get the hang of the game. There was always more. He decided to raise the stakes using the Sandra card. “Franklin, everything sounds great, but Sandra’s reluctant. We’ve been living way over our heads for years, and she’s worried about taking too big a current cash flow hit for a promising future.”
How amusing, thought Franklin…the organizational virgin trying to best the master at poker. He decided to let Victor win this hand. “Ahhh, that’s an easy fix,” said Franklin. “We’ll bribe her! How about I give you a sign-on loan? Say $150,000 out of my pocket to cover your family’s incidental day-to-day expenses, take her to Grand Exuma, and bathe her in the sunshine. Allyn will draw up the agreement so that the loan is non-interest bearing, non-taxable, and to make it real easy, and you only have to repay me if and when you cash in some of the stock after it vests.”
Victor sensed another bluff might add to the pot. “Christ, that’s unbelievably generous of you. But it’s more than about money.”
“Awww, bullshit, it’s always about money! Let’s make it $250,000. That should also pay a few country club bills.”
“I’m leaning,” replied Victor. “I’ll outline the whole deal tonight to Sandra.”
“Leaning,” growled Franklin, “What the fuck does that mean? Maybe I’ve got the wrong guy. This deal is an opportunity for somebody with big balls. It isn’t for the faint of heart. I thought you were a savvy New York street kid?”
Franklin had touched Victor’s hot button. “I’m in. I’m in. Let me break it to Sandra in my way. And no public announcement until we clear the Securities and Exchange Commission.
“Trust me, you’ve made the right decision,” said Franklin.
Chapter 11
Early Warning Signs
On the way home from the train station, Victor made an unusual suggestion for a Wednesday night.
“Let’s grab a little dinner. Just you and me?”
Minutes later, they were in front of a crackling fire at Giovanni’s Steakhouse, a homey, local restaurant where the staff most of the patrons by name.
“Franklin called today,” said Victor sipping a glass of red wine.
“Oh,” said Sandra coyly.
“Franklin upped his incredibly generous offer. And, he threw in a $250,000 tax-free signing bonus.” Sandra’s eyes popped out of her head.
“I’d be the first to admit I don’t know the guy very well, but you have to agree it does sound exciting,” pitched Victor. “The sign-on bonus means no more juggling credit card balances. I might even be able to install that all-weather putting green I’ve dreamed about.”
“Why do you get a putting green?”
“Well, baby, what’s on your wish list? You’ve earned it after all these years.”
Sandra smiled a tad mischievously. “I was thinking of a clay tennis court that will cut our country club expenses in half.”
“That’s my girl, the opulent pragmatist.”
“Speaking of pragmatism, How about running the proposition by Jim Badino before we take the plunge?”
“Why Jim?”
“He’s a C.P.A. and your closest friend in the whole world, isn’t he?”
(Jim Badino and Victor had known each other since high school. Badino met his wife on a blind date, arranged by Sandra, with her creative, slightly kooky girlfriend Fran. Jim and Fran were married a year after Victor and Sandra in the same church.
Badino’s business career, however, had taken a completely different course than Victor’s. The more conservative Badino loved statistics and interned at the then prestigious accounting firm Arthur Andersen and Company. After college, he took an entry-level position with the firm and was now one of their youngest managing partners. His primary area of expertise was auditing and providing advice to many of the firm’s larger public companies. In short, he was considered an expert in SEC rules and regulations.
~
Badino listened patiently as Victor painted a picture of the Ryman opportunity over an aged New York strip steak and a glass of zinfandel at their favorite steakhouse across the Williamsburg Bridge, Peter Luger’s. “So, what do you think, oh, wise one?” smiled Victor.
“Like always, the steak is perfect,” teased Badino.
“I’m picking up this outrageously expensive lunch because Sandra trusts you more than me. Sometimes I wonder if we got the wives mixed up. You know, part of Sandra loves boring!”
Badino smiled. He placed his hand under his chin and rubbed his cheek. Did Victor want to hear what he had to say? “Victor, I don’t know about the business concept. So I have to assume for the moment there is a barter trading business that could potentially be consolidated. But the idea of funding a major enterprise through the penny stock market feels more like a bunch of guys who want to bilk the public for their account.
“I did a little research on Ryman. His specialty seems to be operating on the fringe of Wall Street. He’s made and pissed away fortunes and left a lot of people in his wake. Everything I’ve read suggests his favorite color is green. You better be careful here,” counseled Badino. “Since Madoff and the others, the SEC is looking for Ponzi schemes.”
“ITI isn’t a Ponzi scheme.”
“No and yes,” said the sanguine friend. “You’re not planning on using other people’s money to pay early investors, but you are projecting future earnings based on restated financial results that may or may not hold up in future integrated operations. The degree to which people believe your numbers are directly related to the level of confidence you project. Investors want to invest in people they believe they can trust. Particularly in this day and age.”
“Thank you, Pope Badino. Any other words of wisdom?”
“As a matter of fact, yes. Why do you have to rely exclusively on acquisitions?”
“Franklin says it’s the fastest way to show earnings, and that’s what the Street is buying these days.”
“I’m guessing your partner isn’t trying to build an enduring business. I looked him up on the internet. Given his history, I’m guessing he plans to build a sexy earnings story then cash out as unsuspecting mainstream investors place their bets.”
“Jim, with all due respect, it’s one thing to read about someone on the internet; it’s another to make a value judgment after meeting them up close and personal.”
“Agreed,” responded Badino.
“I’ve done that. I think the guy can get me where I want to go.”
“At what cost?” said Badino.
~
That evening Victor gave his version of the lunch to Sandra. “Jim,” says we’re good to go, and Franklin has invited us for drinks
