“The brothers were involved in the financing?”
“Not directly. Ah-Pei would have had to approve the arrangement. I can only imagine that the brothers talked her into it, and besides, the Dutch company had a good track record. But Tambi and Mamat are the ones who had the relationship with the buyer. They’d meet him in Holland or at the factory two or three times a year to put together purchase orders. But — and this a big but — this past October, after we’d done our deal with Ah-Pei and Chi-Tze but before the brothers were officially out of the business, the two of them met with the Dutch buyer and negotiated a huge purchase order. The Dutch customer bought nearly all of the existing inventory and then ordered multiple containers of new products.”
“And the women didn’t find that odd?”
“I think they were too excited about getting rid of their brothers, and besides, as I said, they knew the Dutch company. Or at least they thought they did.”
“So Mamat and Tambi had the authority to commit the company to a deal that large?”
“They were still partners and officers in the company, but Ah-Pei’s signature was required as well. The problem is that she didn’t read the fine print until two weeks after the brothers were officially gone.”
“Fine print . . . Just how bad was the deal?”
“The terms were ridiculous. Net payment wasn’t due until forty-five days after the product actually arrived in the Netherlands. With thirty days thrown in for shipping, that meant it would be at least seventy-five days before any cash came back their way.”
“And we actually shipped that much product that quickly?”
“They cleaned out the inventory. In a few weeks they had packed and shipped all of it.”
“The women must have realized that their cash flow was going to be badly squeezed.”
“Yes, they knew it, so Chi-Tze called the Netherlands and explained that they needed payment more quickly. She went as far as to offer the Dutch a two percent discount if they could pay within ten days.”
“What did they say?”
“They said they’d get back to her. They didn’t. The sisters called again. No one at the firm would talk to them. A month later the sisters received a registered letter from a Dutch accounting firm telling them the importer had gone under and that they were listed as an unsecured creditor.”
“Unsecured?”
“Yes, and that’s not the worst of it,” May said, gazing at her martini glass. With a sigh she pushed it away from her. “I shouldn’t have ordered this. It doesn’t help.”
“How bad does this get?” Ava said.
“Well, after I heard from the women, I had my lawyer contact the accountants through a law firm he uses in the U.K. After a lot of back and forth between the U.K. and the Netherlands, the London lawyers informed mine that, under Dutch law, secured creditors are the only ones with real rights and with enough power to bypass the bankruptcy filing and seize the assets for themselves. And that’s exactly what’s happened. A secured creditor — a finance firm, evidently — has taken control of every liquid asset of the Dutch business. And that includes our furniture.”
“All of it?”
“All of it.”
“They’ll sell it.”
“Of course. They’re doing it already, as fast as they can. All they care about is the money they’re owed. The actual value of the furniture won’t mean a thing to them.”
“How much are the secured creditors owed?”
“According to the paperwork the trustee sent, about fifteen million euros — just over twenty million U.S.”
“And we invoiced the importer for more than thirty million dollars?”
“We did.”
“So they can discount the furniture and still come out well.”
“Especially when you factor in the normal wholesale markup. Chi-Tze says the Dutch importer would have sold the thirty million dollars’ worth of furniture for at least forty million.”
“So the secured creditor can sell it for half its wholesale value and still recover all of their money.”
“They can.”
“The bankruptcy trustee — the receiver, he can’t do anything about this?”
“He can monitor the sales — they do have to report them — and if they raise more than twenty million dollars he can make a claim on the excess and have it distributed among the other creditors, none of whom are secured.”
Ava paused. “Is there nothing we can do?”
“There’s a creditors’ meeting scheduled two days from now, on Tuesday, in Amsterdam. I thought I would meet with the sisters and then try to get over there to attend the meeting. I’d like to know who this finance company is and what kind of deal it had with the importer.”
“Do you suspect collusion between them?”
“I can suspect all I want, but I have no proof that Mamat and Tambi did some backdoor deal with the importer, or that the importer and his financer cut a separate deal, or that all three of them planned to screw us over. All I know is that it stinks. It’s just too quick and convenient for the company to go bankrupt while sitting on goods they haven’t paid for yet.”
“It sounds like a trip to the Netherlands is going to be necessary.”
“Yes.”
“But the schedule sounds way too tight. Can you meet with the sisters and still get there on time?”
May said slowly, “I’m not sure. I was actually thinking of asking you to go to Europe to represent us.” She glanced quickly at Ava and then turned away. “You’re the one who has the experience running things like this to ground, and you speak English far better than I do. But I know you’re reluctant to leave Uncle, and I’ll understand if it isn’t possible.”
Ava hesitated.
“I also wouldn’t blame you if you were having second thoughts about jumping into the business.”
Ava lowered her head and then shook it gently. “May, you’re misreading me. I’m just thinking about Uncle and his schedule. As for the money, I gave you my word. Nothing you’ve told me changes my commitment to the partnership.”
