Saturday - October 17, 2009

Conclusion … A TALE OF TWO FAMILIES …….

Conclusion:

A TRUE TALE OF TWO FAMILIES and a totally unbelievable coincidence.  Except to the ones who have the experience.

“G R E A T E X P E C T A T I O N S” Charles Dickens

“GREAT DISSAPOINTMENTS” US

After fifty years of work and building a solid reputation in the business world, Poof. Gone with the ocean breeze. See what happens when you send your son to college and he becomes a lawyer?  (my feeble attempt at humor)

So back home from the war my uncle joined and headed the family business, expanded it and started a family of his own.  His new bride was a tall and very beautiful willowy blond with the brains to match her extraordinary looks. She had besides what I can only describe as the most seductive speaking voice I have ever heard.  To my ear, it was a soft and soothing voice.  One of the very few family members I actually liked.

They had four children and that’s important to note. Three daughters and a son. A son who would one day grow up to become a lawyer and threaten his father with a law suit, and be a principle in bringing down the family business.

It would be entirely correct to state that our family business and fortune had it’s days numbered from the day of my cousin’s birth.

My mother worked very hard through the years that her brother (the youngest of her siblings) was in school, then college and then four years in the military.  If the business grew and things got better because of my uncle’s brain and education, it’s fair to say that the business was also propped up on her strong shoulders and back.

In the early years, when the police would call to notify us that the store alarm had gone off and needed shutting, it was always my mom who got the call and had to get dressed at whatever hour, then drive across town to shut off the darn thing.

Then as well there other late calls. Calls to our house from some special client/customer hours after the store had closed for the night. Funny thing that.  They always called our house.  Again my mother would have to go across town to open the store for a client who had to have 50 or 100 yards of some material to finish off a commercial project.  At say a dollar a yard for 100 yards, that was a big sale in those days and couldn’t be ignored. But no matter how nice or how apologetic, I hated the person we had to sell to so late.  If I leave the impression that it happened often, that would not be right. It didn’t.  But even once was one too many for me, as there were times later on when I had to go too.  One time our front show window had been broken. Glass everywhere. Went with the territory in those days but thankfully that window episode was only once.

Today at age 72, I HATE the sound of a phone late at night. As soon as I hear it, I resent it.

As stated earlier, my mother was quite content with the status quo. Things were working out well, business was good and appeared to be getting better.  We had a sewing facility upstairs over the store where custom drapes and slipcovers were made, the seamstresses were wonderful and all Canadian or of French/Canadian origin. Yes, they were all legal.  We had a fair sized work force in those days.  I had an awful crush on one of their teen daughters named Fern.  Funny how I remember after all these years. Nothing was allowed to come of that however.

My mother didn’t want to move in the same direction as my uncle. For his part, standing still was death itself.  You could not sit still while the world was spinning. People and business had to expand and keep moving, always moving.  And illness was never an excuse with my uncle to be out of work.  You could only be excused from work if you died and were able to prove it.

And finally my grandfather did, although he was retired by then.

With his passing and the controlling interest of the business firmly in my uncle’s capable hands, things not only changed.  They changed quickly.

I have already mentioned our entry into the discount store chains all across the country.  Well, perhaps the single most important change was one my mother fought but couldn’t overcome with her 49% share.  It was not a war she could win.

My uncle took the company public.
I think our stock opened at around $17.50 a share.  Penny ante compared to stock prices during our late lamented tech bubble.  (I’m still waiting for it’s return)
But not bad at all back around 1969 or 1970.

The ex governor’s law practice was one of our business and personal legal representatives. And a family friend.  Over the years my uncle’s circle of friends expanded to include various politicos including senators. You might say he hobnobbed with the rich and famous.  He even had a private audience with the Pope.  He’s had his photo taken with at least two presidents.  In addition to all else, it’s my understanding he was sent on a fact finding mission for the govt.  My guess would be the mid east but I don’t know. I just know for a fact he was asked to go somewhere for the govt. and he did.  I’m certain though it was Israel. 

During all of this, mom was a thorn in his side and I tended to question my mother’s judgment.  After all – but for him the business would never have grown the way it did.  He had to know something she didn’t.  She finished high school, he finished college and was a flier in the late war and I was in awe of him.

But she complained that he was moving too far too fast and not giving things a chance to settle down.  From his viewpoint, to slow down didn’t infer settle down. It meant sinking.  You kept moving or you sank. Period!

