mo' money mo' problems.
Cometh the Hour Cometh the Woman: Part 8
Bernard DeGeas was such a luminary at the Baird Holm law firm that I had only just finished mentioning his name when the receptionist was out of her chair, and in front of the desk to personally wish me well, then escort me to a well appointed waiting room. I was a little early, not being an expert on the intricacies of Omaha traffic, so I wasn’t affronted by the wait. However, it was still twenty minutes to my scheduled appointment when a short, round, older man with more hair growing out of his ears than on his head with a grey mustache and thick glasses came in and introduced himself as my lawyer. He walked me a few more doors down into his private office and sat me down in what was quite possible the most comfortable leather chair I had ever been in.
I remembered to smooth my skirt. But only because something felt odd after I had sat down the first time. Keeping my knees together I had sort of learned right away. I wasn’t even willing to admit even to myself I had those pieces let alone willing to show them off to other people.
“Well Jessica, let me have a look at you!” he said cheerfully giving off the look of a contented grandfather inspecting his growing clan. “It must have been five…six years since before you went off to that fancy high school, York something was it?”
“Phillips Exeter, as you well know judging by the diploma on the wall above you.”
“Is that what it is?” he looked over his shoulder and winked at me. “Bought it at a going out of business sale when I was first starting out, just good luck. I guess the man had the same name as me. The Harvard one, I won in a crap game, but…don’t tell the wife.”
“I’m glad for your good fortune,” I said smiling despite myself.
“Oh it’s good to see you smile again, too many years you spent with… that woman, and I never saw you smile. God! Look at you! You’re a woman!”
“You… were expecting a man?” I asked oddly.
“I was expecting the little girl I used to bounce on my knee, but I suppose she had to grow up, like we all do,” he said with a sigh.
“Is that so?” I asked raising an eyebrow at some of the model planes and other toys in his office.
“Ha ha,” he chuckled grandly. “Some of us, more and much less than others, of course.”
He got up to the bar to fix himself a drink. He looked out the window to the city below. The law offices were located on the 26th floor of the Woodman Tower and being that Omaha only had one building that was taller, this corner office had quite a view of the city below.
“You want a soft drink? Can’t offer you something harder, we employ about 15 former judges of several different stripes, and they are always in here after me for something. Would hurt your reputation if they see you drinking.”
“I’m all right for now.” I assured him.
“Take something, we’ll be in here a while. The girl outside can get you one them fancy eye-talian coffees from that Starbucks across the street.”
“Perhaps some water,” I suggested trying to placate him.
“Here you go then,” he said handing me a bottle of the sort of mineral water people usually pay more for than they would the equivalent amount of cocktail. I guess I should have felt honored. DeGeas walked back over to his desk and rested comfortably in his own soft leather chair. He took a moment to savor his drink and seemed to gather strength from it. He turned to face me losing a great bit of his jovial air, “I suppose, you think that you’re a wealthy woman?” he asked me unsympathetically.
'I don’t think I’m a woman at all.' I thought. “I... don… you mean I’m not?” I stuttered out confused.
“Well, you are and you aren’t that’s the truth of it,” said DeGeas waving his glass for emphasis. “You’re a woman of property. No question of that, but actual hard cash money is… somewhat thin on the ground. I have it all there in the attache case next to you. There is also a flash drive in the inside pocket with all the digital copies. Both are yours to take when you leave. Pull out your stack of papers and we’ll just go over things one at a time.”
I reached over to the black briefcase on the table and flipped open both latches to inspect inside and remove the stack of files. Certainly it seemed rather extensive for poverty.
“We’ll do it in descending order of liquidity,” he continued setting his drink down. “Though towards the end, it gets a little fuzzy on how to order it. At the top is the residue of your father’s various money market and checking accounts. For bookkeeping reasons, I had them all merged into one account over at First National. $36,204.13 as of this morning is what’s left after paying for your care and feeding. You have full access to it now, no one looking over your shoulder. If you wanted to take it all up to the Indian casino and party, no one will stop you. I only hope you put a hundred on red for me while you there. I promise I’m good for it.”
“I’ll keep that in mind,” I said trying not to break out laughing.
“You’re educational trust is still solvent, and you can spend that on anything school related, from tuition itself to books to housing. I won’t raise too much of a fuss as long as I can at least smell some academia. If you don’t use it for school, you get what’s in the tax deferred savings plan when you turn 25, but only after the government takes it’s piece of the action.”
“This can’t be right,” I said confused looking at the amount in the college savings plan: $8,200.00 left.
