AVARICE OR INNOCENCE
A LOGAN FILE
By
M W HUFFMAN
Avarice or Innocence© 2012
By Marshall Huffman
Dedicated to:
My wife, my girls and my boy
“It was not curiosity that killed the goose who laid the golden
egg, but an insatiable greed that devoured common sense.”
― E.A. Bucchianeri, Brushstrokes of a Gadfly -
CHAPTER ONE
Tension filled the room like static electricity. The faint hum of the air conditioner and the occasional rustling of a page were the only sounds in the spacious conference room. The eight men were arranged like opposing teams. Four on opposite sides of the huge mahogany table. On one side were two men in jeans and casual shirts accompanied by two others in expensive Brooks Brothers suits. Each was carefully reading from a thick document in front of him.
Across the table were four impeccably dressed Japanese businessmen. All four sat straight upright with their hands folded in front of them. The eldest, obviously the sempai, looked casually at his watch. The others followed almost in unison. None of the Americans on the other side of the table paid any attention. Twenty minutes silently passed before the first man laid the document on the table. The other three followed a few minutes later.
“Well, Mr. Aikimoto, I’ll have to say that this is a very impressive proposal. I can appreciate the great amount of work that must have gone into this document,” Jim Ashton said, tapping the document with his hand.
Mr. Aikimoto merely nodded his head once. He was not there for small talk and compliments. His lackeys would provide plenty of that.
“If you don’t mind, I would like to have a few minutes to talk this over with my partner and our attorneys. We won’t be long,” he said, standing and pushing the chair back from the table.
Mr. Aikimoto stood and his associates quickly followed. A well dressed receptionist entered the room and Jim said, “if you will please follow Martha, she will seat you in the next room and attend to refreshments”
“You are very kind,” Mr. Aikimoto said, bowing slightly.
They followed Martha out of the room. Jim waited until the door was closed before speaking again.
“Terry, what in the world is going on here?” he demanded.
“It seems quite obvious. They want to buy our company,” Terry Larkins, his business partner, replied nonchalantly.
“You know what I mean. You read the proposal. How do they know so much about our business? We are a private corporation. Just how much information did you give them?”
“Jim, I told you I was going to provide them with enough information to make a decent offer. I only gave them what I thought necessary,” Terry said defiantly.
“Necessary? They know our ROE, profit margin, and our turnover rate. They did a DuPont Ratio. I don’t call that necessary information. I call that stupid,” Jim said angrily.
“That’s your opinion. I felt they had to have the facts to make an honest offer to us,” Terry replied.
“Yeah. Well, that’s the other problem isn’t it? I told you before, unless it was a really staggering offer, I wasn’t going to even consider it. I don’t consider twenty million staggering,” he told Terry.
“Hey. We started with nothing but a few thousand that we scraped together. I wouldn’t call twenty million, measly,” Terry shot back.
“When you consider what we are on the verge of, twenty million? Terry, this company will be worth five or six times that much in two years or less.”
“If all goes according to our plan,” Terry snapped.
“If? Is there something you haven’t been telling me?” James asked anxiously.
“I didn’t say that. I just mean that we are not fully ready to roll out the Millennium3 processor yet. We still have to detail the beta test results. It’s too early to say if it is one hundred percent ready.”
“You said that the early results were right on target. No defects.”
“I said, no defects were found in the first batch of results. We still have a hundred or so more tests to run and analyze,” Terry explained.
“I know that, but you have nothing to lead you to believe that we have even a hint of a problem that we can’t handle do you?” Jim asked.
“No. No. No. You’re not listening. I just said it was too early to tell the world about it yet,” Terry said.
“Then I really do not understand your push to sell now. In just a couple of years we could be looking at a hundred million or more. Why the sudden urge to sell now, this minute?”
“Jim, you know this market. By the time we finish testing someone else could come along and make us obsolete. Just like we are trying to do. We have no way of knowing what the others are working on. We sit here feeling smug now, but it could all change in the blink of an eye. Nothing assures us of what the company is going to be worth in two months let alone two years,” Terry told him.
“What has happened to you? We came into this business with our eyes open. We knew what it was going to be like. You were ready to conquer the world. Now you have a little money and you want to just cut and run? I can’t believe you’re the same Terry I went into business with,” Jim said, shaking his head.
“Well, one of us has grown up. I like money. I want to keep what I have made. I don’t intend to risk everything I have gained just because you think we are going to be worth a lot more tomorrow. I want my money now,” Terry said stubbornly.
“That may be what you want, but I am not about to sell. Not now. We have come too far to just cut and run. The Millennium3 will change the computer world forever,” Jim said, sitting back down.
“Then buy me out,” Terry shot back.
“Don’t be flippant. You know our asset to liabilities ratio as well as anyone, except maybe Mr. Aikimoto in the next room. Everything I have is invested in this business. I can’t buy you out now and you doggone well know it,” Jim said.
