It had been two years since the chairman of Gibraltar Financial hired Michael to turn the business around. Now the board that carelessly sanctioned the bad decisions over the two years before he was recruited expected him to work miracles overnight. Worse, they were beginning to try to shift the blame to Michael himself.
Michael knew he was becoming increasingly uncomfortable with the evolution of business over the last several years. Starting with the leveraged buyout movement through to today’s private equity and hedge fund craze, the world was changing, and not always for the better. Michael seemed to be able to function, albeit not always comfortably, with this strange new breed of financiers. He knew how they operated and what they expected. But Michael feared that they sensed his ambivalence toward their world and that his heart and passion were in building or rebuilding organizations—not stripping them out for short-term profits.
“Samantha, this speech tomorrow is high risk.” Michael felt he had to let Samantha know that it was possible the speech could be his swan song. “I don’t know how Dick or the rest of the board will react. I purposely didn’t allow Karen to circulate a copy of the speech. They’d all have a nervous breakdown if they saw it in advance. They’d never let me do it.” Michael proceeded to summarize the main points to Samantha.
“Michael,” Samantha said, “you can’t change the world. I know you don’t like the direction of all this merger and private equity and hedge fund world, but you can’t change it.”
Michael’s cell phone rang. “Karen, what are you doing this late? It’s ten o’clock for you.”
“I just want to be sure you’re all set for tomorrow. Did you get the FedEx with some mail and your speech?”
“Yes,” Michael replied softly into the phone, not wanting to disturb the other diners. “I’ve got it, and it looks perfect. Thanks for making the changes—and keeping it out of Dick’s hands.”
“Boss, the speech looks great, but I sure hope you know what you’re doing. This will be like a bomb going off to Dick and some of the board members. And you know that you’ve got to read it from your script. I would have had to give the marketing department the speech yesterday in order for it to be loaded onto a teleprompter. I can sure as hell see that we didn’t want to do that.”
“That’s okay. I’m not crazy about those teleprompters anyway,” Michael said. “I’ve practiced it enough so that I’m very comfortable with my delivery.”
“Also,” Karen said, “Mr. Applegarden wants to meet with you tomorrow before you go on. He’s going to call your room, so be ready. You’re supposed to be at the UCLA business auditorium at three.”
“I’ve got it. I’ll see Applegarden at some point before. I just want to keep it brief so we don’t get too deep into the details of the speech, and I’ve got to be sure we don’t meet too early so there’s no chance he can force me to rewrite or change anything.”
“Oh God, I’m glad I’m not going to be there. They’re all going to have a fit—although the press may love it.”
“You’re right on both points, Karen.”
“Yes, but remember, Boss, it’s the board that pays you. Not the press.”
“Karen, that’s why I love you. You’re just like Samantha. Always right.”
“I know. Good luck. Please call me when it’s over.”
Michael turned off the phone and looked at Samantha. She was not eating her salmon.
Chapter 37
Los Angeles, California
December 2, 2009
“M
ichael, God, it’s good to have you back. I know this has been tough for you.” Dick Applegarden had finally caught up with Michael. It was ten minutes before Michael was to step to the podium in front of a crowd of over two thousand reporters, executives, and business students. “Are you ready for this? I never actually got a copy of your speech, but nobody does this sort of thing better than you do.”
“Oh, I’m ready. Hopefully everyone is.” Michael knew that Dick Applegarden was uncomfortable around him.
“Anyway, we can get together later at the hotel. You’re just about to go on. Good luck. I trust you.” Michael knew that Dick Applegarden didn’t trust anyone.
Michael was dutifully introduced by the master of ceremonies, and he walked up the four steps to the stage and headed for the podium to a polite round of applause. He thanked the speaker who gave the introduction, took a deep breath, and gazed out at the audience hidden in the subdued light. As the applause from his introduction subsided, he began his speech.
