Bodily Harm (7 page)

“Why do you say that?”

“Sebastian Kendall recently had to step down with cancer, and Kendall’s profits have nose-dived. It was just in the paper.” She sat up straighter, as if struck by an idea. “Maybe Kyle wants you to represent him.”

“Represent him?”

“As his agent.”

“There is such a thing?”

“Don’t scoff. It can be lucrative.” Stroud chuckled, revealing perfect white teeth. “You wouldn’t think so, would you? I mean we’re talking about toys here, right? Then again, people spend five billion dollars a year on their pets. Well, the toy industry does about five times that amount.”

“And these toy companies buy designs from people like Kyle?”

Stroud explained that independent toy designers like Horgan were becoming as rare as the independent toy shops. “There’s less opportunity. The big companies buy the smaller ones, and many have their own design departments. It’s cheaper to pay them a straight salary than to pay a commission and royalties. Maybe cheaper isn’t the right word. There’s less risk.”

“Risk of what?” Sloane popped a piece of scone into his mouth and sipped tea.

“Having a toy bomb. Even with market research, nothing is certain. Kids are fickle; nobody really knows what is going to sell big and what’s going to tank. It’s a crapshoot. Do you remember Beanie Babies?”

“Vaguely,” Sloane said.

Stroud advised that the inventor of Beanie Babies, H. Ty Warner, couldn’t get a toy company to even consider the stuffed animals, then kids went crazy for them, and Warner shot into the
Forbes
list of the World’s Richest People.

“But how often does that happen?” Sloane asked, skeptical.

“Not often. But the toy industry is like the lottery. Everyone thinks, Why not me? Why not my toy? No one thought a purple dinosaur would sell, but Barney did, big time. And you probably don’t remember Cabbage Patch Kids, but they were initially rejected as being too ugly. Then they generated more than a billion dollars in revenues for Coleco in two years.”

Sloane considered the information. “And the risk is that a company could pay a designer a lot of money and have the toy flop?”

“That, and there’s always the possibility of another manufacturer putting out a knockoff before the toy even reaches the market.”

“They just steal the idea?”

“Hey, if you’re not stealing someone’s ideas in this business, you’re not trying.”

Sloane thought of Kyle Horgan and his ransacked apartment. The building manager said he hadn’t seen him in a week.

CHAPTER
FOUR

KENDALL TOYS’ CORPORATE HEADQUARTERS

RENTON, WASHINGTON

The proverbial shit had hit the proverbial fan. Following through on her threat, Maxine Bolelli had issued a press release revealing Galaxy’s bid and Kendall’s rejection of that offer. Bolelli had also sent a letter to Fitzgerald and each member of Kendall’s board of directors, berating them for ignoring their fiduciary duty to Kendall’s stockholders. In New York, Wall Street analysts were expressing bewilderment that Kendall would turn down the offer, describing Fitzgerald as stubborn and short-sighted, and opining that the rejection was out of misguided loyalty to the Kendall family heritage—words obviously planted by Galaxy’s media people.

The morning before, Fitzgerald had walked from the conference room with a bounce in his step, confident about Kendall’s future. Now he was back in the same room feeling flat-footed and anything but certain.

“How bad is the fallout?” Barclay Reid asked. Kendall’s outside counsel, Reid was the managing partner of one of Seattle’s largest law firms, Reid, Matheson, and Goetz.

“Half a dozen faxes and e-mails,” Fitzgerald said. “The most polite have called me an idiot.”

“At least two lawsuits have been threatened,” Irwin Dean, Kendall’s president of operations, added. “Including one by Clay Mayfair.”

Everyone in the room knew Clay Mayfair, the infamous New York attorney who made a living suing corporations and their boards for breach of their fiduciary duty to shareholders.

“If Bolelli is serious, her next move will be to buy as much Kendall stock as she can,” Reid said, pacing an area by the windows.

The only time Fitzgerald had ever seen the woman sit was in court. At just a shade over five feet, Barclay Reid was nearly always the shortest person in the room, but after seeing her in front of a jury, Fitzgerald knew height was not an issue. In her late thirties and a type A personality, she was a perpetual ball of energy, always thinking, always moving. Her looks were equally deceiving. At first glance she appeared ordinary—drab brown hair cut in a bob, eyeglasses without frames nearly invisible on an attractive face despite no outward attempt at glamour. She wore no makeup or jewelry but for a cross on a gold chain about her neck. Her dark gray, off-the-rack summer suit and plain white blouse did nothing to accentuate her shape, though Fitzgerald had seen her in shorts and a tank top on the golf course and recognized a figure honed by daily workouts. And yet, despite her understated appearance, every eye in the room followed Reid as she paced the floor. She had that intangible ability to command attention by her sheer determination and earnestness in defending her clients. The law’s gain had been some ministry’s loss; Reid would have been dynamic at a pulpit.

