Due Diligence: A Thriller (21 page)

Rob stared at Stanzy in genuine surprise.

Stanzy frowned, breathing heavily. He looked away, as if suddenly embarrassed at what he had just said.

“Pete,” said Rob. “I did not leak this story. I can only say it so many times. I didn’t leak it. You’ve got to believe me.”

Stanzy looked back. “I’m not going to ask you again, Rob.”

Rob smiled helplessly. “Pete, what else can I say? It’s the truth.”

Pete Stanzy nodded. He gazed at Rob for a long moment.

“Rob,” he said at last, “I’m taking you off the engagement.”

Rob’s mouth dropped.

“I just can’t have anyone I don’t trust on the team.”

Rob stared.

“I have to be able to trust my team, Rob.”

“You can trust me.”

“Can I?”

“Yes! I haven’t done anything!” Rob was staring at the end of his career. Right here, right now. After eight weeks. If he got thrown off a team because the MD didn’t trust him, who’d ever want him on their project? He’d be out the door at Dyson Whitney. And who’d want him then? This was it! Wasted. The MBA. The time, the money, the effort. Everything. “Don’t do this to me. Please, Pete. Don’t do it.”

Pete Stanzy shook his head. “Sorry, Rob. Someone’s on my team, I have to be able to trust them a hundred percent.”

“You can!”

“Can I? I don’t think so.”

“Yes! You can!”

Pete Stanzy sat back in his chair. Rob watched him anxiously, hardly daring to breathe.

“Well, your output has been good,” murmured Stanzy. “Sammy’s happy with you. I will say that.”

“He hasn’t seen anything yet! I can work twice as hard.”

Stanzy shook his head. “It’s not the work, Rob. It’s trust. We’re gonna send you over to London to do the due diligence. Do I trust you enough to do that? Do I?”

“Yes! You should. There’s no issue, Pete. Leopard—that’s all that matters. I’ve told you. That’s all that matters to me, getting this deal done. Just like a lawyer, Pete. You said it yourself. Doing the deal for my client.”

“I don’t know, Rob.” Stanzy grimaced. “Trust, you know … trust is everything.”

“Come on, Pete.”

Stanzy frowned. Rob gazed at him imploringly. His whole life, it seemed, was teetering on the knife edge of the other man’s decision.

“Please, Pete…”

Pete Stanzy sighed. “I really shouldn’t…”

“
Please,
Pete.”

Stanzy watched him for a moment. Then he took a deep breath. “All right. I’m going against my own better judgment here, but.… Okay, Rob. You’re back in. You’ve got a second chance.”

“That’s all I’m asking!”

“But if there’s any hint of anything … you’ve got to be whiter than white, Rob. I’m telling you, if there’s anything—”

Rob jumped up. “There won’t be, Pete. I promise!”

“Go on, then, get back down there.”

Rob nodded. “You won’t regret it, Pete.”

“Yeah, well…”

“You won’t. I’m telling you, you won’t.”

Rob marched out of Stanzy’s office and back around the edge of the bullpen, half full of disbelieving relief, half full of rampant triumph.

He was back from the dead.

20

The doors to the elevator opened. Immediately, Pete Stanzy wished they hadn’t.

“Hey, Pete,” said John Deeming, who was standing inside.

Stanzy acknowledged him with a nod and got in.

“I heard things are getting a little rocky in Baton Rouge,” said Deeming.

Stanzy didn’t respond.

The elevator began to drop.

“Thing like that in a newspaper can upset everything.”

“Nothing that won’t blow over,” said Stanzy.

Deeming laughed. “Hurricane season down there, is it?”

The elevator stopped and the doors opened. John Deeming was still chuckling as Stanzy got out.

John Golansky was on the phone. He beckoned Stanzy into his office and motioned to a seat. It was almost nine o’clock at night but Stanzy hadn’t been able to coordinate a time to meet with him any earlier.

“Yeah, Bob,” John said into the phone. “Yeah, I hear what you’re saying.” Golansky glanced at Pete and rolled his eyes.
“Just a minute,”
he whispered to Stanzy, holding the receiver away from his mouth.

Pete nodded.

“Yeah, Bob. Yeah, I’m listening. We’ve been through this a million times. You come back to me with the prospectus and we’ll start talking. Bob? Bob … don’t say that, Bob. All right … Bob … Bob … Bob, listen to me. I’ve got to go. I’ll talk to you Thursday. All right? Bob? Thursday.”