“America has led the world in innovative business practices, but it has initiated a cancer, which, if allowed to grow unchecked and unregulated, will destroy the very fabric of our great industries. Hedge funds and private equity investors have mandated the relentless purchase and merging of companies, many of them industry leaders with long track records of success. These investors, driven by the need for fast, short-term gains, force the supposedly cost-efficient restructuring—or, as we so often call it, ‘right-sizing’ of these companies. We say it’s to make them more cost-efficient or competitive. But we all know we’re sacrificing long-term sustainability and competitiveness for a quick return, which can then be leveraged for a profitable sale of the organization.
“It has resulted in the destruction of hundreds of excellent companies and hundreds of thousands of American jobs. It has torn apart the bedrock of great organizations: the implied contract and trusting relationship between a business entity and its valued employees. Great companies are never run by accountants or consultants. How can we look at ourselves in the mirror when we strip out the more seasoned and talented employees—who happen to logically earn the most—in the name of so-called right-sizing?”
Michael tried to gauge the reaction of the audience as he looked up from his speech notes. It was difficult with such a large crowd sitting mostly in the dark. They seemed, however, to be listening intently and staring back at him with unusual focus and interest, at least for a business speech.
Energized, Michael continued. “Whatever happened to building a great product and a great company, investing in the future, having the patience to invest in research and development and in your people, even though the financial payoff may not come within the next quarter? Why are we allowing financial deal makers and traders to purchase our companies; pull out the equity built up over years; sell off the assets; eliminate its pension, health, and other employee benefits; load the business up with debt—and then sell it for a quick profit, crippled and loaded with debt payments, to another investor, while earning millions more in fees?”
Michael paused and made eye contact with Dick Applegarden sitting in the first row. Dick’s eyes were like lasers staring back at Michael. Michael glanced down at his notes and delivered his coup de grâce. “Our new business titans have become the financial technicians, or as I would affectionately call them, plumbers, who neither know nor care how to run a business or even understand the company’s products or services, but who are expert at the manipulation of the financial architecture of the organization. And, ladies and gentlemen, this financial architecture has become a sophisticated way to simply rape a company.”
Michael concluded with the outline of a solution. “I propose a new standard of regulation to limit the ability of corporate raiders to purchase a company, devalue that company, and then steal its assets—and a new leadership paradigm whereby CEOs are not only challenged with short-term financial performance, but long-term business growth and sustainability. Finally,” he concluded, “I fully expect my organization, Gibraltar Financial, to be a part of this new direction, and I will do everything to lead by example. Thank you.”
After a moment of shocked silence, a few brave souls in the audience applauded. Slowly, the few became many, and the room erupted in a spontaneous and exhilarating roar of applause—except for the stunned members of the Gibraltar’s board of directors surrounding Michael’s boss, Chairman Dick.
Michael waved and smiled to the appreciative audience, turned around, and stepped down the same steps he had walked up twenty minutes before. He then attempted to take his seat in the front row. But before he reached his seat, Dick Applegarden jumped up, took Michael firmly by the arm, and led him to the nearby hallway and exit.
“Are you fucking crazy, Michael? No wonder I never saw the fucking speech. What the hell is wrong with you? You just committed suicide, my friend.” Dick’s face was red and contorted. “The board will have your head. I’m not going to let you damage me with this disaster, but mark my words,
I will destroy you
.”
Chapter 38
Beverly Hills, California
December 2, 2009
I
t had not been a good day for Dick Applegarden.
Still in his forties, he was extraordinarily successful. Tall and wiry, with prematurely gray hair and wire-rimmed glasses, he looked more like an accountant than a chairman. Early in his career, he had toiled as a salesperson selling mortgage services to corporations for its employees, achieving success at a time when the real estate and mortgage markets were booming. As he rose up the executive ranks, he proved to be an adept political player in the big corporate world.