“It does from my end. I’m finding it difficult to expect you to put fifty million into the company and then lose a quarter of it the instant the ink is dry on the agreement.”
“I gave you my word.”
“And I’m giving you the chance to back out.”
“No, I’m not backing out on the business,” Ava said, sliding her hand across the table.
May took it and squeezed. “Thank you. I had to ask.”
“And now you’ve asked twice, so please don’t mention it again.”
“I won’t.”
“I also think I might be able to go to Amsterdam.”
“On such short notice? What about Uncle?”
“He and Sonny are off to Shanghai for three or four days, so I’m not needed here.”
“Uncle is okay to travel?”
“That’s what the doctor says.”
May smiled. “This is going much better than I had imagined.”
“It hasn’t solved our problem, though. Tell me, what do you intend to do about the sisters and the business? The two of them must be devastated, and how is the company staying afloat when its cash flow is so crippled?”
“Hopefully I can calm the sisters.”
“How about the business? Is it salvageable?”
“Maybe. We’ll have to put more money into it and I need to go over the terms with them. I also think we have to send Amanda there as soon as she comes back from her honeymoon. She’ll be a stabilizing influence for them, and truthfully I’ll feel more comfortable knowing she’s looking after our money — both the old and whatever new we have to put in.”
“I don’t think that will be a problem for her.”
“This investment wasn’t supposed to be a problem,” May said, and then shook her head. “Sorry, that’s my frustration about the situation talking. It’s not a criticism of Amanda.”
“I understand.”
“One other thing. I’ve asked the sisters to find the meanest, toughest lawyer they can get their hands on.”
“Why the lawyer?”
“I want to see if we have any grounds for suing the brothers.”
“Are you serious?”
“Absolutely.”
“You have no idea if they were involved in anything underhanded.”
“So?”
“All you have are suspicions.”
“That doesn’t mean we can’t sue anyway. We don’t need facts to make accusations, just a plausible story. Let’s see if we can scare some kind of reaction out of them. Who knows where that will lead?”
“I thought lawsuits in China took years to even surface.”
May, steadier now, sipped delicately at her martini. “Who said anything about China?”
“The business isn’t there?”
“No, it’s in Borneo.”
Ava didn’t disguise her surprise. “Borneo?”
“I had the same reaction when Amanda first told me the factories were located there, but when I went to meet the sisters for the first time, I had my eyes opened. The business is just outside Kota Kinabalu, the capital of Sabah province, and the area is much more sophisticated than I ever imagined.”
“It’s Malaysian territory, isn’t it?”
“Sabah is. The island is divided into three areas. The south side is Kalimantan and it’s Indonesian. The north coast has two Malaysian provinces, Sabah and Sarawak, and Sarawak surrounds the country of Brunei.”
“Borneo . . .” Ava said, shaking her head.
“Yes, and a Shangri-La five-star resort.”
“It’s never a holiday when you’re chasing money.”
“I guess I’m going to find that out.”
“Earlier you mentioned paperwork,” Ava said.
“I have it here,” May said, pointing to the brown envelope that sat under her handbag on the seat beside her.
“Let me see.”
May picked up the envelope and opened it. “Here — this is the bankruptcy notification, which includes the date, time, and location of the meeting,” she said, passing it to Ava.
Ava scanned it quickly.
“And this is a copy of the purchase agreement with the sisters, and a set of the company articles with you listed as an officer and director,” May said. “Finally, just in case you were able to go to Amsterdam, I had our lawyer prepare a notarized statement that you are authorized to act on behalf of the corporation on all matters relating to the bankruptcy.”
Ava smiled at May’s presumption.
“I thought I should have something prepared in case you could go. It was a precaution, that’s all. I wasn’t trying to predict what you would do,” May said.
“
Momentai
,” Ava said. “I’ll go over all of this later in detail. In the meantime, let’s eat.”
“Yes, before the martinis do me in.”
“I think it will take more than a couple of martinis to do that.”
Dim sum was normally a calm affair of sipping jasmine tea and picking at the small dishes brought to the table in a slow parade, but no sooner had they sat down than May’s cellphone rang. She answered it, her eyebrows immediately rising.
Chi-Tze
, May mouthed.
Before Ava could respond, her own cellphone sounded, showing an incoming call from the Queen Elizabeth Hospital. She answered quickly, a sinking feeling in her stomach.
“Ava, it is Uncle.”
“Are you okay?”
“Yes, yes. I am feeling better, but Parker will not let me out of here until later today or early tomorrow. He says that if I insist on travelling I will need more strength.”
“Thank God someone is being sensible.”
“I know better than to argue with him.”
“Do you want me to drop by?”
“No, there is no need today. Sonny will come and get me when I can leave.”
“And Shanghai?”
“Tomorrow, I would imagine.”
“Uncle,” Ava said slowly, “if you aren’t going to be in Hong Kong, then I may take a trip as well.”