John put down the phone.

“Fucking time waster,” he said to Stanzy. “You know, before I got into this business I never would have guessed how many fucking time wasters there are.”

“Tell me about it,” said Pete.

“So?” John Golansky kicked back. He stretched himself out, hands behind his head. He was tall, well-built. A college football player. That was some twenty-five years ago, but he still had the look. “How we doing?”

Pete Stanzy grinned ruefully.

“What’s their stock price?”

“Forty-seven-point-three at the close,” said Stanzy. “That’s only three bucks down. They recovered half the drop.”

Golanksy nodded. “This doesn’t make it any easier for us.”

“Yeah,” said Stanzy. “Look, on Monday it’ll be back. No one’s going to believe what’s in the
Herald
. They’ve got nothing. They know they’ve got nothing. The Street knows they’ve got nothing.”

Golansky nodded again. He seemed to be thinking about something. Pete waited.

Golansky took his hands out from behind his head. He sat forward. “Citi’s not gonna give us the four-point-two billion as a bridge.”

Stanzy took a moment to take that in. “Because of this?”

Golansky shook his head. “They were saying that to me yesterday.”

“How much will they give?”

“Half. Maybe. If we find someone else to match it.”

Stanzy smiled. “You can do that, right?”

Golanksy didn’t reply.

Pete Stanzy laughed in disbelief. “Come on, John. We don’t get the loan, there’s no deal. You know how important this deal is.”

“I know how important it is,” said Golansky. “I just don’t want to end up going junk.”

Pete laughed. “No way we’re going junk.”

“Don’t be so quick to say it. We might not be able to get it even if we wanted to.”

Junk debt meant high-interest loans for perceived high-risk investments. They could command a five, ten, fifteen percent premium on the interest rate. But with credit still in short supply after the crunch, you couldn’t necessarily raise junk debt even if you were prepared to pay for it. In any event, the BritEnergy board wouldn’t likely approve a deal with $4.2 billion of debt financed with junk. The interest would be crippling.

“This is Louisiana Light,” said Pete. “Come on, John. It’s not some two-bit startup. This is a great company. This is a growth story.”

“With a balance sheet I wouldn’t use for toilet paper.”

True, thought Pete. “John, we’re borrowing against the integrated company. Has Citi seen the integrated balance sheet once we put Leopard and Buffalo together?”

John looked at him as if he wasn’t even going to bother answering that.

“Then I don’t see the issue,” said Stanzy. “I can’t see what Citi’s problem—”

“Is there something I should know about this client?” asked Golansky abruptly, cutting Stanzy off.

For a second, Stanzy just looked at him. Then he smiled. “Like what, John?”

“Like anything you think I should know,” said Golansky evenly.

Stanzy shook his head.

“Look, Pete. I’ve got Bruce Rubinstein on my back. After the thing with the stock price this morning, I had him in here for a half hour. Now, I don’t know why, but he doesn’t like this deal.”

“Bruce doesn’t like any deal,” said Stanzy. “If he had his way, we’d never make a dime.”

Golansky shrugged, conceding the point. “Look, I’m going out on a limb here, Pete. Way out. So I need to know if there’s anything I need to know.”

“John, as God is my witness. There’s nothing I can tell you.”

“Okay.” John Golansky grimaced. He squeezed the bridge of his nose between thumb and forefinger. “Okay. Look, Pete, I’ve been hearing things.”

“What things?” asked Stanzy quietly.

“I’ve been hearing there are maybe some tricky things that have been going on inside that client of yours. Creative things. A bit too creative, if you know what I mean.”

“Like what?”

Golansky shrugged. “No one seems to know how much debt they really have.”

“What are you talking about? It’s all there in the filings.”

“Some of it’s off–balance sheet.”

“Yeah, but that’s listed. They’ve just gotta read the notes when they look at the balance sheet.”

“
More
than in the notes.” Golansky gazed at Stanzy knowingly. He raised an eyebrow. “Stuff that no one can see.”

Pete Stanzy shook his head as if the idea had never occurred to him. “How much more?”

Golansky sighed. “No one knows.”

“So it might be nothing,” said Stanzy.

“No one knows,” repeated Golanksy.

“So it might be nothing,” repeated Stanzy.

