The activity had been welcome. As the three weeks went by, she had become more and more confident that the On-Line transaction would be a “star in her diadem” (a phrase that Chase & Ward associates derisively used among themselves to describe a triumph; it had been the highest encomium bestowed by a long-deceased Executive Partner, if one seldom accompanied by a raise or a bonus).
Bill Richardson, still tied up with the Argosy financing, only appeared rarely at the On-Line meetings and made no pretense that he, rather than Merriman, was in charge. When he was around, Rawson continued to treat him as a court of last resort, reraising points already negotiated. Merriman had been glad Richardson’s time for her transaction was limited.
The previous Saturday she had worked until very late, pulling together the “due diligence” memorandum for Lovett, finishing it in time to have it delivered to the Park Lane just prior to his arrival from L.A.
Then yesterday, Sunday, she had gone to dinner with Lovett and her live-in boyfriend, Marshall Genakis. Genakis, another émigré from Palo Alto, was the owner of a trendy restaurant, called Marshall’s, located not far from Clinton Plaza. The restaurant was closed that night, so they had met at Orso, where Genakis had been warmly received by his fellow restaurateur, Joe Allen, and the maître d’ of the evening, Ted McGee.
Genakis and Merriman had first become lovers in Palo Alto and, with Lovett, had been an inseparable trio while they all lived there. Lovett and Genakis were then best friends, so close that Lovett’s ineffectual try at stealing Juliana away from Genakis had not caused lasting damage to the friendship. Gently rejected by Juliana, Lovett had concentrated his emotional energies on his growing business and never seemed to feel the need to find a substitute for her. As for Genakis, once he had come to New York and developed his plan for a restaurant, Lovett had made him a substantial loan on easy terms that only a friend (and a rich one at that) would provide.
Lovett now saw his old pals once or twice a year, usually when he called unexpectedly on whirlwind business trips to New York. Together once again at Orso, they had eaten pizzas and recalled escapades from California days. Merriman had declared a moratorium on talking about the merger: “I’ve lived and breathed the Wylie brothers for three weeks now. Tonight I want to relax and enjoy myself for not less than forty-five minutes.”
Shortly after ten, she had excused herself to return to Chase & Ward to make sure everything was in order for a meeting the next day at which the Agreement of Merger would be signed.
“You two can talk the night away if you like,” she had said. “Just be at Conference Room B at ten, Alan. I’ve got a dog and pony show all lined up for you. We’re going to snow you with the results of our due diligence, though I can’t say there are any big surprises. Your friends the Wylies will be along at noon to sign up.”
Genakis had been asleep when Merriman got home, and remained so when she left early Monday morning for the office, so she did not know how late he and Lovett had been up. Judging by Lovett’s appearance when he arrived, the evening had not been an early one.
“You boys behave last night?” she said to him in a voice too low for Beth Locke, arranging documents on the conference table, and Harold Lane to hear. “It doesn’t look as if you did.”
“I’ve felt better,” Lovett said, abruptly. Merriman attributed his gruffness to a hangover and thought nothing of it, especially since he soon relaxed and got down to business.
“Alan, you read the memo I sent over to the hotel on Saturday. That was my attempt to put down in one place everything we learned about On-Line. As I said last night, there aren’t any real land mines. Nothing that would affect the value of the business, or the price you’re paying. I gather Price Waterhouse comes out the same way.”
“Yeah. The accountants have quibbles over some personal items the brothers charged to the business, but nothing important. I must say those boys have taught me a thing or two about deductible expenses.”
“There were one or two things we did want to go over with you personally,” Merriman explained. In succession she summoned the participants in her “dog and pony” show—firm experts on insurance, pension plans, litigation and real estate, as well as a young corporate associate who reported on what he had found in the minutes of the meetings of On-Line’s board of directors.
Their report raised only three items that Lovett found worthy of attention: a series of arrangements under which On-Line’s warehouse space was leased to it by a partnership owned by the Wylie brothers and their wives; leases of chauffeur-driven Cadillacs for each of the brothers; and a company apartment in the Sherry-Netherland in New York.