“Then let’s sell. Jim, we have a real buyer. Real cash. Millions. You read the deal. It’s a darn good one. We have done well. Let’s take the money now and enjoy life,” Terry said.
“I can’t. Not now. I cannot simply turn my back on the potential we have. We could set this industry on its ear. We are this close,” he said, placing his finger and thumb just a few millimeters apart.
“And it could be this far in just a few days, if someone else beats us,” Terry shot back, spreading his arms as far apart as he could get them.
“Terry, you can throw all the fits you want. I am not selling. Arthur, what do you think?” Jim asked, turning to his attorney.
“Well, it is a generous offer, actually, almost too good. Maybe they know what you have in the works,” he said looking only at Jim.
“Hey, wait a minute. I hope you’re not implying that I gave him something other than financial information,” Terry interrupted.
“I didn’t say that. I mean he could have a spy inside. It isn’t unheard of in this business,” the attorney said smoothly.
“He didn’t mean you Terry,” Jim assured him.
“Well, we think it is a darn good offer and one that should be acted upon,” Terry’s attorney interjected.
“I agree that the offer is very lucrative but it’s a moot point. James is not going to sell at this time. The deal is dead as far as we are concerned,” Arthur said, turning to face Terry and his attorney.
“Just like that?” Terry said angrily.
“Just like that,” Arthur replied for his client.
“You’re a fool Jim. This is our chance to have it all. To get out of this rat rac
e and lead a normal life. You would have enough money to start a new endeavor, but on your own this time,” Terry said.
Jim stood up and said, “That goes without saying. Look, Terry, we have been friends for a long time, since college. We have taken vacations together and have become fairly well off together. I’m not doing this to hurt you. I truly believe this is the right thing.” Jim said, placing his hand on Terry’s shoulder.
“And I think you just want to see your picture on the cover of Time Magazine. This is as much about ego as money,” Terry said, removing Jim’s hand.
“I’m sorry you feel that way. We might as well not keep Mr. Aikimoto waiting any longer. I am not going to change my mind unless he is willing to offer substantially more money,” Jim said, sitting back down.
Jim’s attorney did the talking. He broke the news to the stone faced Mr. Aikimoto who just sat there for a few seconds before answering. His appearance somehow seemed a bit sinister to James now.
“This is very unwise. We have made a good offer. You have too much faith in the future potential of this small company. Look at your financial ratios. You are a house of cards. One small puff of wind,” he said, letting out a little puff of air, “and it could all come down. You need capital to survive. Sell now and enjoy life. If you wait, it may not be so appealing.”
“Mr. Aikimoto, you have been most gracious and generous. I mean no offense. I am simply not ready to sell. We are young, and like you pointed out, not terribly financially sound, but I believe in what we are doing. I know that we will be very successful given a little more time,” Jim said.
“Time is money. I cannot offer time. I can offer money,” Mr. Aikimoto replied.
“I understand. I’m sorry, we are just not selling at this time.
Mr. Aikimoto did not answer for a few minutes. Suddenly he stood, catching his Kohai off guard. They immediately scrambled to their feet and took a step back. Jim wasn’t sure what to think.
“I’m truly sorry for the inconvenience,” he managed to get out, standing as well.
“We will go. For now. You may see this as the end of the road but I view this as the start of a longer journey. Aikimoto Limited has done a great deal of work and much time and money has been spent on procuring the necessary approval for this purchase. We will not simply go away. We wish you well but we will not be far away,” Mr. Aikimoto said and headed for the door.
He reached it before Jim could react to press the button under the table to let Martha know she was needed.
Aikimoto turned and said, “We wish you good fortune. This is a volatile business. Do not dismiss Aikimoto Limited too lightly.”
With that said, he quickly left the room. Jim just raised his eyebrows. Terry brushed past him and headed for Mr. Aikimoto. They were already at the elevator by the time he caught up to them.
Jim shook his head. “I would say things are going to be rather tense around here until we get the Millennium3 on the market. Terry will be all right after that,” Jim said to the two remaining men.
“I think you are taking this too lightly. He wants to get out now. Something seems to be pushing him go get on with his life. I don’t know what it is, but it’s real,” his attorney replied.
“It’s just the jitters. He has some money now and likes his lifestyle. He doesn’t want to risk it, that’s all,” Jim said.
“If you say so. I happen to think it’s more than that. Well, good day gentlemen,” he said, extending his hand.
“Hey, you owe me lunch,” Arthur said to the other attorney.
“Well, since Jim burned a huge pile of money today, the least you could do is buy me lunch,” he kidded back.
“You’re on. McDonalds for everyone,” he shouted.
“I’ll pass,” Jim replied.
CHAPTER TWO
Jim sat in his office a few minutes later. He was still seething from the amount of financial information that Aikimoto had in his possession. He knew far too much. He counted to one hundred, sitting with his eyes closed, before picking up the phone.
“Joan, would you come over to my office?”
“Sure Jim. What’s up?” she asked.