“Listen, Pete…”

Stanzy shook his head. “No, this is bullshit, John. Someone’s trying to spike this deal. First there’s this thing in the
Herald
and the stock price takes a hit. Now someone’s telling you the Leopard’s got a bunch of debt they can’t even see. You gonna believe that? Come on, John. You gonna believe that crap? Who is it, huh? Who’s telling you that?”

“Pete, I want this deal as much as you do.”

You couldn’t, thought Stanzy.

“I said it from the start. This is a great deal for the firm. You wouldn’t have gotten it past Bruce without me. Remember?”

“And it’s still a great deal, John.”

“And I’m still out on a limb. You know their CFO down there at Louisiana? What’s his name?”

“Lyall Gelb.”

“He’s a smart guy.”

“Yeah.”

“Excellence Award winner from
CFO Review
.”

“Yeah?”

“Two years running.”

“Well, there you go,” said Pete. “I’ll be sure to congratulate him.”

“That scares the crap out of me,” said Golansky. “You understand? I don’t want some fucking smartass CFO who’s been playing games with the financials—”

“What the fuck is this, John?” Pete stared at him, eyes blazing with anger. “You’re gonna tell me you don’t want to do the deal because their guys are too fucking smart?”

“Okay. Look, Pete, I’ve been talking to Jay Hartson. You know Jay?”

Pete Stanzy shook his head.

“He’s at Merrill. Jay says—”

“He’s at
where
?” Stanzy exploded. “Jesus, John! Fucking Merrill? They’re pissed because Wilson came to us for this deal. Come on! You can’t believe a thing they fucking say!”

“I know Jay.”

“Yeah, right. You know Jay. So now there’s a code of honor?”

“Hear me out, Pete. I backed this deal from the start. Hear me out. You owe me that much.”

Pete rolled his eyes.

“All right?”

“All right,” muttered Stanzy. “I’m listening.”

“Jay says there have been some things going on. He wouldn’t tell me exactly what. That’s a hungry company you’ve got down there, Pete. It’s chewed through a lot of capital in the last five years, and it’s still hungry. Last time, Merrill drew a line. They refused to do what Gelb wanted. Some kind of loan facility, Jay wouldn’t tell me what it was. He figures that’s why they came to us when they wanted to do this deal.”

“That’s bullshit. That’s bullshit right there.”

“Maybe it is bullshit that that’s why they came to us. But Jay wouldn’t lie to me about the other stuff.”

“Come on, John. If there was a problem with Louisiana Light on the debt side, they would have gone down in the credit crunch. You know that. Everyone knows that. It’s obvious. And what happened? Nothing! The crunch didn’t touch it. In fact, they managed to raise capital. How many companies did that?”

Golansky didn’t reply.

“Merrill got its own money on the line?”

“Some, I think. Jay didn’t say exactly.”

“I bet he didn’t. And when was this with this loan facility? This supposed thing they wouldn’t do?”

“About three months ago,” said Golanksy. “I don’t think Merrill was the only one who turned them down, either.”

Pete Stanzy shook his head.

“Pete, I believe Jay Hartson. And you know what? Merrill’s pissed, like you said.”

“Mother
fucker
.” Stanzy shook his head in disgust. He knew what that meant. Whatever they were saying to Golanksy, they’d be saying to the market. And worse. “You think they leaked the
Herald
story?”

“No. Sounded to me like Jay had just found out we were working with them.”

Pete Stanzy shook his head again, thinking about the effect this kind of badmouthing would have. He’d have to do something about it, maybe start saying a few things to the market about this Jay Hartson guy. Maybe put out some kind of rumor that Hartson’s job was under threat because he hadn’t been able to hold on to the Louisiana Light account.

“You got any idea where the article came from, Pete? What about your team?”

“No.”

“What about that analyst you told me about. The one who was saying we bid too high?”

“No. He didn’t do it. I had a talk to him.”

“You sure?”

“Yeah. It was a long shot. I scared the crap out of him, though. Made him think I really thought he’d done it. I pretended to fire him.”

Golansky grinned.

“Why not? Teach him a lesson. You should’ve seen him, he was shitting his pants. Begged me to keep him on the team.”

They looked at each other for a second, then they both laughed.

“He won’t step out of line again, that’s for sure,” said Stanzy.

Golansky nodded, still grinning. They both looked out into the bullpen, where a good number of analysts and associates were still at work. Pete Stanzy had a wife and two kids to go home to. John Golansky had a wife, his second. Neither of them seemed to be in a hurry.

John Golansky stretched back again. He put his feet up on his desk. “Okay, what are we gonna do?”