“How long are the warehouse leases for?” Lovett asked the Chase & Ward real estate lawyer who had read them.
“There are three leases, one in Jersey, one in Des Plaines, Illinois—that’s right near O’Hare Airport—and one in Oakland, California. The Wylie partnership’s the landlord. The leases are all alike and run for another ten years.”
“What’s the rent?” Lovett asked.
The lawyer produced the figures and said they did not seem out of line to him, but he was not an expert on rents in the three locations.
“Are they standard leases?” Lovett asked. “Or sweetheart family deals?”
“They’re good leases. They wanted them to stand up for tax purposes, so they didn’t fool around.”
“If we’ve got firm leases for ten years, and it’s a fair-market rent, I don’t give a damn who owns the property. Isn’t that right?” He looked at the real estate lawyer and Merriman for confirmation. They agreed.
“I’m more worried about the cars. Limousines with drivers, that’s pretty fancy. And expensive. How long do those agreements run?”
“They’re cancelable on ninety days’ notice,” Merriman said.
“Then I think we can forget them for now. Make a note to give a cancellation notice the day we take over. But I don’t see any need to debate this one with the Wylies. We’ll just terminate.”
“They may not like that, Alan,” Merriman said.
“Tough. Those boys are getting a good deal and they don’t have to have that kind of sweetener. They don’t need that company apartment, either. Hell, they all live in New Jersey, why is there a fancy set-up in New York?”
“That one’s a little tougher,” Merriman said. “The lease with the Sherry-Netherland has another fifteen months to run.”
“We’ll talk to the hotel. It may cost us something, but I’m sure we can get out of it. Or maybe I could use it myself. I’ll bet it’s a palace compared with the broom closet they managed to put me in at the Park Lane this time.”
“So you don’t want to bring the apartment up?” Harold Lane asked.
“Right. Let sleeping dogs lie. Where are the sleeping dogs, anyway? It’s twelve-fifteen. Before they get here, let me repeat—I don’t want to talk about the cars or the apartment today. And I also don’t want to get maneuvered into having lunch with the Wylies. I’ve got a couple of errands I have to do this afternoon, and I’m getting the four-thirty American to L.A. So no fooling around with lunch.”
He’s probably too hung over to eat, Merriman thought.
“Here they come now,” Lane said, as the Wylie brothers and Frank Martin came into the room, accompanied by a woman Merriman at first assumed must be the Wylies’ mother. She turned out to be Mavis Zimmerman, the secretary of On-Line and the guardian of the embossing device that would be used to imprint the company’s corporate seal on the merger documents about to be signed.
The Wylie party was followed in short order by Ed Sharett and Angelica Post. She was struggling to manage a dozen copies of the final version of the loan agreement between Applications and First Fiduciary. They were still warm, having just been snatched by Post from the Rudenstine & Fried reproduction room as she had dashed to meet her client. Beth Locke took the copies and put them down next to the other documents at the end of the table.
“Now that we’re all here—I a
ssume the investment bankers aren’t coming today—maybe I should explain where we’re at,” Merriman said. “Bill Richardson apologizes for not joining us. He had to be in Detroit again today. Now, except for a few loose ends, which I’m sure we can button up in the next few days, even with the holidays, our due diligence review is finished. And so is Price Waterhouse’s. Alan Lovett may want to say something more about that when I get through.”
Glenn and Herbert Wylie, sitting in the same chairs where they had placed themselves at the first meeting and all the negotiating sessions since, looked at each other in alarm. What did Lovett have in mind? their looks seemed to be asking. Merriman saw this and laughed.
“Don’t worry, fellows, I don’t think there’ll be any bombshells,” she said. “So let me go on and describe what we have here to be signed. First is the basic Agreement of Merger, which we’ve all now been over about fifteen times and on which I think everybody’s signed off. It provides for the merger to take place next week, if all the conditions precedent are met.”
“You still hope to close on the twenty-ninth?” Ed Sharett asked.
