Trip was excited to be working with a more experienced developer, the mentor he’d never had. Then he saw the sales projections from Trimble’s marketing people.
“Dude,” he said to me over drinks in his office one evening, “we’re going to be rich. I’m talking millions of dollars. Each. As a matter of fact, we may be talking tens of millions. And that’s just for starters. The golf club and all the associated revenue will be a goldmine!”
“What about Brett?”
“Him too. I figure he’ll invest right along with us. C’mon, let’s give him a call.”
“Sorry, guys,” he said. “My business manager wants me to diversify. He says computers’re big right now. He wants me to invest in some robot company. They talk to each other over the phone or something.”
We tried to talk him out of it, but probably not as hard as we should’ve. It meant a larger share of the profits for us, after all. So we called Trimble and told him it was just the two of us in the form of our company. His people drew up reams of contracts.
“They’re pretty standard boys. You know that. I don’t know why we even use ’em. A handshake’s good enough for me. I trust you. But the lawyers insist, so…”
Trip spent days poring over them. Then we sent them to our own attorney for review. He warned us that he didn’t specialize in real estate law, which should have been our first red flag. Trip said it was okay, since he just wanted a legal opinion and to double-check his own reading. The attorney repeated his caveats and approved the contracts.
We had a big signing ceremony that looked like a scene out of a movie, with a long boardroom table and a bunch of men in suits. It was exciting and intimidating at the same time, especially when we realized that Trimble had nearly a dozen people on his side. We had two, Trip and me. We hadn’t even thought to bring our attorney.
“Aw, hell,” Trimble said, “we only need one of these guys. What’m I paying the rest of you for? Go on back to your offices. Send in the Notary and let’s start making some money. Am I right, boys?”
“Right!”
Once we signed the contracts, we started investing real money in the new project. Trip and I scraped together everything we could, effectively our life savings. It was an impressive amount. Some came right back to us in the form of deposits for work we planned to do, but most of it went into the general project fund to pay for surveys, impact studies, and preliminary site work.
Trimble knew exactly what we needed, and he had the connections to make everything happen. Trip and I were so eager that our first setback barely even registered.
“Boys, I have a problem,” Trimble said. “And I’m almost embarrassed to admit it, but I feel I should tell you up front before you find out on your own. I don’t want you to think I’m hiding anything. It’s about the money.”
Trip and I looked at each other in concern. It should’ve been our second red flag, but we didn’t see any need to panic just yet.
“My little project is finally on schedule, thanks to your hard work.” Trimble smiled at Trip before he continued, “But the damn bank won’t release any of the funds from escrow. Don’t worry,” he assured us, “the current investments from you boys are enough to keep things moving until I shake loose my own capital.”
We breathed a sigh of relief. But then Trip saw an opportunity.
“Well, since we’re having to wait on you” he said, “we’re exposed to more risk up front. More risk, more reward. Shouldn’t we have a larger share of the final development?”
Trimble winced. “I was afraid you’d ask for that, but it’s what I’d’ve done in your position. I’ll be honest, I was hoping you’d stick to the original agreement, but you’re a sharp one. And you have me over a barrel, so…”
They started negotiating. Trip wanted 60 percent of the country club partnership. Trimble countered with 52 percent, and they eventually agreed on 55.
Trip was proud of himself, of course, but we should’ve realized it had been too easy. Still, we didn’t have a clue, so we went back to work on the condo and retail project.
By the time Christmas arrived, we’d done months of work for Trimble but still hadn’t been paid for it. He apologized and promised to call his project manager first thing in the new year. And, he reminded us, we’d have plenty of money coming in once we started getting paid for the work we planned to do for our own project. That should’ve been another red flag, our third or fourth, but we ignored it too. Our eyes were full of dollar signs.
We started having problems we couldn’t ignore in early 1993. We received payment for some of the work we’d done, but the checks didn’t clear.
“Dammit,” Trimble swore, “I told them to use the new account. Those checks’re from a project two years ago. Boys, where are you? Right now, I mean. I’m going to have one of my people bring you a personal check. Thirty minutes and you’ll have your money.”
Sure enough, an assistant arrived with a check. It was for half of the amount of the original checks, and they’d only been a fraction of what he owed us, but the new check cleared the bank. Trip and I relaxed yet again.
Then we learned that the environmental impact study had found a problem with our land.
“It’s two problems, actually,” Trip said. “Some damn woodpecker on the Endangered Species list. The other is almost as bad. Seems someone’s been dumping oil and used tires on parts of the land. Cleanup and remediation will cost a fortune.”
All of a sudden, the color drained from his face.
“What?”
“The land. Its value. We’re contractually obligated to sell it to Trimble for the market price. With these environmental problems, the value just went down.”
“How much?” I asked.
“A lot. Fifty percent. Um… maybe more.”
“How much more?” A pit had opened in my stomach.
“Maybe… I don’t know, but it could be bad.” He thought of something. “Hold on… Trimble doesn’t have to buy the property. We’re only obligated to sell it if the project moves forward.”
Things started to fall apart pretty quickly at that point. Trimble called in a fury over the environmental report. He’d trusted us. He’d been counting on us. But now he’d have to take a loss on his investment.
“He never invested a dime!” I raged after we hung up. “What about us? We sank our life savings into this project!”
“I know,” Trip said, but he was worried. “I’ll… figure it out.”
He didn’t figure it out. Trimble never paid us for the work we’d done on his previous project. The company we’d been dealing with declared bankruptcy. It was only a holding company, we learned. We might recover some of what they owed us, Trip said, but it would take years in court and require money we didn’t have.
The development company for our new project declared bankruptcy too. It turned out that we didn’t control it. Trimble did as the initial investor, through Series A stock. We looked back at our investment paperwork and discovered that we’d purchased non-voting Series A-1 stock, a subtle but important difference.
Worse, the money from our investment had all been spent, paid out to companies controlled by Trimble. He and his cronies had effectively stolen every dime, and it had all been legal.
The cherry on our swindle-sundae arrived in the form of a purchase demand for the tract of land. We were obligated to sell it at market price. It was effectively worthless because of the environmental problems. We were staring down the barrel of a total loss, all because we’d trusted Trimble.
Nana Choate saved us. Not with any money, but with her gift in trust. We’d formed a partnership when we’d bought the land, and the partnership was the legal owner. Trip and I had signed the contracts with Trimble on behalf of our homebuilding company, but it didn’t own the land. They were the same in our mind, but not legally, and that was the important point.