“How important is this to you?”
“Pretty important. They are some of my oldest friends. We go back to high school together. He was one of my groomsmen and she damn near gave birth at the reception!”
That earned a grin from Jake. “That must have been fun!”
“Like you have no idea!” I laughed.
“Okay, here’s what I see is happening. The bank is looking for collateral, in case these two go belly up.” I nodded, and he continued, “For instance, if they get a dealership, the factory probably has the title to the bikes, or the bank that does the floorplan, which might be through the factory anyway. You understand floorplanning?”
Oh, Lord, yes, I understood it. Trailers have it, too. I nodded. “Marilyn’s family sells trailers. Same deal there.”
“So what happens if they default? The bank is stuck with an old commercial building and a bunch of rebuilt used bikes. Since your friends have no equity in the deal, they don’t have any skin in the game.”
“Any ideas?” I asked.
He grinned at me. “This is where we can do some things as the Buckman Group. For instance, any work I or the others do is absorbed as our cost. Currently, they are billable hours to you.”
“I had figured that part out already,” I said drily.
“Would it be okay to call them, ask them a few questions? I’ve got a few ideas in mind.”
I shrugged. “Fine by me. Let me use your phone and I’ll call them, let them know what’s happening.” I reached across his desk and picked up the phone, and Jake pushed a 9 to get an outside line. I made a quick call to Tessa and simply told her that a fellow named Jake Eisenstein was going to call them later, and that he was my accountant and had a few questions for them. Then I left him with their paperwork from Maryland National, and told him to use my name if he needed to call the bank directly.
The following week, I got a call from Jake. “You still want to help your friends?”
“Sure thing.”
“Okay, be at my office next Wednesday at 1:00. I’ll let them know to give a check to Andrea in the meantime. I’ve got John doing due diligence now on them.”
“Really? How’s it going to work?” I asked.
“I’ll explain it next Wednesday.” He hung up, leaving me mystified but hopeful.
I called Tusker and he wasn’t completely sure either, but he did indicate that Jake had asked them if they would be willing to have me as a minority owner, at a 10 % level. They had both said yes, which made me think I was providing some guarantees, using my credit in place of theirs.
The following Wednesday, after lunch, I drove over to Jake’s office. I met Tusker and Tessa in the parking lot and I could tell that Tusker was nervous, being a long haired biker type meeting with businessmen. I told him to calm down, he’d be fine. Tessa had on a business suit, and Tusker was scrubbed free of all petroleum products, and had a suit on also. We went inside to find the entire brain trust inside I introduced them to Jake, Jake Junior, Melissa, and John. “I wasn’t expecting everybody to be involved,” I commented.
John answered, “If we are doing this, we all need to be in the loop. Jake ran some of the numbers. I was in touch with Andrea, the seller, and Maryland National.”
I nodded. “Jake Junior is setting up the paperwork and legal documentation I guess.” He nodded in agreement, and I turned to face Melissa. “And you?”
“I ran numbers for John. It’s been fascinating!”
“And we have a plan in place?”
“We do!” answered Jake Junior. He extended a hand to his father, who began the explanation.
Basically, I would invest $50,000 in Tusk Cycle in exchange for 10 % of the business. This valued the firm at half a million, which was ludicrous, but that was discounting the value of the work that Tusker and Tessa were doing. I was never going to actually work there. Further, I would keep an interest bearing account at Maryland National for a few years. In turn, that account would act as collateral on a loan Maryland National would make to Tusk Cycle, providing them with the ability to buy the old grocery store and renovate it (three year lease with an option to buy) and move their operation. There were some other provisions in the paperwork about the length of the loan guarantee and certain covenants as to accounting standards, but nothing I hadn’t run across before.
Tusker just sat there, his mouth open. Tessa was a bit more animated and happy. Tusker said towards the end, after all the terms had been reviewed, and a copy of the paperwork provided to them for their own lawyer’s review, “I just don’t know what to say. We’ve been talking about this for the last week, but it’s just starting to sink in. We can really do this!”
Tessa leaned over and kissed me on the cheek. “You are our hero! I promise we will pay everything back! This is tremendous!”
Some of the others chuckled when Tessa kissed me; I was embarrassed. I got over it by saying, “You bet you’ll be paying back this loan! Remember Snidely Whiplash? I will really enjoy evicting widows and orphans! You’ll think about Ebenezer Scrooge and wish I was that nice!”
We sent Tusker and Tessa on their way, with instructions to have their lawyer call John about any questions and to set up a date to close all the paperwork. Afterwards, we just sat around the table and smiled at each other. “So, we can really do this sort of thing?” I said in wonder.
“We really can,” agreed Jake Senior, grinning back at me.
“Well, let’s get this Buckman Group thing all set up, and do a few more,” I answered, grinning.
It was the end of June before all the lawyers and outside people agreed on everything, and we all signed the papers. On June 30, we all sat down in John’s office along with a couple of New York lawyers who had reviewed all the paperwork. They started passing around papers and we all started signing. Then everybody coughed up a check, although Jake Junior’s face was a little strained as he handed it over. He had borrowed some money from his father, and some from the Buckman Group, to be paid back out of his salary. We ended up with the following structure.
John Steiner — Chairman of the Board — He was older, seasoned, and made a good impression as the ‘grown-up’ running this thing.
Carl Buckman — President and Chief Executive Officer — Left unsaid was that the vast majority of the company stock was in my hands.
Jake Eisenstein, Sr. - Treasurer — Well, he was an accountant, after all.
Jake Eisenstein, Jr. - Vice President of Operations — We had to give him a title, and he was pretty ambitious. I could see him actually running the daily operations when we got bigger — if he worked out!
Melissa Talmadge — Vice President of Investments — She had all the brokerage and SEC credentials, and would handle anything we needed to do in buying and selling stocks.
Jake Senior brought his secretary, Grace, from the accounting office with him; John’s stayed with his practice as he began to unwind it. She had already told him she was going to retire soon, anyway. Jake Junior, as the head of operations, was told he was in charge of finding us some cheap office space. He was pretty excited about that; John, his father, and I just sort of rolled our eyes at this, but figured we could keep an eye on things. I was looking at him like one of my young but promising lieutenants. Everybody starts out somewhere.
Afterwards, I went home and told Marilyn. She wasn’t very impressed, as she was putting Charlie in his crib for his nap. “Business, business, business! I’ve got important business here!”
“I’ll give you some important business!”
Marilyn looked at me and smirked. “That’s not all that important.” She took Charlie’s dirty diaper and carried it out of the bedroom and down to the kitchen, with me following and protesting.