“Thursday, the twenty-ninth, that’s right,” Merriman answered. “That gives us one day’s grace, if we need it. Here’s the Certificate of Merger, which will be filed in Delaware on the twenty-ninth. And, of course, your employment agreements.”
“I’ve got a question about them,” Skip Wylie said. “They don’t say anything about our limousines. I think they should.”
“Limousines? I don’t understand you,” Lovett said, disingenuously.
“Yeah, well, Herb, Glenn and I all have company cars, cars and drivers that On-Line pays for.”
“Skip, as far as I’m concerned, that’s a detail,” Lovett said. “It’s not part of the big picture, which is to get this deal done by year end. Save it till we’re married.”
“It may be a detail for you, Mr. Lovett, but it’s important to us. Frank, shouldn’t the cars be covered?” Skip Wylie asked, turning to Frank Martin, the family lawyer.
“Skip, you can put anything you want in your contract,” Martin said, uneasily. “If you want to cover the cars, we should cover the cars. Or you can wait, as Mr. Lovett says, and talk about them later.”
“What do you recommend?” Skip asked him.
Martin shifted uncomfortably, but Lovett saved him from further embarrassment. “Look, I thought I made myself clear. We’re not going to discuss a lot of trivial stuff now. The cars can wait.”
“Herb? What do you think?” Skip asked his elder brother, plaintively.
“Of course the cars are important, Skip, but I have faith that Mr. Lovett will be fair when we talk about them later,” Herb said. He had detected the steel in Lovett’s tone and was not going to prolong the debate. Merriman had caught it too and marveled, as she had more than once doing the negotiations, at Lovett’s capacity for toughness, a new veneer to his laid-back, California-mellow persona that his business experience must have given him.
“And what about the apartment?” Skip Wylie persisted. “That’s important, too.”
“I know about the apartment,” Lovett said. “My answer’s the same on that. We’ll evaluate it in due course.”
“The apartment, the apartment,” Herb Wylie mumbled. “You know I’ve never even been there? Some people use it though,” he said, looking pointedly at Skip.
Seeing that glance, Juliana Merriman thought that it was just possible that the On-Line corporate apartment doubled as Skip Wylie’s trysting spot. Her suspicion was not allayed as she saw Glenn Wylie’s sudden uneasiness and his peremptory statement that there were “more important things to get crossed off the list” than the future of the Sherry-Netherland apartment.
“You brought the new loan agreements, Angelica?” Merriman asked First Fiduciary’s lawyer. “That’s the last document that will get signed today.”
“I put copies there on the table,” Angelica Post replied. “One is red-lined to show the changes.”
“The only changes are the ones we talked about yesterday, I assume,” Merriman said.
“Yes.”
“I’ll look at the red-lined copy in a minute. Let me explain that also here on the table is a draft memorandum of closing for the twenty-ninth. It lists all the documents that will be exchanged next week, and at the back is a list showing who is responsible for producing each one, and the quantities we’ll need. Please look it over before you leave and let me know if you have any problems.”
“Can we begin signing now?” Glenn Wylie asked.
“In just a minute,” Merriman replied. “I have one question. When I was getting up the list of closing papers, I put in a consent from Machikin Bank. We haven’t seen anything on that yet. What do you know about it, Mr. Martin?”
“Nothing. The Schoonmaker people in Tokyo are taking care of it, as Harvey Rawson’s already told you. I checked with Rawson yesterday and he assures me everything’s going forward. But I haven’t seen anything, either.”
“Well, can you be a committee of one to keep after Rawson? The consent’s very important for all the reasons we’ve mentioned and I don’t want it to fall through the crack.”
“Fine,” Martin said, making a penciled note to himself.
Guided by Merriman and Beth Locke, Alan Lovett signed multiple copies of the basic documents on behalf of Applications, as did Harold Lane, as the company’s secretary. He affixed the corporate seal to each, and a young Chase & Ward secretary, who was a notary public, completed the notarial acknowledgments.
“Who signs for your side?” Merriman asked the Wylies.