“But so long as you and Sebastian maintain your interests, she can’t gain control.”

“She could pressure the hell out of us, though,” Dean said anxiously. “Any alternatives?”

Reid pressed her palms together beneath her chin as she paced. “Kendall could make its own offer, buy back stock from disgruntled shareholders, but that’s risky. The news has already sent the stock up two and a half points. It’s inflated. When it drops, you’ll be stuck.”

“Besides,” John Feinstein, Kendall’s CFO, offered, “we’d have to spend nearly all of what remains of our cash reserves to do it. In this economy, I don’t recommend that.”

Fitzgerald expected as much. Feinstein’s idea of a gamble was eating an unrefrigerated cheese sandwich. He sat forward. “I like the idea. It’s bold. It lets everyone know that Kendall is confident about its future. Let’s get the word out to all of our media contacts. I want the financial world to know that Kendall is preparing for the holidays.”

“This is an all-or-nothing play, Malcolm,” Dean said.

Fitzgerald nodded. “If Bolelli wants to play chicken, let’s play chicken and see who flinches first.”

U.S. HIGHWAY 12
SOUTHERN WASHINGTON

SLOANE GLANCED FROM the road to the manila file on the edge of the passenger seat and wondered if Kyle Horgan had hit upon the next “It” toy. If he had, Horgan’s scribbled drawings could be as valuable as a Rembrandt, according to Stroud. And that changed everything.

Money always did.

The letter in Horgan’s file indicated he had sold his design to Kendall. If that were true, it could not have come at a more opportune time for the toy company. Just that morning
The
Seattle Times
had run an article reporting that, despite apparent financial difficulties, Kendall had rejected overtures from Galaxy Toys, the second-largest toy manufacturer in the world. Speculation was that Galaxy would now make a play to obtain the company through a hostile run on its stock. Analysts were criticizing Kendall’s declination as a poor business decision, but Seattleites applauded the move by a local institution and employer of thousands in the region.

Following the directions Sloane had plugged into the car’s GPS system, he made a right turn on State Street and drove through the heart of town, no more than a couple of square blocks of stucco buildings that looked to have been built in the 1950s. On the outskirts he drove past manufactured homes, well spaced, with metal barnlike structures in the yard and freestanding canopies under which the occupants had parked tractors and other pieces of equipment. Barbed wire on wooden fence poles pastured horses and cattle. But what caught Sloane’s attention was a large metal building that loomed over the town like Mount Rainier over Seattle. Intrigued, he decided to find out what it was.

At aT in the road he turned and drove to a gated entrance. A ten-foot Cyclone fence with three strands of barbed wire enclosed the building and a parking area surrounding it, a white sign fastened to the chain link.

KENDALL TOYS

Now this was getting interesting.

A car passed Sloane and stopped at the gated entrance, the driver talking to a guard in the booth before the gate pulled aside to allow entry. Sloane saw few cars inside the fence. Most of them were parked in a large paved area outside the compound with a footpath leading to a pedestrian entrance.

He made a U-turn and the GPS directed him to one of the cookie-cutter manufactured homes, plain beige, with an older model Volkswagen Jetta parked in the gravel driveway. A four-
foot-high Cyclone fence enclosed a simple yard with a swing set on a neatly mowed grass lawn.

It was warmer than it had been in Seattle, but Sloane slipped on his sport coat as he walked to a small porch littered with shoes: work boots that would fit a grown man, women’s tennis shoes, children’s shoes, and rubber boots. He knocked twice. A Hispanic woman pulled open the door and gave him a curious look.

“Good morning,” Sloane said. “I’m sorry to bother you. Are you Mrs. Gallegos?”

The woman looked past Sloane to his Jeep parked along the road. “Yes.”

Sloane offered a business card, which the woman accepted tentatively. “My name is David Sloane. I’m an attorney from Seattle and I was hoping for a moment of your time?”

The woman looked up from the card, suspicious. “What is this about?” She had a Hispanic accent but her English was strong.

