Due Diligence (8 page)

She studied the list and then looked over her shoulder at me. “I don't recognize it.”

“You don't think you typed it?”

She shook her head. “I don't remember ever using that font.”

“Have you seen that font on other documents?”

She frowned as she examined the document. “I can't tell for sure. I can't remember if I ever saw it in any of the due diligence files. Gosh, I wish we still had those files.”

I came back around to the couch and started getting my things ready. “You said you were told to send those files to SLP's lawyers. Do you remember who the lawyers were?”

“No, but I can find that out real easy tomorrow. I still have a copy of the Federal Express receipts in the file. I'll check them in the morning and give you the name when I call on the computer files.”

She walked me to the door.

“Karen,” I said, putting my hand on her arm, “I really appreciate all the time you gave me.” I gave her arm a squeeze. “You've been very helpful.”

“You don't need to thank me, Rachel. It was just terrible what happened to Bruce. I feel sick whenever I think about it. If I can help you find who did that to him, that'll be thanks enough.”

Chapter Seven

Late night was the worst time. During the days I kept busy, sometimes frenetically so, and most days I could sustain the momentum well into the evening—a noisy dinner with the radio tuned to NPR; walking and grooming Ozzie; doing a load of wash; vacuuming the rug; straightening the house; writing a letter to a friend. A little Ted Koppel, a little David Letterman, and, then, finally, unavoidably, lights out. Once upon a time I fell asleep within seconds of clicking off my reading light. Now the light served the same function as a campfire on the African savanna: it kept the hurtful things at bay. When the light went out, the memories and the pain crept in close. Often it took more than an hour to fall asleep.

The mornings seemed to fit a pattern: I would awake, and for a fraction of a second it was all just a nightmare. David was alive! And then reality would yank me back down. From there it would take a conscious effort to marshal the will to restart my day. But I would do it each morning, and as soon as my bare toes touched the carpet, Ozzie would scramble to his feet on the floor near the bed, his tail wagging furiously, and I would feel the adrenaline start to flow. By the time I left the house, I was usually dialing my after-hours answering service on my portable phone to pick up messages from clients.

This morning's messages included a frantic call from Sara Allen, the head of a small advertising firm that I represented. I felt my pulse quicken. The day's distractions had begun. I called her on my way to the office and learned that her firm had just been served with court papers filed by one of the major St. Louis advertising firms. True to form, the big boys had retained one of the largest and most expensive firms in town, and the signature block on the motion listed seven attorneys on the case. Their court papers included a motion for a temporary restraining order, a forty-seven-page supporting brief, and a notice informing us that the motion would be heard that morning at ten o'clock in Division Five of the Circuit Court of the City of St. Louis. Seems that the big boys were miffed over the recent loss of a lucrative account to my client, which was a four-person ad agency whose managing partner was, of all things, a woman.

“Forty-seven pages,” I said with a chuckle. “Perfect.”

It was a crucial strategic error. Asking a state court judge to read a forty-seven-page brief was asking for trouble. It was the equivalent of asking the judge to grab a shovel and head for the Augean stables. He'd refuse, and you'd rile him in the process.

“But seven attorneys!” she moaned.

“Relax, Sara. I'll meet you in the courthouse lobby at quarter after nine.”

“Relax?! Rachel, we're going into court against seven lawyers!”

“I know those guys. Think of them as redcoats. Big, lumbering, conventional redcoats. Sara, we're the Green Mountain Girls.”

It wasn't a complete rout, but the redcoats were in disarray by the time the judge denied their motion for TRO at 11:30 a.m. “Gentlemen,” he warned them, “I don't see much here besides a bad case of sour grapes, and last time I looked there's no cause of action in Missouri for sour grapes unless you're in the winery business. If your people want a trial on the merits, I'll give you a setting for next month, but if I were you, gentlemen, I'd try to talk some sense into them.”

Sara was delighted. She insisted on treating me to a victory lunch at Union Station. I got back to my office at one-thirty that afternoon. Jacki seemed a little frazzled as she handed me my telephone messages.

“You feeling okay?” I asked her.

She heaved a giant sigh. “It's the hormones. I feel like I'm riding the Screaming Eagle at Six Flags.”

“What's the doctor say?”

She fanned herself with a legal pad. “He says it can take a couple months to get the dosage right.”

I gave her a sympathetic smile. “Hang in there, kiddo.”