“Herb and I together,” Glenn Wylie replied. “And Miss Zimmerman, our secretary, will, too.” Merriman began handing the documents across the table to Frank Martin, who hovered over his clients as they signed their names. Skip Wylie, not participating in the process, watched his brothers uneasily.
When the signing was done, and Merriman had exhorted everyone to take—and look at—a copy of her closing memorandum, Herb Wylie spoke up.
“I think we should have a round of applause for Mavis Zimmerman. Today is her sixty-seventh birthday and she was supposed to go to a lunch with the girls from the office. But we made her come here instead.” Herb began clapping and the others in the room dutifully followed. “In fact you’re all invited to lunch and we’ll celebrate Mavis’ birthday in style.”
In the face of Mavis’ lifelong loyalty to On-Line, Alan Lovett couldn’t refuse, in the interest of future labor relations with his about-to-be-acquired new employees. As they headed off for Bellini (Skip Wylie, clearly the high-liver in the family, had already made a reservation), Merriman reflected on the morning. The deal had been signed, even though the three things her client had not wanted to occur had: discussions of the Wylies’ cars and their company apartment, and being trapped for lunch. Oh, well, he still should be happy, she thought; he won all the big things, and certainly none of the details remaining was likely to cause much trouble.
CHAPTER
4
A Merger Made in Heaven: III
After steady work for over a month, Juliana Merriman had looked forward to an extra-long New Year’s weekend, extended to four days by tacking on Friday, December 30, but the elements had conspired against her. The eastern seaboard had been hit with a fierce blizzard the previous Tuesday, shutting down all the airports and postponing Alan Lovett’s and Harold Lane’s arrival in New York by a full day.
The delay and the remaining open items were enough to make Merriman decide that the closing should be put off until Friday, with the pre-closing on Thursday. She realized that this pushed the consummation of the merger perilously near to the last business and banking hours of the year, but it seemed the safer course. She did have enough doubts about her decision that she had consulted Bill Richardson, catching him before he flew to Detroit once again on Wednesday. He had agreed with her reasoning, though he cautioned her that “your friend Rawson won’t be happy.”
“Anoth
er word of warning,” Richardson said. “I’m taking Friday off, come hell or high water. If this damn snow doesn’t interfere, I’ll be back here late tomorrow and can sign the opinions for your Friday closing. Then I’m off to East Hampton. Brian Heyworth will be here if I get stuck tomorrow, or if you need anything Friday.” Richardson was referring to one of his partners who was “under-utilized,” as the expression went, and for whom a major role seemed to be acting as a substitute for his busier colleagues.
As the result of the postponement, Merriman was now, at two o’clock on Thursday, the twenty-ninth, staring at the enormous table in Conference Room B, on which sixty-four blue sheets had been laid out, each bearing a description of the closing document that would (she hoped) be placed on top of it. Harold Lane, who had arrived on the crowded and late overnight “red-eye” from Los Angeles, and Beth Locke worked their way through the three large boxes of documents that had arrived from his office by Federal Express that morning. They processed and examined each one methodically and then placed it on its proper blue sheet. Progress had been slow because almost all the documents, while prepared from drafts supplied by Merriman, required changes of one sort or another. Stripped down to his short-sleeved nylon shirt and light-gray slacks, Lane dutifully made the pen-and-ink fixes requested by Locke, unfazed that a paralegal was correcting the papers that he, a lawyer, had produced.
The sea of blue before Merriman was discouraging, though she knew it would, if all went well, magically turn to a blanket of white by the time the afternoon was over. She recalled with amusement having read in an early Louis Auchincloss novel, given to her by an aunt when she entered law school, a description of the pristine, balletic beauty of a closing. Auchincloss must have operated in a neater legal world, she thought. The floor along the wall was filling up with superseded pages that had been replaced with corrected versions. And the table at the end was littered with Styrofoam coffee cups and half-eaten containers of Chinese food, ordered up by Locke that morning in excessively large quantities, since she had not been sure how many people would be around at lunchtime. The room was a slum, and a rancid-smelling one.
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