Dick was frequently critical of Michael, who was trying to fix the mess he had inherited. But Chairman Dick’s memory was short. In the frequently contentious board meetings, Michael was interrogated by Applegarden, who did not want to hear that the company he had purchased and that Michael now led was a godforsaken disaster needing a total and costly overhaul.
Dick needed a scapegoat to deflect attention away from his ill-conceived acquisition, and Michael’s explosive speech had just presented the perfect opportunity.
Now, nearly inebriated after an evening of scornful discussions in the Peninsula Hotel bar with Michael and the angry members of the board, Dick was in his suite and about to retire to his bedroom when he received a call from his own boss, Richard Perkins, the chairman of Gibraltar Financial’s parent company.
“Richard, I’ve got it under control. I have the agreement from our board members to remove Michael from his position. We just need to let a discreet period of time go by so it won’t look as if we fired him over this goddamned speech. In the meantime, I will make his life a living hell before I kick his ass out of here. Maybe we can get him to resign, and we won’t have to give him a severance package. When I’m done with him, he won’t know what hit him.”
Applegarden took the two Ambien he had earlier placed on the night table by his king-sized bed and washed them down with the remaining Bushmills single malt whiskey in the glass he had brought up from the bar.
Within five minutes he was sound asleep, lying on his back and snoring heavily, his mouth wide open.
At midnight, the power mysteriously went off throughout the Peninsula Hotel, shutting down the security cameras and casting the hallways in near darkness except for the glare of emergency lights placed at various positions.
Minutes later, two men in dark, well-tailored suits and ties, and one woman in a long black evening gown walked casually through the hotel lobby. They passed the bustling bar and two sets of doors until they approached the door to Suite 134, at which time they each put on gloves. They ignored the “Do Not Disturb” sign, expertly disabled the electronic lock on the door, and without making a sound or uttering a word, entered Dick Applegarden’s suite. They carefully closed the door behind them and stood inside, stopping briefly to adjust their eyes to the dark and to survey the room layout. The only noise was Applegarden’s tortured breathing and gasping coming from the open door of the bedroom.
One of the men nodded to the rest of the team, and they all entered the bedroom. They rushed to Applegarden’s bed and removed the covers over him, causing him to stir. For a second, he opened his eyes wide and appeared to try and raise his head from the pillow. He was able to utter only one word, “Who—” before the men held him down and pulled off his boxer shorts. The tall woman in the long black dress jabbed a needle into his upper thigh near his groin.
In the next moment, every muscle in his body went limp, and although his eyes were wide open and his mouth seemed to form a scream, he was silent and totally paralyzed.
As the others watched, one of the men placed a pillow over Applegarden’s face, leaving only his eyes exposed. “Don’t fight it,” he said. “Just go gently into the night and it won’t hurt a bit.” While holding down the pillow, the killer was careful not to bruise his immobilized victim. For two or three minutes, he watched as Applegarden continued to stare at him in uncomprehending disbelief. Finally, Applegarden’s eyes took on the unmistakable look of the dead.
The three then carefully put Applegarden’s boxer shorts back on his body and pulled the covers back to their original position. They opened two of the suite’s windows slightly. Then, one by one, each of them silently climbed out one of the windows and onto the isolated flagstone path outside, just a few feet below.
Applegarden’s body, neatly tucked back in under the covers, would be found the next afternoon when his fellow board members notified the hotel that he had not shown up for their meetings and that calls to his room and cell phone had gone unanswered. The coroner would attribute the death to a case of sleep apnea, whereby he stopped breathing in his sleep, aggravated by a combination of Ambien and the consumption of a large quantity of alcohol. There were no signs of a struggle on the body. There were no reports of suspicious people in the hotel around the time of death, and the door was securely locked and latched from the inside. The police believed that the deceased had opened two of the windows sometime before he went to bed to allow fresh air into the room.
Officially, Chairman Richard “Dick” Applegarden had died of “natural causes.”
Chapter 39
Queens Village, New York