“Of course, please go,” he said. “But tell me, does this have anything to do with the problem in Borneo?”
“I beg your pardon?” she said, her surprise audible.
He went silent and for a second Ava thought she had offended him. Then he asked, “Have you spoken to May Ling since the wedding?”
“She’s sitting right in front of me. Why do you ask?”
“Changxing.”
“What about him?”
“He called me an hour ago to see how I was doing. May had told him I was in the hospital. But what he really wanted was to tell me about a business problem in Borneo.”
May was still on the phone, and Ava could see she was agitated. Now Ava felt the first stirring of her own annoyance. “Why would he do that?” she asked.
“I do not know.”
“Well, it’s true, there is a problem, but it has nothing to do with him.”
“He said there is a lot of money involved and that you and May are exposed.”
“There is, and we are.”
“Can you sort things out?”
“Perhaps. May is getting ready to leave for Borneo and I’m going to fly to Amsterdam tonight if I can get a flight.”
“Ava, you do not have to tell me, but how much money could you personally lose?”
“Twelve to fifteen million U.S. dollars.”
“No wonder Changxing was eager to tell me.”
“I have the money.”
“Still . . .”
“Uncle, I’m fine,” she said.
“That may be, but I still worry about you and your future,” he said. “No matter, I spoke with Peter Hutchinson today after Changxing called. I know I have gone over the basics of my will with you, but I asked him to meet with you when you are available and lay out all the details and numbers. You will have no money problems, even if the loss is double what you think it is.”
“I know,” she said.
“So meet with him.”
“It isn’t necessary.”
“Do it for me. There are other provisions that I have not described, some involving Sonny and Lourdes. You need to be aware of them, and I would like to be able to answer any questions you may have.”
Ava knew she couldn’t say no. “I can’t do it until I get back from Amsterdam, so please don’t commit me to a date just yet,” she said. “But I’ll meet with him as soon as I return to Hong Kong.”
“Thank you.”
Ava looked across the table at May. She had ended her call and was now staring off into space.
“Uncle, I need to go now,” she said. “If there’s any change in your plans, please let me know. Otherwise I’ll be leaving for Amsterdam hopefully sometime today.”
“Say hello to May Ling for me, and have a safe journey.”
Ava put her phone on the table. “May, what happened? You look upset.”
“Chi-Tze called Amanda,” she said. “She phoned to tell Amanda I was coming over. She wanted to know what to expect.”
“Why would she do that?”
“She said she was nervous, she didn’t know what I was going to do. She thought I might even have plans to shutter the business.”
“This is the first day of Amanda’s honeymoon. Surely she knows that.”
“And the last, according to Chi-Tze.”
“What do you mean?”
“Amanda naturally asked why I was going and why Chi-Tze was asking about what to expect. So Chi-Tze told her about the problem.”
“God.”
“Amanda did not take it well.”
“Which part?”
“Both. She was shocked by the potential financial fallout and evidently none too pleased that I hadn’t told her about it.”
“The wedding —”
“Of course, and I have no doubt she will understand that’s why I didn’t say anything.”
“So what’s she going to do?”
“She plans to go to Borneo tomorrow.”
“That’s crazy.”
May Ling shrugged. “It speaks well of her as a partner, though.”
“May, you have to call Amanda and tell her to stay away.”
They halted their conversation when the food began to arrive. May picked up her chopsticks and plucked a steamed baby cuttlefish from its bed of curry sauce. “Chi-Tze told her exactly the same thing,” she said when the waiter had departed. “Amanda said she’d been living with Michael for a year and doubted there was anything new she would be learning on their honeymoon.”
“You seem okay with this,” Ava said.
“Not entirely, but I am pleased that Amanda takes her obligations to the business seriously.”
“Why would Chi-Tze open her mouth?”
“She is obviously distressed and not thinking very clearly.”
“When did they talk?”
“About half an hour ago.”
“Amanda hasn’t called either of us,” Ava said.
“She might need time to digest the situation. And we can’t be sure exactly how much detail Chi-Tze went into.”
“Amanda also might not want us to talk her out of going.”
Ava found her attention wavering as freshly fried turnip cakes stuffed with ham and onions arrived at the table. Then she thought about Amanda, and then of Changxing going behind their backs like a gossiping schoolboy, and her appetite disappeared. She thought about mentioning Uncle’s conversation with Changxing, but then thought better of it. There was no point in turning into a gossip herself.
“You have to call Amanda,” she said.
“I will.”
“No, now,” Ava said, picking up her phone and dialling Amanda’s mobile. She listened as it went directly to voicemail. “It’s Ava. Call me or May as soon as you can,” she said. Then she tried Michael’s phone. Same result. “They aren’t answering,” she said.
“And you aren’t eating,” May said.
“I can’t.”
“Me neither, actually,” May said, delicately placing her chopsticks on top of her bowl. “I think I need to get to Borneo as soon as I can.”