machines. They were in lousy shape, for sure, but in his more honest moments, he’d admit there was a small kernel of attraction to them. He had to pay attention. The job focused his mind.
The attitude of the place bugged him more than the condition of the machines. His supervisors, the men who were supposed to be training him, weren’t interested in training him—not anymore. Brant, his floor operator, still stepped in when Brian needed a hand and tried to teach him, but the rest of his bosses seemed to have given up.
The whole place seemed to have given up. He counted five other guys on his shift alone who’d left. They were all about his age. A couple of them already had journeyman cards, but they left anyway. Guys like Brant, though, were stuck. They’d been there too long and were too old to quit. But they hadn’t been there long enough—and were too young anyway—to retire. Despite Plant 1’s long slide, it still offered the best-paying jobs in town—in the whole county, for that matter—to guys like Brant, who’d grown up poor, out in the country. They had no choice but to hold out and hope the place kept running until they could earn their release.
Brian didn’t want to wake up one day and be forty-five years old and working in a run-down glass factory or, even worse, be out of a job at forty-five because it had closed. Then what would he do? He might really have to move out to Hilltop and live like a hillbilly.
His own friends sometimes wondered why he worked there in the first place. Young people around town thought you had to be some sort of sucker to work at Anchor, even if you did make more money than you would emptying bedpans at the hospital or deep-frying chicken at Buffalo Wild Wings. Plant 1 had a reputation for hiring dope-sick addicts off the street to work in the sluer. People clocked in high. Some stepped out of prison and into the factory the way workers used to step into work right out of high school. Brian got the whole “second chance” thing, but he didn’t think EveryWare Global was hiring ex-cons to be noble; he thought the company took advantage of them because Plant 1 was their last resort.
There wasn’t any prestige in working at Anchor. The place possessed zero integrity, from top to bottom.
He weighed the shift work. By going to Drew—and just working normal hours during the day, not rotating days and late nights with a day off in between, which he spent sleeping or feeling groggy, fucking up his body clock—maybe he’d have more time for art, for cutting brush at Hilltop.
At Drew he’d ride a cherry picker to pull big boxes of shoes off shelves and unload the trucks that delivered them from China. It sounded pretty mindless to him—not like making something. The job would be a new start, though. Maybe he could work his way up into a more fulfilling position at Drew.
Brian teeter-tottered up and down, one moment deciding to quit, the next deciding to stay. His mind kept coming back to the shutdown. His calculations would be very different if not for that. Those two months squeezed the last drops of spirit out of Plant 1.
* * *
At about the time Solomon was hired, in February 2014, EveryWare Global hauled the weight of $290 million in loans up its profit-and-loss chart. Its total liabilities were in the realm of $400 million. The combined Anchor Hocking and Oneida owed that money to the likes of Deutsche Bank, Western Asset Management Company (WAMCO), Voya Investment Management Company, Nationwide Life Insurance, Nationwide Defined Benefit Master Trust, Nationwide Mutual Fire Insurance Company, CIFC Asset Management, and Wells Fargo. The agreements ratifying those loans were trussed by a variety of covenants, the conditions set by lenders. For example, EveryWare was forbidden from exceeding a certain ratio of debt to earnings. Breaching any of these covenants allowed the lenders to call the loans, which EveryWare would be unable to repay. In that event, the lenders could take the keys, shut down the business, and sell it off for parts if they chose to.
Just a few weeks into his new job, Solomon realized EveryWare was about to breach its covenants. Having become aware of the prospective breach, EveryWare would have to include notice of the danger in the 2013 annual report that was just about to be issued—the company’s first since going public—and in the earnings call to follow. Solomon didn’t want to communicate this, because it could trigger panic among investors, suppliers, and employees. So, in a bid to buy time, he and the board of EveryWare decided to delay the earnings release.
He used the time to fly to New York and ask the lenders for covenant relief. Solomon still thought Anchor Hocking—and EveryWare—had the bones to become a much larger, more profitable company—but first he’d have to convince the lenders to give him time.