“Your father planned for his demise, like any responsible parent should, but I think he counted on living longer than he did, like all of us do. I doubt he would have agreed to sending you away to a series of boarding schools, no matter how illustrious, so that trust presupposed that there would be years to gain interest before being used, and also that it would not have been depleted at this point by the $170,000 required to send you to Exeter. The $8,200 remaining is actually a testament to the prudent investments of your father. There was after all, a great stock market crash shortly after it was funded.”
“I understand, it’s just… that’s not even a full semester at Georgetown.”
“I thought I heard tell that you were accepted to the Naval Academy. Don’t they pay you while you’re going to a free school, like good communists?”
“I had to decline,” I said looking down embarrassed. “Medical.”
“Oh, I’m sorry Jessie. You’re Uncle Ben would have liked that. Are you going to be all right, is it serious or were the physical requirements to stringent?”
“It was… something we can discus later Mr. DeGeas.”
“Right,” he said hesitating only briefly. “Well let’s move down the list. You own five properties free and clear. The taxes are even paid up until the end of the year. The house in midtown Omaha has six beds, five baths on three acres. It's worth about a million and a half in a good market, which we don’t have. You WERE offered that once about three years ago, but I declined it on your behalf. Now, if you were desperate, you could maybe get $500,000. But your great-grandfather would probably jump out of the grave to give you a good spanking if you did. He was mighty fond of that house, what with having built it with his own two hands and all. There is the lake house on Lewis and Clark, the cabin in the Rockies near Estes Park, Colorado. They're worth about $260,000 and $175,000, respectively, though waiting for the rebound would probably double that. You have not received any unsolicited offers for the vacation properties, and … times being what they are, they may be hard to sell even at a deep discount.”
“You are also a miner, congratulations. I’ll see about getting you a union card!” he joked happily as he turned to the next pile. “There is the hole in the ground in Carbon County Wyoming, your daddy bought it with personal funds when the executives at his company balked, kept saying 'there was coal in them thar hills'.”
“Is there?” I asked incredulously.
“Oh, certainly there is, and copper and manganese several others, trouble is, you need to pay people to dig it out of the earth, and the not inconsiderable equipment to do it with. That is unless you were planning to do it all yourself by hand with old school pick and shovel. I’ve had the numbers run, it would cost about $3,000,000 to reopen the mine, bring it all up to code and hire a workforce, keep em fed and watered for the six months or so you would need before you could reasonably expect a return.”
“And I don’t have three million dollars?” I countered taking a sip of mineral water for the benefit of my suddenly dry throat.
“In a word, no.” he said obviously sad to give that news. “Possibly we can find a mining company that wants it, now that your 18, I can actually sell it. The terms of your fathers will prevented the sale of any real property which protected it from the predications of… that woman, but it also meant that now you’re sitting on intact assets that no one wants to buy instead of a pile of cash from the potential sales of a couple of years ago. The Wyoming mine paid out while it was in operation. Much of the hard work has been done, already. You won’t get what’s it’s worth, but you’ll get plenty… eventually. Some of these sales take years though, particularly of late. Now any time a mine changes hands the Federal Government sticks their beaks in and has to do an ‘environmental impact study’ or some such nonsense.”
“If it was paying out while it was in operation why is it not still in operation?”
“Well, that’s a good question, and the sad truth of it is you were betrayed.”
“Was I?” I asked bitterly.
“Must be a new experience for you, a pretty girl like you, men would be falling over themselves to smite any of your enemies, but it’s happened now.”
'Not so new.' I thought.
“There was a cabal, of mid level managers. A few years after his death, they were doing their work, periodically paying into your trust fund the steady profits from the mine. Then one of them came up with the idea to take a little something extra for himself. He was found out, offered to cut in the person who found him who, now that there were two mouths to feed upped the stakes and diverted even more profits. It sort of snowballed. You see, that mine was a personal project of your father. When he died, there was no one to oversee it but… that woman. She was content to just see the cash being deposited and nothing more. Too much money got diverted and what should have been making a profit was operating at a loss. When the current accounts started dipping too low, the payroll got missed, and miners, understandably stopped showing up to dig up more minerals just to line the pockets of chiselers. There was no one to bail them out, or kick them in the ass before it was too late and the mine was shut, and much of the equipment sold off to meet the creditors.”
DeGeas swirled his drink around in his glass a bit and gave me a sad look.
“I wish I could have stopped it,” he continued. “Like I wish I could have stopped a lot of things. But I had no authority on this issue. All I could do was watch it happen...” he took out his frustration by flicking his finger on the propeller of a model plane and just started moping a bit.
