I Love Capitalism! by Ken Langone

Author:Ken Langone
Language: eng
Format: epub
Publisher: Penguin Publishing Group
Published: 2018-05-15T04:00:00+00:00

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One day about a month later, Sigoloff phoned me. One of his henchmen, a Daylin senior VP by the name of Jeff Chanin, was going to be in New York; Sandy said Chanin wanted to stop by and see me. It didn’t sound like a friendly meet and greet to me. I phoned Joe Flom, the merger-and-acquisitions king at Skadden, Arps—he and his firm were known to be scrappy fighters—and said, “Joe, I don’t know if I’m going to need a lawyer. But if I do, I want you to have the meanest, toughest SOB you’ve got standing by.”

“I’ve got just the guy,” Joe said. “Bob Pirie.”

On the appointed day, this Jeff Chanin walks into my office, takes off his jacket, and immediately starts making threats. He’s a lawyer, it turns out, and a thug. He tells me Sigoloff is taking Handy Dan private again, and my investors and I are going to have to sell out—no ifs, ands, or buts. And if we don’t agree, Chanin says, he and Sigoloff are going to squeeze us out with something called a cram down, a legal way of forcing out minority stockholders.

I knew exactly what a cram down was. If minority stockholders owned less than 10 percent of a company, the majority stockholder had the right to get an independent appraisal and force the minority owners to sell at that price. But a cram down required that the crammer control 90 percent or more of the stock in question. Sigoloff was bluffing.

“Jeff, cut the crap,” I said. “I control enough stock that you can’t do any such thing. If you’re here to threaten me, you’ve got the wrong guy. Excuse me.”

And I stepped out of the office and phoned Bob Pirie.

Pirie came over in a few minutes. He was a story in himself—one of the smartest, most combative merger-and-acquisitions lawyers ever to walk the earth. Talk about bringing a gun to a knife fight. Suddenly Sigoloff’s thug realizes he’s in for it, but he gives it his best shot. At this point, Handy Dan was trading at about $8 a share. “You can’t sell your stock; you’ve got no liquidity,” Chanin tells me, all fake magnanimous. Meaning, because between Daylin, the Redemptorists, and me, 100 percent of Handy Dan’s stock was off the market, no one was promoting it or doing research on it, therefore there was no one to buy. “You can’t sell,” Chanin repeated. “But we’ll pay you $10 a share.”

“Make it twelve and you’ve got a deal,” I tell him.

“Forget it!” Chanin yells.

I go to stretch my legs while Chanin and Pirie hash it out. When I come back to my office, Chanin says, “Okay, I’ll pay you $12 a share.”

“Jeff, that offer is off the table,” I tell him. “I said twelve and you said no.”

“What?” he said. “Now I’m saying yes.”

“Off the table,” I said. “I want fourteen a share.”

“Forget it,” Chanin said. “I’m not paying $14 a share.”

“Okay,” I said. “Good-bye.”

I went to the bathroom, leaving my guy to rough up Sigoloff’s guy a little more.

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