A very difficult topic, Sloane thought. “I recently had a case in which a young boy got sick. His parents thought it was the flu and took him to the doctor, but he never got better. He got worse. By the time they brought him to the hospital it was too late. He died.”

The woman stiffened and took a step back from the door, her ponytail swinging as she turned, shouting in Spanish, but which Sloane understood. “Manny, there is a man at the door asking about Mateo.”

A Hispanic man, short but well built through the shoulders, appeared to the woman’s right, and she handed him Sloane’s business card as she told him in Spanish what Sloane had just said.

Manny looked to Sloane, hands on his hips, the Seattle Seahawk helmet on his blue shirt sticking out. “What do you want with Mateo?” His accent was thicker than his wife’s.

“I was telling your wife that I represent a family who also has lost their son. He died of symptoms very similar to the symptoms the newspaper reported your son suffered. I was hoping I could ask you a few questions.”

The man shook his head. “No. We do not talk about it.”

“I know it must be incredibly difficult—”

Manny shook his head, already closing the door. “We do not talk about it.”

“Please, just one question, not about your son.”

Manny hesitated, hand on the edge of the door.

Sloane removed Horgan’s manila file from his briefcase and pulled out the best sketch of Metamorphis. “Have you ever seen this before?”

Manny shot his wife a side glance and appeared about to answer but his wife stopped him, again speaking Spanish.

“No. The attorney said we cannot say anything, that it will be very bad for us. Do you want us to raise our children in Mexico? There is nothing for us there. Mateo is gone. We cannot bring him back.”

Manny lowered his head. “No. We do not see before,” he said. Then he stepped back and shut the door.

PRODUCT SAFETY AGENCY
BETHESDA, MARYLAND

ANNE LEROY HAD come to work excited, as she had each day for the past three months. With her degrees in engineering and product design from Georgetown University, her friends thought she was nuts when LeRoy told them she was going to work for a government regulatory agency. She could make three times her salary in the private sector. Call her naïve, but at
twenty-four LeRoy didn’t want to be making life decisions based on the almighty dollar. Hadn’t that been the new president’s message? If people believed they could make a difference, they would, and that was the best way to ensure change.

And now LeRoy was about to prove him right.

She knocked on the open door and stuck her head in the office. “You wanted to see me.”

Albert Payne diverted his attention from his computer screen and looked up.

LeRoy paused, taken aback. Dark bags sagged beneath Payne’s eyes, accentuated by a pasty white complexion with pronounced red splotches on his neck. He looked as though he had aged ten years in the three weeks he had been gone. She wondered if he had picked up the flu on his trip to China, or food poisoning.

“Come in and sit down,” he said.

She made her way to one of the two chairs across from him, placing the two-inch-thick document she carried on her lap. “How was your trip? Is it as bad over there as everyone says?”

Payne cleared his throat. “I want to talk to you about your investigation.”

LeRoy immediately perked up, as she had that fateful morning when she fielded a cold call from a preschool teacher in Shakopee, Minnesota. The woman told LeRoy that a child in her care had swallowed a magnet no bigger than an aspirin from a broken toy and she was concerned enough that she had called the parents and suggested they take the child to the doctor. Although the doctor had assured the parents the child would be fine and would excrete the magnet, the preschool teacher remained upset. She said the toy came in a box that did not advise of a choking hazard, or even that the toy included these magnets, which she said were very powerful.

LeRoy put the draft of her report on the edge of Payne’s desk, flipping through the sections. “Wait until you read what the doctor in Cleveland had to say,” she said.

Starting with leads from ASTM International, LeRoy had made calls to different experts around the country. The magnets, manufactured mostly in China, were called neodymium magnets. Comprised of a metal alloy and artificially magnetized, they were many times more powerful than typical iron magnets, so much so that the attractive forces could be a potential danger, such as to people with pacemakers. Despite this, LeRoy was astounded to find just a single report, funded by the Toy Manufacturer’s Association, that concluded the magnets were safe. Her own investigation had revealed that no one had actually done any tests to confirm the findings, or to determine what might happen if a child were to swallow more than one of these magnets, or a magnet and metal ball, for instance. She also found evidence that the China Toy Association knew that the plastic used for the toy that had broken was a problem but had not reported the problem, and that some American toy manufacturers had been complicit in the cover-up, fearing product recalls or, at a minimum, consumer restraint.