The Prodigal Daughter (32 page)

Richard found
them a magnificent new home on East Sixtyfourth Street. They decided to live on
the forty-second floor of the New York Baron while their new home was being
decorated. William was enrolled at the fashionable Buckley school like his
father before him, while Annabel went to Spence.

Carol thought
perhaps the time had come to look for anotherjob, but even at the mention of
the subject, Annabel would burst into tears.

Florentyria
spent
every waking hour learning
from George how the
Baron Group was run. At the end of her first year as chairman, George Novak’s
private doubts about whether his kurn would have the toughness necessary to run
such a huge empire were entirely
allayed,
especially
after her stand in the South on equal pay for Baron Group employees whatever
their color.

“She has
inherited her father’s genius,” George told Richard. “All she lacks now is experience.”

“Time will take
care of that,” Richard predicted.

Richard made a
full report to the board on the state of the company after Florentyria’s first
year as chairman. The Group declared a profit of more than $27 million despite
a heavy worldwide building schedule and thedrop in the value of the dollar
against most trading currencies caused by the escalating war in Vietnam.
Richard then presented his ideas to the board for a comprehensive investment
program for the seventies. He ended his report by recommending that this kind
of program he looked into by a bank.

“Agreed,”
said
Florentyna, “but I still look upon you as a banker.”

“Don’t rcmind
me,” said Richard. “But with the turnover we now generate in more than fifty
currencies and the fees we pay to the inany financial institutions we employ,
perhaps the time has come for us to control our own bank.”

“Isn’t it nearly
impossible nowadays to buy a bank outright?” asked Florentyna.
“And almost as hard to fulfill the government requirements for a
license to run one?”

“Yes it is, but
we already own eight percent of Lester’s and we know what problems that created
for my father. This time let’s turn it to our advantage. What I’d like to
recommend to the board is...”

The
following day Richard wrote to Jake Thomas, the chairman of Lester’s, seeking a
private interview.
The letter he received in reply was guarded to the point of hostility. Their
secretaries agreed on a time and place for the meeting.

When Richard
entered the chairman’s office, Jake Thomas rose from behind his desk and
ushered him into a seat before returning to the leather chair that had been
occupied by Richard’s father for more than twenty years. The bookcases were
not as full nor
the flowers as fresh as Richard remembered.

The chairman’s
greeting was formal and short, but Richard was not cowed bv Thomas’s approach
as he knew that he was bargaining fri)m strength. There was no small talk.

“Mr. Thomas, I
feel that as I hold eight percent of Lester’s stock and have now moved to New
York, the time has come for me to take my rightful place on the board of the
bank.”

It was obvious
from Jake Thomas’s first words that he had anticipated what was on Richard’s
mind. “I think in normal circumstances that might have been a good idea, Mr.
Kane, but as the board has quite recently filled its last place perhaps the
alternative would be for you to sell your stock in the bank.”

It was exactly
the answer Richard had expected. “Under no circumstances would I pan with my
family shares, Mr. Thomas. My father built this bank up to be one of the most
respected financial institutions in America, and I intend to be closely
involved in its future.”

“That’s a pity,
Mr. Kane, because I am sure you are aware that your father did not leave the
bank in the happiest of circumstances and I feel certain we could have offered
you a reasonable price for your shares.”

“Better than the
price my father-in-law offered you for yours?” said Richard.

Jake Thomas’s
checks flushed brick-red. “I see you have ordy come here to be destructive,” he
said.

“I have often
found in the past that construction must be preceded by a little destruction,
Mr. Thomas.”

“I don’t think
you hold enough cards to make this house tumble,” the chairman retorted.

“No one knows
better than you that two percent may suffice,” said Richard.

“I can see no
point in prolonging this conversation, Mr. Kane.”

“For the time
being, I agree with you, but you can be sure that it will be continued in the
not too distant future,” said Richard.

He rose to
leave. Jake Thomas did not accept his outstretched hand.

“If that’s his
attitude, we must declare war,” said Florentyna.

“Brave words,”
said Richard, “but before we’make our next move I want to consult my father’s old
lawyer, Thaddeus Cohen. There’s nothing he doesn’t know about Lester’s. Perhaps
if we combine our ~nowledge we can come up with something.”

Florentyna
agreed. “George once told me something my father thought of doing if he failed
to remove your father even when he had eight percent.”

Richard listened
intently as Florentyna outlined her plan.

“Do you think
that might work in this case?” she asked her husband.

“We just might
pull it off, but it would be one hell of a risk.”

“We have nothing
to fear but fear
itself
,” said Florentyna.

“Jessie, when
will you learn that FDR was a politician, not a
banker.
”

Richard spent
most of the next four days locked in consultation with Thaddeus Cohen at the
city office of Cohen, Cohen, Yablons and Cohen.

“The only person
who now holds eight percent of Lester’s stock is you,” he assured Richard from
behind his desk. “Even Jake Thomas has only two percent. If your father had
known that Thomas could only afford to hold on to Abel Rosnovski’s stock for a
Jew days, he might well have called his bluff and held on to the chair.”

The old family
lawyer leaned back, placing both hands on top of his bald head.

“That piece of
information will make victory even sweeter,” said Richard.

“Do you have the
names of all the shareholders?”

“I’m still in
possession of the names of the registered stockholders at the time that your
father was the bank’s chief executive. But by now it may be so out-of-date as
to be rendered virtually useless. Nevertheless, as you well know, you are
entitled under state law to demand a formal inspection of the shareholders
list.”