Joan Cole had been their Chief Financial Officer since they first got off the ground. She could read Jim’s voice like a book. He was troubled and just barely under control.
“It’s about the Aikimoto deal. I would like for you to bring me copies of all documents that we supplied them with,” he told her.
“Alright, Jim. I’ll be right over,” she said and hung up.
Big trouble was brewing and she knew it. She had been reluctant to hand over so much information to Aikimoto Limited but Terry had insisted that it was vital for the deal to go through. Now she was going to be the one to have to defend her actions. She gathered the materials and headed to his office. She passed Terry, deep in conversation with some gentlemen whom she assumed were from Aikimoto Limited. She knocked on Jim’s door.
“Come in,” he said.
She opened the door and entered, taking a seat just in front of his desk. She waited for him to initiate the conversation. She would have to take her cues from how he started.
“Joan. I would like for you to read the plaque I have on my desk here,” he said, tapping the brass and wood sign with a letter opener.
She had read it a hundred or so times during the previous four years. She didn’t even have to look at it, “In failing to prepare, you are preparing to fail,” she recited.
“Exactly. Joan, I have lived by this all of my life. I seldom, if ever, go into anything unprepared. Today, I feel like I got my nose bloodied. I was totally unprepared for the depth of knowledge that Aikimoto has about DigitCom,” Jim said, trying to keep his voice even.
He could feel it building up inside of him. It was like a chemical imbalance in his system. He was doing all he could to control his actions and temper.
“Jim, you know that I have never done anything that was not in the best interest of this company. I would never give out confidential information without consulting you or Terry first.”
“I don’t remember you discussing with me the information that you provided to Aikimoto.” he said in a strained voice.
He was fighting for control. He was well aware that Joan was half the reason that DigitCom was still here today. It had been her brilliant financial maneuvering that had kept them afloat. She had pulled them out of the fire so many times he had lost count.
“Jim, I cleared everything with Terry. That has always been our standard operating procedure. You handle the strategic planning and Terry takes care of the tactical planning. That has always included the day to day financial juggling that is necessary to keep us going. On top of that, we are smack dab in the middle of our year end audit,” she calmly told him.
“I can appreciate all of that, honestly I can. But Joan, I was not prepared for what happened in there today,” he said pointing toward the conference room.
“I went over every detail with Terry as he requested the documents. He assured me that he was keeping you up to speed on every aspect of the documentation. I asked him several times.”
“Well, he didn’t. You knew he was the one who initiated this whole thing. Didn’t it ever occur to you that he might not be totally forthcoming with me?”
“Honestly it did not. I have never known him to intentionally lie to me. Why would he start now?” she asked.
“I can think of twenty million reasons,” he said.
He placed the palms of his hands against his eyes and pressed until he could see little lights dancing on his closed eyelids. At last he lowered his palms and rested his chin on them. He smiled for the first time since she had entered the room. He could feel the changes in his body. The anger was under control and he was starting to feel normal again.
She was one hundred percent right. She was just a pawn caught up in trying to balance what Terry wanted, what he wanted, and what was right for the company. He couldn’t count the number of times he had to
ld her not to bother him with the financial details, to go pester Terry. Now he was a victim of his own ignorance.
“Boss, you know I would have come to you if I suspected that Terry wasn’t telling me the truth. I would never allow you to be caught off guard if I could help it,” Joan said sincerely.
“I know it. I’m not sure what upsets me the most, the fact that I did not know much of that information or that he knew it so darn well,” Jim said.
“Not as well as you might suspect,” Joan said, smiling.
“What exactly does that mean?” he asked.
“I was not asked to provide audited statements so I made sure that any assets that were associated with the Millennium3 project were left off the balance sheet. The income statement looked rather shabby because they couldn’t know about the additional assets we actually have.”
“So we just looked fairly desperate?” he asked.
“Well sort of. Actually we are kind of desperate but just not quite as bad as it looked on paper. Besides, when haven’t we been desperate? You mentioned twenty million reasons earlier. I assume that was the offer?”
“Yeah. Terry wants to take it now and run,” he told her.
“Based on the information I provided there is no way they should have made such an offer. Seven to ten million I could believe. Twelve tops,” she told him.
“I know. I don’t know what is going on but the offer was way too high based on the ratios. That’s what really has me worried. Is there anything in those documents that could lead them to realize what we are about to pull off?”
“With the Millennium3? No way. I covered every angle. If they had offered you half of that, based on the data they were given, they would have been generous. I don’t suspect generosity is a Japanese business trait,” she said.
“Me either. So what gives?” he asked.
“Maybe you should talk to Terry. Would he have said anything?”
“I honestly don’t know. We aren’t exactly on the best of terms right now. I’ll let things cool down for a few days before I say anything. You shouldn’t say much either. He is bound to know that I sent for you. Tell him I wanted to know about our current position and how we are doing until the release of the Millennium3. It’s the truth. I do want to know,” he told her.
Avarice or Innocence (JOHN LOGAN FILES Book 1) Page 1