“Do I still owe anything on that mine,” I asked concerned, as I tried to bring him back to the conversation.
“No, that’s settled, though you owe a property tax in Wyoming and that can get pretty steep. But if need be, you can miss paying it for three years before they can begin the process of seizing it for back taxes. By then I think we can unload it.”
“And the fifth?” I asked.
“Fifth?” he asked confused as he looked toward the bar.
“You said I owned five properties,” I clarified.
“Oh, so I did. You must pardon my mind for drifting, this meeting has brought back quite a few memories. The good and the bad… The fifth is also a mine… sort of. It’s a claim on one, though a shaft has never been sunk. It’s up in the far north. In none of it.”
“None of it?” I asked startled at the term.
“Or Nunavut or however the Eskimos pronounce it. Beachfront property as far as that goes,
but on the Arctic Ocean. A thousand miles from the nearest road, more than that to the nearest railhead. There are a few airstrips they carve out of the ice in the winter time, but even they are hundreds of miles away. About 10,000 acres of nothing, so far north not even trees grow. The only good news I think is that the Canadians don’t tax it, I guess they figure there is nothing to tax, you only pay for some Nanook of the North type to head in and work the claim once a year and keep the title legal. Doesn’t amount to more than a few thousand in costs.”
“’None of it,’ seems appropriate,” I commented dryly.
“Well, perhaps, perhaps.” DeGeas allowed magnanimously with a wave of his hand. “But your Daddy had an eye for the long term. He was one of the best civil engineers and prospectors in the business. There WAS gold there, is there still I suppose since no one can really get to it. I remember at parties, after he got back from there he kept pulling out a nugget he found right on the shoreline. Use to embarrass the hell out of his wife, and later your stepmother, you remember that Christmas movie Rudolph the Red Nosed Reindeer?”
“Yes, the claymation one?”
“Cartoon, whatever, he used to, whenever he was being ridden hard by doubters pull out that nugget and get back to em by singing that Burl Ives song ‘Silver and Gold’. You know how it goes, ‘silver and gold, silver and gold, everyone WISHES for silver and gold!” DeGeas sang it out in a reasonably good imitation.
“Whatever happened to the nugget,” I asked curious.
“Oh, I don’t know actually.” he said sounding surprised. “He carried it in his pocket like a lucky charm. After the accident, I don’t think anyone went looking for it. Perhaps the police gave the effects to your stepmother and she sold it. Or worse, threw it away since it wasn’t exactly jewelry quality, being raw ore and all. I can try to dig up the police report and see if it was listed.”
“Sure,” I said since that was what he seemed to expect. “And I suppose that mine would cost even more money to open up?”
“I’m not sure, there is enough money in the world. Some things can’t be bought! Like one day even in high summer where the temperature doesn’t get below freezing. Your father thought the technology would exist ‘someday’ for it to be exploited profitably. How far that some day is you’ll have to ask an engineer.”
“I’ve studied some engineering they are doing some impressive things with oil extraction on Alaska’s north shore. It can’t be too much harder to do it on Canada’s north shore.”
“Thinking of following in your father’s footsteps?” DeGeas asked with a wicked grin.
'If you only knew! “It just always been an interest of mine, I always enjoyed building things and figuring out how to make them work better even at the Academy I was plan…”
“Planning what?” He asked me intrigued.
“It doesn’t matter now,” I said as I closed my eyes and swallowed a scream. “What’s this next folder.”
“Ah,” he said pulling out his own copy and grimacing. “Your trust fund, and another... treachery.”
“What is this a Shakespeare tragedy?” I commented.
“Sometimes I wonder,” He grumbled picking up his own copy from the desk. “It was started even before you were born and your father kept adding to it. A bit more every time he had a good year and he had a lot of good years. When he died it was valued at about $35 million scattered across about three dozen different stocks, bonds, funds, and even some small businesses.”
“And how much is left.”
“$312,000 give or take… mostly they took.”
“Who is they?” I asked coldly, I never thought the expression could actually be true but it felt like my blood had turned to ice water.
“The terms of his will were overly trusting. Money was set aside for you and money set aside for… her. But of course you were too young to manage the trust yourself, so it had to be done for you. The terms of the will had three trustees: his brother, his accountant, and his wife. Well, his brother died before he did and that never got changed. The accountant was old when the provision was put in place. About a year into his tenure, he went into dementia and was unable to manage his own affairs let alone yours. That left your stepmother who appointed her own replacements.
He took out a multi-page document flipped through it to a marked page toward the back, then laid it in front of me.
