Casey's Law by Al Casey

Author:Al Casey
Language: eng
Format: epub
Publisher: Arcade
Published: 2011-03-06T16:00:00+00:00

If you’re lucky in life, there are times of need when opportunities, however seemingly crazy, appear as if by magic. One morning only a week or so after I had arrived at American, I read in the Wall Street Journal that Republic National Bank of Dallas was offering to sell an oil company it owned, the Howard Corporation, to the highest bidder. Since Jim Aston, Republic’s CEO, was on the American board, I donned my poker-player hat and decided to call him. Oil was fuel, and fuel was one of American’s most desperate needs. I did a little checking on Howard and learned that it was the holder of proven oil-producing properties. I also learned that Republic “owned” Howard because Howard had defaulted on a loan back in the 1920s, and since then Republic had put many nonperforming oil loans in Howard and made it a property of its holding company and not of the bank. In recent years, the loans had come into their own. However, the Controller of Currency had determined that the Howard Corporation did not qualify as a “bank-line” business, and therefore forced Republic to divest it. I put in my call to Aston.

“Jim, I’ve just heard about your selling Howard,” I began.

“That’s correct, Al,” he said. “You must have read today’s Wall Street Journal.”

“Jim, you can’t sell that company to just anyone,” I said. “You first have to offer it to companies whose board you’re on. You’ve got to give those companies that corporate opportunity.”

There was a long pause on the other end. I was used to long pauses, so his didn’t surprise me.

“Al,” Aston said finally, “I’ve never heard of such a thing.”

“Well, then, why don’t you check with your general counsel and call me back.”

While awaiting his call, I speculated further about the short-and long-term benefits of acquiring Howard, which could be an ideal fuel-price hedge for American. Given the OPEC embargo, and still soaring gas and jet fuel prices, there was no telling how high fuel costs would go in the next few years.

My secretary, Libby Scott, announced that Jim Aston was on the phone.

“Al,” he said, “I’ve spoken to our general counsel and he doesn’t know what you’re talking about. And he seriously doubts you do either.”

“Be that as it may,” I said, “here’s what I propose. Go ahead and open bids for Howard. And when you have your most favorable bid, come to me and we’ll match it without knowing what it is, and improve it.”

And that is exactly what happened. I matched the top bid, which was $63 million, then told Jim that in return for his “favor” I was going to offer him a unique “come-back-in.”

“What’s that, Al?” he asked, a bit suspiciously, I thought.

“After American has recovered its sixty-three-million-dollar investment, plus a ten percent return per annum for the period the purchase price was invested, we’ll have the property evaluated. Then we’ll pay an additional amount equal to one-half of the agreed-upon extra value.”

“Go on,” he said, clearly intrigued but still, I suspected, a trifle suspicious.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.