“And I can
imagine how long Thomas would take to release that. “

“Around
Christmas,” said Thaddeus Cohen, allowing himself a thin smile.

“What do you
imagine would happen if I called an extraordinary meeting and gave a full
account of how Jake Thomas sold his own shares in order to remove my father
from the board?”

“You wouldn’t
gain a great deal from such an exercise apart from embarrassing a few people.
Jake Thomas would see to it that the meeting was held on an inconvenient day
and badly attended. He would also undoubtedly obtain a fifty percent proxy vote
against any resolution you put forward.

Into the bargain
I suspect Mr. Thomas would use such a move by you to rewash dirty linen in public,
which would only add a further stain to your father’s reputation. No, I think
Mrs. Kane has corne up with the best idea so far and, if I may be permitted to
say so, it is typical of her father’s boldness in such
matters
.

“But if we
should fail?”

“I am not a
betting man, but I’d back a Kane and Rosnovski against Jake Thomas any day.”

“If I agree,
what would you consider to be the most propitious time to launch the bid?”
asked Richard.

“April one,”
Thaddeus Cohen said unhesitatingly.

“Why
that
date in particular?”

“Because it’s
the right length of time before everyone has to file their tax returns to be
fairly certain that a number of people will be in need of some spare cash.”

Richard %Aent
over the detailed plan with Thaddeus Cohen again and that night he explained it
in full to Florentyna.

“How much do we
stand to lose if we fail?” was her first question.

“Roughly?”

“Roughly “

“Thirty-seven
million dollars.”

“That’s pretty
rough,” said Florentyna.

“We don’t exactly
lose the money, but all our capital will be locked up in Lester’s stock and
that would put a severe restriction ort the cash flow for the rest of the
Group, if we didn’t control the bank.”

“What does Mr.
Cohen think of our chances of pulling the coup off?”

“Better
than fifty-fifty.
My father would never have considered going ahead with such odds,” added
Richard.

“But my tather
would have,” said Florentyna. “He always considered it glass to be half full,
never half empty.”

“Thaddewi
Cohen was fight,” “About what?”

“About you
..
He warned me that if you were anything like your father,
prepare for battle.”

During the next
three months Richard spent most of his time with accountants, lawyers and tax
consultants, who had all the paperwork completed for him by March 20. That
afternoon be booked space on every major financial page in America for April I
and informed the advertising departments that the copy would arrive by hand
twenty-four hours prior to publication. He couldn’t help reflecting on the date
and wondered if it would be he or Jake Thomas who would end up the fool. During
the final two weeks, Richard and Thaddeus Cohen checked over the plan again and
again to be certain they hadn’t overlooked anything and could be confident that
the details of “Operation Bust a Gut” remained known to only three people.

On the morning
of Apffl 1, Richard sat in his office and studied the full-page advertisement
in The Wall Street Journal:

The Baron Group
announces that it will offer fourteen dollars for every Lester’s Bank share.
The current market value of Lester’s shares is eleven dollars and a quarter.
Any persons wishing to take advantage of this offer should contact their broker
or write direct for details to Mr. Robin Oakley, Chase Manhattan Bank, One
Chase Manhattan Plaza, New York,
N
. Y. 10005. This
offer remains open until July 15.

In his article
on the facing page, Vermont Royster pointed out that this bold bid to take over
Lester’s must have had the support of Chase Manhattan, which would be holding
the stock of the Baron Group as security.

The columnist
went on to predict that if the bid succeeded, Richard Kane would undoubtedly be
appointed the new chairman, a position his father had held for more than twenty
years. If, on the other hand, the move failed, the Baron Group might find
themselves
with severe cash restrictions placed on their
reserves for several years because the Group would be encumbered with a large
minority shareholding without actually controlling the bank.

Richard could
not have summed up the situation more accurately himself.

Florentyna
called Richard’s office to congratulate her husband on the way he had carried
out Operation Bust a Gut. “Like Napoleon, you have remembered that the first
rule of war is surprise.”

“Well, let’s
hope Jake Thomas is not my Waterloo.”

“You’re such a
pessimist, Mr. Kane. Just remember, Mr. Thomas is probably sitting in the
nearest men’s room at this moment and he doesn’t have a secret weapon and you
do.”

I do?” said
Richard.

“Yes. Me.” The
phone clicked and rang again immediately.

“Mr.
Thomas of Lester’s Bank on the line for you, Mr. Kane.”

The Present:
1968-1982 207

1 wonder if he
has a phone in the men’s room, thought Richard. “Put him through,” he said,
understanding for the first time a little of what the confrontation between his
father and Abel Rosnov,
,ki
must have been like.

“Mr. Kanc, I
thought we ought to see if we can sort out our differences.

Perhaps I was a
little overcautious in not offering you a place on the board immediately.”

“I’m no longer
interested in a place on the board, Mr. Thomas.”

“No? But f
thought-”

“No. I am now
interested only in the chair.”

“You do realize
that if you fail to secure fifty-one percent of Lester’s stock by July fifteenth,
we could institute immediate changes in the allocation of bearers’ stock and
voting shares that will diminish the value of the stock you already hold? And I
feel I should add that the members of the board already control between thern
forty percent of Lester’s stock, and I intend to contact all other shareholders
by telegram today with a recornmendation not to take up your offer. Once I am
in possession of another eleven percent, you will have lost a small fortune.”