“There is the damning provision,” He pointed at what I assumed was the will. “The trustees as a sort of motivation to be good guardians were allowed compensation in the amount of one quarter the income from the trust. The principle could not be touched, but they could receive a healthy payday from running things well… and the trust was… not managed well. She, for reasons you probably don’t need explained went for the investments with the greatest potential returns. The more money that was made the more money she got right?... Well the bonds with the biggest yields were junk bonds, called that for a good reason. The stocks that paid 17% dividends were often being run into the ground to generate quick profits and were worthless a few quarters later. Tech stocks she bought on the bubble were sold off on the crash. Every time there was a loss trying to get a greater income, the principle got chewed away, until… at last two years ago, she came to me and said, and I remember the phrase exactly… ‘see to this Mr. DeGeas won’t you?’ I didn’t think there were still people that actually talked that way.
He got up from his desk to poor himself another drink from the decanter, but he didn’t sit down again, just stared out of the window to the city below.
“Well I saw to it, as best I could. I sold off everything and started over again. Put it in stable companies and respected funds. It will yield about 6-8% in good markets, 2-3% in bad ones. I set it up to reinvest the profits, but you can pull out all the income now that you’re an adult. And you can now make all the decisions towards its allocation on your own, if you want to take over. The principle however, you cannot touch until you are 25. But then, it’s not much of a principle any more, having lost 99% of its value.”
“Was it criminally mismanaged?” I asked feeling affronted even if it wasn’t exactly my money.
“Possibly,” he admitted gruffly. “Almost certainly, but proving that case against your stepmother-”
“Wicked stepmother,” I interrupted harshly. “Or is that not a technical legal term?”
“I have heard it applied so,” he grinned at me from the window. “But the case law has never been tested.
“So I can’t sue her to recover the money.”
“You can sue anyone for anything, this is America! But it would be pretty pointless in this case.”
“The law technically does not recognize mere vengeance as a legitimate legal tactic. The purpose of most lawsuits is to recover damages and well, I don’t think there is anything left to get, so there would be no purpose. She has blown through what your father left her and what she could siphon off from your trust. Last I heard, she was over in Europe and had attached herself to some English Duke, or Earl, or Duke of Earl. Whoever he is, he’s smart enough not to marry her, just pays for her upkeep. You could file your case and pay us a thousand dollars an hour until you’re out of money to pursue it, but there is no pot of gold at the end of that rainbow… I’m sorry.”
“I’m sorry too.” I admitted absolutely truthfully. The woman hadn’t exactly taken from me, but she had taken from my girl and the patrimony of my own child.
“This would be a lot easier,” said Mr. DeGeas looking down at the bar. “If you were drinking too.”
“I’m afraid I can’t my ba…my body doesn’t tolerate it well.”
“Probably for the best… The last piece of your inheritance is 3,450,600 shares in the Scott Company. It is by far your largest asset. Dwarfing even the trust fund when it was fully funded.”
“How much is that worth?” I asked, finally some GOOD news.
“I don’t know,” He said regretfully. I could see that it was indeed true he regretted not knowing. “The thing that you must understand is that the Scott Company is private and not publicly traded. You can’t buy shares in it like you could Apple or GE. Which means there is no ready marketplace to value its shares. What’s worse, it is not a traditional corporation, but a partnership with your father and his father before him and so on as the principle owners and managing partners. Even further worse is that no one who is not a partner can buy in, so only other partners can buy you out. That’s one of the reason those shares were never in your trust. They were not saleable.”
“So what now?” I asked. “I took two sections of economics and business management at Exeter. All those future captains of industry, it was sort of expected. We covered partnerships a lot. Isn’t there a provision in place for a dead partner to be bought out automatically?”
“You would think so, wouldn’t you. And lawyers or accountants would certainly have that in place. Engineers though, must have other necessities,” said DeGeas as he walked back to the desk and sat down. “Likely they thought about it and left it out. You’re fathers share so dwarfed all the other partners that none of them even combined could come up with the cash. So the shares have just sat there.”
“But don’t I own the company then, can’t I derive some money from its income.”
“You own it, but you do not control it. Think of it like Queen Elizabeth, she reigns but does not rule. I have the partnership agreement here, though I had to fight in court in order to get it. A partner who does not actually work, by that I mean brings business into the firm, bills hours, that sort of thing for one year, looses voting rights, though not equity. A partnership, at its core is about professionals together being stronger than apart. A partner is penalized for not pulling his own weight. But since you were all of eight years old at the time, don’t feel any shame in not putting on a hardhat and punching a time card. So your block of shares whenever they hold a vote on something always abstains and a man who holds 6%, votes like he holds 20%.”
