Chapter 8—Seeking the Eye of the Hurricane
Frank sat back in his office chair. He was waiting for a call from Jim Sweeney and he deserved a few moments' relaxation. The financing package for the R&D program was nearly put together; the forecast was done, and held together well. Soon, he would be able to call Jason Lowell into his office and let him in on it. Until it was a done, he had to keep things strictly confidential. "Maybe, when I tell him about the funding we can kiss and make up," he thought to himself. He knew that Alvin had issued Jason a pretty harsh verbal flogging, based largely on what Frank had told him, but Jason richly deserved it.
"At this level, the boss shouldn't have to scold Vice-Presidents like schoolboys." Maybe Jason would be different after this—the kind of executive everyone expected him to be.
The intercom buzzed. "Mr. Sweeney is on the line," Jeannette's soft voice told him.
Frank picked up the phone.
Frank: "Hello Jim, Frank here."
Sweeney: "Hey, Frank! How's that sexy secretary of yours?"
Frank: "Just as sexy as ever. I'd like to fill you in on the financing arrangements for the R&D program."
Sweeney: "Just what I was hoping to hear. I'm all ears.
Frank: "I think it's not a bad package. It'll be prime-minus-one; laddered debentures with principal payments starting in three years with maturities in stages over the next seven years after that."
Sweeney: "How much is the package worth?"
Frank: "Four hundred million. We draw on it as we need it. They'll hold the commitment open for three years."
Sweeney: "Who're we doin' business with on this, Frank?"
Frank: "Chase-Morgan is the lead. We deal with them. I think they're planning to lay off part of it—maybe to insurance companies."
Sweeney: "Sounds too good to be true. What am I missing here?"
Frank: "They want a mortgage on the new R&D facility and security interests on any patents. They also want some offsetting deposits. That will tie us up somewhat, in case we want to do a sale and lease-back of the property, or license the patents."
Sweeney: "I see your point."
Frank: "I'm working on these details now. We might have to start that way and then renegotiate something later. All-in-all, I think it's the best deal available to us."
Sweeney: "And it cuts out the Wertheim deal!"
Frank: "Not necessarily, but it does de-link the R&D program from Wertheim. They should never have been jammed together in the first place."
Sweeney: "That was Mueller's and Lambert's doing."
Frank: "Alvin asked me to tell you that he's on board with this."
Sweeney: "I couldn't be happier, Frank. When's the closing date?
Frank: "We're just waiting for the SEC to pass on the 10-Q and for our forecast, which looks good. It shouldn't be long."
Sweeney: "Keep me posted. Now I've got to run—plane to catch."
Frank: "Have a good flight."
Frank hung up the phone and left his office to refill his coffee cup. Jeannette saw him and reached out to take his cup from him.
"That's okay, Jeannette; I've got it." He went to the coffee pot hidden in the corner and poured some into his cup. "Jim Sweeney says 'hello'."
"Mr. Sweeney is very charming," Jeannette replied. "I think he enjoys flirting with the secretaries."
"Maybe not all the secretaries, but you're definitely on his A-list."
"Me—how did I get there? I definitely didn't ask to be put on it."
"I think Jim is a guy who appreciates the finer things," Frank said.
"I'll take that as a compliment."
"I would," Frank answered. "Not to change the subject, but..."
"Go right ahead and change the subject, Frank."
"I was wondering if you're planning to go to that pool party Gloria Warner is putting on."
"I was assuming that there would be too much work to do," Jeannette replied. "Most of the girls are all excited over it."
"But, you're not?"
"I've heard the Warners have a pretty nice place. I'm not sure what else is in store."
"Confidentially, they're going to twist your arm to volunteer to give them some free help on the charity foundation."
"I suspected something like that. Is Trudy in on this?"
"In a way," Frank said. "They tried to dump all the clerical work on her and she said that she wouldn't do it alone. She thought that Gloria and the other wives would pitch in, but Gloria came up with this idea, instead. Whether you decide to help them is strictly up to you. For that matter, you can attend or not as you please."
"I'll think about it."
"Why don't you go? Gloria's bound to put out a first-class spread, and you've sure earned an extra day off. Just be sure not to get roped into something that you don't want to do."
"I'll remember that," Jeannette promised.
"Or, I could find a project for you so you would have an excuse," Frank offered.
"Hey Frank, wait up—I need to speak with you." Frank recognized Tyler Smith's voice. He turned and saw Tyler marching toward him wearing a stern expression.
"C'mon in; get yourself a coffee," Frank said.
Tyler was right on Frank's heels, ignoring the offer of coffee, as they disappeared behind the office door.
"I take it you haven't heard," Tyler said as they made their way to Frank's desk.
"Heard what?"
"Get on the internet. Take a look at our stock price," Tyler replied.
Frank turned to his computer and logged in. As soon as he was on the stock quotations page he typed in WC, the ticker symbol for Western Chemical.
"Geez, what do you make of it, Tyler?"
"You don't know the half of it," Tyler warned.
Frank wasn't sure he wanted to know more. Western Chemical stock, which closed at forty-eight dollars the day before, had fallen to thirty-three. Trading in Western stock had been halted by the exchange.
"What's the other half?" Frank asked.
"Short interest tripled at the opening bell. There's been very large trading in out-of-the- money put options. At least they were out-of--the-money at the opening bell. It's triggered a tremendous sell-off."