Eventually our corporate headquarters were moved to So. Calif. where much of the business interest was, in addition to the fact that my uncle loved the area and wanted to live most of the year there.  And so he did, but he still maintained a million dollar home right smack on the beach front in Ct.
My aunt and uncle would spend several months a year there.  Hey … he earned it. Nobody handed it to him.

After a few years the corp. moved yet again, this time into their own large and new bldg. and, we even had our own warehouses. 
I say “we” but for my tiny part, I only worked for the corporation a short time although I did manage at least three domestic departments in the chain over the few years I was there.
It was also there that I came to utterly despise unions with a passion to this day.  I was forced to join the union when I went to California to work in our outlets there.  Does that draw a corrupt picture for anyone?
Why would the son and nephew of the owners need a union to represent him to his own mother and uncle?  And that isn’t all.  This union represented the whole store.
That meant of course the shoe dept, the electronics, men’s and ladies cloths, sports dept. and of course domestics.  The reason I mention all these different departments is because, the miserable corrupt union that represented the store was ,,,,

THE INTERNATIONAL LADIES GARMENT WORKERS UNION

Yup, they also represented the Electronics Dept. which of course included anything from TVs to electric guitars. And the shoe dept. It was a union that got it’s teeth attached to everything there.  And what grief they gave me when I tried to get a raise for one of my people who I felt damn well deserved it.  I committed the high crime of going to our head office with the request instead of clearing it through those slimy, commie thieves in that sweetheart union.  Corrupt evil bastards . I hope they’re all dead today. 

My last year with the company was improved somewhat after being transferred to a non union state. Tucson, Arizona.  I liked it there but missed Calif.  I wanted to get back there and really needed to get back to school and into radio. My first and most enduring passion till I met my wife.  I believe it was around that time as well that he took the company public.

So … I left the company and thought I was at last free of the business (I really owed so much to).  But the corporation wasn’t quite finished with me.  I just didn’t know that at the time.

I know this is long, but there are things that need explaining before I work my way to the finale.
There are some things I have edited out of this story but it is important to know that while I may not have felt comfortable in a business world, that did not mean I was not intensely loyal to my uncle and to the company.  But it turned out to be a one way street.  I too often defended my uncle much to my mother’s frustration. Not that my defense was needed nor was it asked for.

I can never be certain of the exact point in time but somewhere along the line, I think company greed set in.  Not only that, but a bit of snobbery as well.
My uncle and by now his son, my cousin , were opening stores I promise the reader only the very rich could afford to shop in.  Wish I had photos of some of those showplaces. Maybe Palace is a better word.  These were really fancy stores with artwork and statuary and all kinds of imported “things.” I once wrote the company a letter saying how nice the stores appeared but thought that since there were more poor and middle class folks then the class who could afford these stores, they were limiting their field. I believe I wrote the letter after getting the quarterly report. And oh boy was that thing an expensive four color separation project of immense size.  I was offered a 10 percent discount should I ever want to shop in those stores.  Who-Haa. Such a deal!  That was a laugh.  As my wife says, every time people get too far away from their roots, they court disaster!  And that was just waiting in the wings.  It was still a few years away, but it was watching.

H U M P T Y D U M P T Y H A S A G R E A T F A L L

It never occurred to me and I never asked about stock shares.  I had none and am sorry to say I didn’t have the cash to buy any on my own and in any event, at that time things like stock shares were a foreign language to me.  It also never occurred to me that my mother would have a huge block of stock in the company.
Like, 120,000 shares of stock.  That made her a major shareholder.  40,000 shares of which were voting shares.  Or B shares.  I should explain the difference for those who aren’t aware of this.

If a company is in a buyout or going bust, the ‘B’ shares are ALWAYS the first to be redeemed.  If all you’re holding are the ‘A’ shares, they could become worthless especially if the company has to make payouts.  The ‘Bs’ get paid first.
But … the ‘A’s pay higher dividends.  It is important to this story that you know that.

Before my mother died in 1978, my uncle persuaded her to make a slight change in her will that would tie our hands for nine years.  I would receive interest from her estate but not be given control over the stock shares until I reached age 50.

This was so my uncle could be certain there was no interference in the running of HIS company.  As well, he was concerned that I should not be in a position to sell shares of company stock on the open market.  When an insider sells stock in a company, it doesn’t have to be due to bad news.  Maybe someone just needs cash.  Here’s an example true to life because it was mine and of course my wife’s as well.