Solomon entered the fifty-story Deutsche Bank headquarters at 60 Wall Street unsure of the reaction he’d face. By the time he sat down at a large table inside an upper-floor conference room looking out at the glass sides of other Financial District towers with other conference rooms containing large tables, he had no doubt. An employee of Deutsche—which had played the role of administrative agent to create the loan package for EveryWare—lenders’ representatives, and lawyers all sat on the other side of the table, facing him and not smiling.
The lenders had read the same public filings Solomon had before he took the job. They knew EveryWare could be a risky bet, but they specialized in risky bets. Like Cerberus, with its Madeleine arm, they made more money charging high interest rates to outfits like EveryWare. On the other hand, they weren’t in the business of financing lost causes. The risk was a calculated one, based on the numbers EveryWare, its executives, and its owners had provided.
When Solomon was looking at EveryWare back in December 2013, he saw the huge debt, but he also saw that, in April of that year, during its initial public-offering road show, the company told prospective investors it expected over $60 million in 2013 EBITDA (earnings before interest, taxes, depreciation, and amortization), a proxy measure of how well the company operated. With good management and marketing—Solomon’s wheelhouse—you could keep a company going and slowly pay down that debt with $60 million in EBITDA. That amount was comfortably within the margin demanded by the loan covenants.
As it turned out, the results Solomon saw in March didn’t show $60 million in EBITDA, but more like $50 million. Where the $10 million went was a little mysterious. Also, the company was about to report that revenue was up in 2013, to $439.8 million, but it still lost money. Interest payments absorbed profits. Even so, Solomon believed he could salvage EveryWare on $50 million, though not if he couldn’t convince the lenders to forbear a covenant breach.
Solomon looked across the conference room table and announced to the people on the other side that EveryWare was nearly out of cash and would have to borrow more money from a revolving line of credit provided by Wells Fargo; was not paying its own vendors; and still had a warehouse full of inventory.
“We shocked the shit out of them,” he recalled. “‘How the fuck do we go from here to a breach, and nobody say anything?!’ There was a lot of venom in the room.” The bankers thought they’d been spoofed. Some accused EveryWare of manipulating the numbers. Some wanted to call the loans. Nobody blamed Solomon directly, since he’d been at the company for less than a month, but they wanted to know how the picture they had in their minds after reading the public filings and talking to EveryWare executives could be at such variance with the crisis they now faced.
As Solomon would later discover, the real EBITDA was not only less than $60 million, it was nothing like $50 million, either. EBITDA is a non-GAAP number, meaning it’s not computed using generally accepted accounting principles. Independent auditors don’t opine on EBITDA, making it susceptible to fudging. EveryWare’s real EBITDA, Solomon would later argue, was closer to $28 million.<
br />
After a series of meetings, the lenders decided not to take the keys, but they didn’t agree to covenant relief, either. By doing so, they handed responsibility squarely back to EveryWare’s majority shareholder, Monomoy Capital Partners. Meanwhile, analysts and investors were still waiting for an earnings announcement.
On March 31, Monomoy sent a credit agreement to Pierce Avenue committing Monomoy to buy $12 million worth of stock, debt, or other security should the company actually breach a covenant. If needed, the $12 million would be applied to equity to bring EveryWare back into covenant compliance. That same day, EveryWare issued a press release highlighting its earnings. It claimed the company made $51.5 million of EBITDA. There was a net loss of $17.4 million. The loss reflected all kinds of one-time and special items.
Solomon faced a dilemma about what to say on the earnings call. He had a choice between two truths. He could say he believed in the company, was excited about its prospects, and saw lots of potential. For all the neglect and decades of humiliation, Anchor Hocking was still one of the most important players in the American glassware industry. No other company made glass using as many different processes, or had as many different products sold to retailers, the food service industry, candlemakers, florists, winemakers, and distillers. Anchor was still the largest domestic maker of glass bakeware, not only under its own brand, but also Pyrex, which it made for a company called World Kitchen. Or he could say EveryWare Global was in the emergency room with a defibrillator pasted to its chest.
Glass House Page 15