I leafed through my telephone messages as I walked into my office. There were four of them. One was from Karen Harmon. I returned her call first.

“Here's the story so far,” she said in a conspiratorial voice. “I found Bruce's computer in the supply room. I made a copy of all the files in the hard drive.”

“Great.”

“It's four disks. You want me to mail them to you?”

“No. I'll send a messenger. Leave them in an envelope at the reception desk.”

“No problem.”

I thought back to my encounter with Hiram Sullivan, chairman of Smilow & Sullivan. “Just to be safe, don't put my name on the envelope. Instead, put, um, Professor Benjamin Goldberg, Washington University School of Law. I'll make sure the messenger knows to ask for that envelope.”

She giggled. “This is fun.”

“Did you find out anything else?”

“A couple of things. I checked Bruce's time sheets. He worked most of the last two months on the SLP deal. By the way, SLP stands for—I'm not sure how to pronounce it—Société Lyons Pharmaceutique.” She spelled it to me.

“Got it,” I said as I scribbled the name onto my legal pad.

“That's why we just call it SLP,” she said with a laugh. “Anyway, he spent most of his time on that deal. About six weeks ago he billed a couple of hours to an intellectual property audit we did for Naiman Electric. Three weeks ago he billed about eight hours over three days to a personal matter for Mr. Sullivan.”

“What type of matter?”

“I can't tell from his time sheets. He didn't describe what he did for Mr. Sullivan.”

I paused to jot down:
Sullivan
—
“personal” matter
? 8
hrs
.

When I finished, I asked, “Would it be a problem to make me a copy of his time sheets for his last two months?”

“Not at all. I'll put them in the package along with the disks.”

“Great. By the way, who is the Smilow of Smilow and Sullivan?”

“Oh, he was a sweet old man. He died a couple months after I started work here.”

“When was that?”

“About two years ago.”

“How did he die?”

“It was so sad, Rachel. He was down in Miami on a consulting project. He was out walking one night after dinner and someone shot him.”

“Who?”

“They never caught the person. It was a drive-by shooting. The police said it was probably one of those drug wars.” She sighed. “He was a nice man.”

I was taking notes as she talked.

“One more thing,” she said. “I found those Federal Express receipts. The ones for the files that I shipped to SLP's lawyers. It was a lawyer in Chicago. His name is Barry Brauner and he's at the firm of—”

“Scott, Dillard and Marks,” I said.

“That's right. You know him?”

I groaned. “I'm afraid so.”

“He has the documents. According to my inventory list, he also got a set of disks with a copy of the information on Bruce's computer. I guess someone made a copy for him. Anyway, I sent everything up there exactly a week ago.”

I told Karen that I would have a messenger service send someone down within an hour to pick up the package for Professor Goldberg. Which got me thinking about the real Professor Goldberg. I gave him a call. His secretary said he was teaching his advanced antitrust seminar but ought to be back in the office in twenty minutes.

I looked down at my notes.
Société Lyons Pharma-ceutique
? I flipped through my Rolodex and called Bob Ginsburg—a law school boyfriend turned investment banker at Bear Stearns. We had survived a brief romance that, in classic Cambridge style, got derailed over politics. He was a conservative Republican—one of those pro-life, pro-death types—who was, in that absolutely maddening fashion typical of conservative Republicans, lots of fun, very sweet, and wonderfully thoughtful when not enmeshed in the Cause. We parted friends, and over the years he'd been a terrific source of the types of information that investment bankers possess.

I reached Bob Ginburg's secretary. She said he was on the other line and took my number. I returned the other three telephone calls. During the third call, which was with a gabby bankruptcy attorney in Kansas City, Jacki walked in with a note that red:
Mr. Ginsburg in on line 1
. I covered the mouthpiece and told her to tell him I'd be with him in a minute or so. I finally got rid of the bankruptcy attorney and took Bob's call.

As I hoped, he knew all about the Société Lyons Pharmaceutique and their acquisition of Chemitex Bioproducts. “Sure,” he said. “Heller ran that company into the ground. I think SLP may be getting a good deal.”

“Who's Heller?”

“Sammy Heller. He was chairman of Chemitex Industries until they filed for bankruptcy last year in Detroit.

“Chemitex Industries is the parent company?”