There was a small plot of land that fronted music row in Nashville,Tn. and it was for sale.  At the very same time we were looking at houses after living in a mobile home for years.  It came down to a choice between the two. An empty lot on music row or a house in Franklin, Tn. We bought the house.  Had we been in a position to access the money, we could have bought both the house and the lot. Eventually a three story office building with underground parking was built on that lot.  boo-hoo.  That little tiny bit of land became worth multiple millions of dollars only a few years later.

Loyalty obliged me to sell stock ONLY back to the company once it came into my possession.  My uncle always insisted that the sale price had to be based on the average of the last ten days trading price.  He said it couldn’t be done any other way.  The wife, who reads the financial pages and understands them, pointed out that in one of the company reports, when my cousin divorced his second wife, she was given $5.25 per share in a payout, at a time when the stock was only trading at $3.25 per share.  I never questioned my uncle about this although my wife was vividly angry. And that’s putting it mildly.

During all the time the stock shares were held in trust, the stock price was falling steadily.  But I paid no attention.  At the point we did come into possession, my wife wanted to dump the shares. The very thing uncle worried about.  But I refused out of loyalty, and in spite of falling share price, felt that to sell would be seen as a lack of faith in my uncle and his company. 

Quite honestly though, the business had kept us in some comfort and looked after the entire family for years.  There was no reason to question anything and I didn’t.  It had also been drilled into some of us, that if shares must be sold, then sell only to family. That is, sell direct back to the company.

There had been a group of lawyers in Chicago who were buying shares and had a keen eye out for any shares with the intent to make a run on the company.

When we lived in Riverside, Ca., for the first time in our marriage we got an invitation to lunch at my uncle’s home in Irvine, Ca.  I remember expressing some small concern with regard to the share price and wondered what was happening to the dividends.  He made the suggestion that we might want to consider trading our ‘B’ shares (the voting shares) for the same number of ‘A’ shares as we’d receive a bit more in dividends.  We thought it was a good idea especially as I never voted anyway, and if I did it was always with the company and never against.  So, we agreed not being aware as he surely must have been, of the true state of the company.  I never questioned his motives for suggesting this plan, although my wife always believed and still does, that the reason for the invite was simply to get his hands on the voting shares.  Even today I’m not wholly convinced he was totally aware, considering what his son was doing behind the scenes.  So in the end, we agreed to his plan.

Six months later the dividend payments were cut in half, and shortly after that they were discontinued entirely. 

AND THE WALLS COME A TUMBLIN’ DOWN

To end my part of this story, my cousin and his partners made an end run around his father, forcing his dad off the company board.  He also had him locked out of his office.  When my uncle accused his son of skulduggery, he was threatened with a law suit.

At that point he (cousin) and his partners sold all the assets ( stores and warehouses worth many millions ) at less then market value to realize quick money.  It forced the closing of the company and finally into bankruptcy. It left my uncle who did have a sterling reputation in the business world, with a lot of bad debt and no cash to settle them.

In the late 90’s, possibly 98 or 99 we finally sold out our remaining shares at 25 cents a share.  I really don’t even remember how many shares we had left as we did sell off quite a bit to the company in yrs past.
THANKS A LOT FOR THAT ....

Cousin STANLEY!

FINALE and THE COINCIDENCE

Well we’re about at the end and this is brief and is the wife’s tale.

My wife’s father persuaded his father, to make his will so that his money would be divided equally amongst his eight children. Four boys and four girls.

The youngest boy was her Uncle Red. So called because he had copper colored hair.

But, when her father died in 1956, Uncle Red suggested that he should come and help Grandpa with his various business interests, of which there were many.  Very soon Uncle Red was running everything.  At this point he suggested to Grandpa, that he change his will.  The remaining boys would divide the money, and the girls would get the contents of his house.  After all, they all had husbands!!  And girls didn’t need cash. 

The grandchildren were each given a nominal sum, leaving my wife’s mother with exactly NOTHING!  The reason given was that she had only married into the family and wasn’t actually part of it as in a blood relation.

So Uncle Red reasoned that she was not entitled to any money.  Of course Red wasn’t his given name.

THANKS A LOT FOR THAT,

Uncle STANLEY !

end

Postscript about coincidences. My wife’s family was all Church of England. Not a Jewish person among em.
But for reasons never ever explained, one uncle to his dying day received a state pension from the state of Israel for services of some kind.  The services were never explained or referred to or questioned. 

Posted by peiper     on 10/17/2009 at 06:34 AM   
Filed Under: • Miscellaneous •  
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