“Right. Just another victim of the eighties. Once upon a time, back in the seventies, Sammy Heller had a nice little company in Michigan called the Pontiac Chemical Corporation. Ironically, they manufactured solvents, which was just about the last time Sammy was solvent. He got hooked up with a couple of renegade investment bankers who'd left First Boston. They had him form a holding company called Chemitex Industries and took him on a buying spree—junk bonds up the wazoo and all kinds of weird financings,”

“I sense a bankruptcy on the horizon.”

“Bingo. As the cash flow got tighter the bankers started squeezing him. When the notes and bonds began coming due, they sent in their workout goons to stop the hemorrhaging. When that didn't work, they started foreclosure proceedings and Sammy filed Chapter Eleven.”

“Is the company still in bankruptcy?”

“Yep. There's been a trustee appointed to sell off each of the operating companies.”

There was a sudden banging noise from the other room. It sounded like a file drawer slamming shut.

“Goddammit!” Jacki hollered. Then another bang. “Oh, shit!”

“Hang on, Bob.” I stood up and put my hand over the mouthpiece. “Jacki?” I called.

“Sorry,” she answered in a subdued voice from the other room.

“Are you okay?”

I heard a sigh. “I'm fine.”

I leaned forward, trying to peer around to Jacki's secretarial station, but I couldn't see her. “You sure?” I asked.

Another sigh. “Yes.”

I sat down and uncovered the phone. “Sorry, Bob. Go ahead.”

“Is anything wrong?”

“I don't think so.” I looked down at my notes. “You were saying that the French company is buying Chemitex Bioproducts out of the bankruptcy?”

“Right. There may be some real value there, too. Pierre Fourtou—he's the chairman of SLP—has become a real bottom fisher in the States. He's bought three or four companies out of bankruptcy in the last few years. Chemitex Bioproducts might be a gem. It used to have a good name. You know who founded it, don't you?”

“No, who?”

“Your hotshot senator, the Great White Liberal Hope of the Democratic party.”

“Douglas Armstrong?” I said, flabbergasted.

“You got it. Chemitex Bioproducts used to be called Armstrong Bioproducts. Once upon a time Douglas Armstrong was a fine, upstanding businessman, before he fell into the clutches of you bleeding-heart liberals.”

“Don't start that again, Robert,” I said with grudging good humor, recalling our Cambridge days. “Armstrong's company, eh? I knew he once had a pharmaceutical company, but I didn't realize it became Chemitex Bioproducts.”

“Armstrong was in the Senate by then. Sammy grabbed it in a hostile takeover in late 1987 and changed the name to Chemitex.”

“Listen, Bob,” I said as I jotted down notes, “you guys do mergers and acquisitions. I'm trying to get a sense of what's typical. Does it sound normal for a chemical engineering consultant to spend two months doing due diligence on this deal?”

“Well, for some deals that might be overkill, but not for SLP.”

“Why do you say that?”

“Pierre Fourtou's lieutenant is a guy named Levesque. Rene Levesque. He has final say on all the deals, and he's supposed to be an absolute data demon. They call him the Doctor of Due Diligence. Every deal takes longer when he's involved because of the amount of information and the level of detail he demands.”

“Would a chemical engineer be competent to do due diligence on a pharmaceutical company's files?”

“A pharmacologist might be more familiar with certain aspects of the files, but someone with a chemical engineering background could handle it with the right reference materials.”

“What kind of due diligence would he do?”

“Think about it. What are a pharmaceutical company's biggest assets? The drugs it already has on the market and the drugs that are still in the development phase. Everyone knows what drugs are on the market. In Chemitex's case, their Hope Diamond is still Phrenom.”

“That's theirs?”

“You bet. It's what Douglas Armstrong founded his company on, and it's still a popular treatment for arthritis. But everyone already knows about Phrenom. You wouldn't need to do much due diligence on that drug beyond checking the sales numbers and evaluating the trends. The crucial due diligence is to figure out whether Chemitex has something big in the works. To do that, you have to examine the R and D files, evaluate the trade secrets, figure out what's in the works. We did some work with McNeil Pharmaceutical last year—”

“I'm sorry, Bob. Can you hold a sec?”

“Sure.”

There was an odd snuffling noise coming from the other room. I listened for a moment. “Jacki?” I called.

No response, just more snuffling. Then the sound of her blowing her nose. I set the receiver on my desk and walked to the doorway. My secretary was hunched forward, her shoulders shaking. “Jacki, what's wrong?”

She turned toward me. Her mascara was streaked down her cheeks and her wig was slightly askew. She shook her head in frustration as she stood up. “Look,” she sobbed, gesturing toward her leg.