“But don’t I at least get a share of the profits?”
“Sure you would, if there were any. But somehow the company went from a declared profit of %98 million the year your father died to a breakeven point or net loss in every year since. You get a tax return every year from the company they are required to send you one, and I go over it quite carefully.”
“A company operates at a loss for ten years and still remains in business?”
“It’s not as hard as you might think; most fortune 500 companies manage to do it all the time decade after decade. Though for them it’s about managing taxes. Here all the remaining voting partners had to do was vote themselves some bonuses or larger salaries or expensive corporate retreats until there was nothing left. With no board of directors above them, and no shareholder revolt possible bellow they had nothing stopping them.”
“So I get nothing.”
“For now… part of that partnership agreement was that no more that 5% of the total shares could be newly issued a year. They have been gradually giving themselves bigger pieces of the company. When they have dissolved away your majority they will feel comfortable enough cashing out, finding some big engineering company like Bechtel to let them enjoy their retirement. When that happens you’ll be paid for your portion of the company, probably a lot. They can’t get away with looting everything from you, not in Omaha, not to a Scott. Not Yet! ... But they can get away with everything they have gotten away with.”
“So,” I said calmly closing the files on the desk. “At the moment I have: $36,000, half a semester of tuition, three houses to sell at a loss which in the meantime I have to pay the upkeep for, two holes in the ground. A few thousand a year in dividends-”
“Which is just about enough to cover my retainer,” DeGeas interrupted. “Though not the property taxes.”
“And also shares in a company which cannot be sold, except to the people who don’t want to buy them, and why would they when they can just make more of their own and give it to themselves?” I paused for a moment to gather my thoughts and consider the implications. “If something cannot be sold Mr. DeGeas, can it be said to have any value at all? Other than on the county property tax rolls.”
“That’s a philosophical discussion, and I’m a lawyer. But I think you’ve summed up things nicely,” he said closing the folder and locking it up in his desk. He then turned to me. I realized this was almost as hard for him to tell me as it was to listen to, worse perhaps, since he appeared to feel he had let me, or rather Jessica down greatly.
“Your father…depended upon the honor of his partners and the fidelity of his wife. And he was… ill served by both. Certainly I advised him otherwise and he heeded some of it, but he also thought he had more time. We all think we have more time…”
I pondered that for some time, and a comfortable silence filled the room. I had only just met Mr. DeGeas, but he seemed to think of me like a favored relation, and it was nice to be treated so after the emotional turmoil of the last few weeks. He reminded me incredibly of the faithful steward from some historical fiction. Watching over the young Prince, or in this case Princess while the King was on a crusade. I could see that it physically as well as emotionally pained him to turn over an estate so depleted by other people's dishonor. Perhaps some good has come out of my stolen life. Jessica had no idea that things had got this bad. She knew W.S.M. was living high off her father’s money, but whenever we had talked about her inheritance, a subject that was never very comfortable for me since I didn’t want to be seen as a fortune hunter, she talked about it like it was a great sum in the many millions. And now… Now I had a baby and college to pay for and $36,000 to do it with.
That might seem a great deal of money to most, and even to me a short time ago, but it goes faster than most think. I needed a car, a place to live in Maryland, prenatal care… FAT CLOTHES. I had been balancing my own budget for years ever since my first summer job and now I saw a finite stack of money against steadily growing bills. I was thinking up new ones every second. If Martin Scott was looking down from heaven, well, I hoped he was pissed off at the behavior of his daughter in addition to the position she ( and her stand in) was placed in. He likely was feeling all sorts of ghostly guilt that he didn’t do things different while alive…. But we always think we have more time.
And this body I was in, her mother died in the childbirth that is ahead of me.
“It’s worse than you think Mr. DeGeas,” I said calmly as I took a sip from my mineral water.
“Oh, how can it be much worse than that?” He asked waiving his hand at the scattered folders in front of me.
“Do I have confidentiality or do your report things back to stepmother?”
“She was never my client, you are. Hell, you could tell me that you murdered the Pope and I would try to find a way to get you off.”
“Nothing so drastic, now I want you to not interrupt me, though I suspect you will want to. The simple reason that I am not at the Naval Academy is that I am pregnant.”
“No interruptions Mr. DeGeas!” I scolded.
“Oh, I’m sorry Jessie, it's just... Don’t do that to an old man’s heart!“
“As you know, my own mother died in childbirth. I recall your words earlier about my father planning for his demise like any responsible parent should. I wish you to draw up a will for me. Its provisions are simple, so it shouldn’t take you long. Are you ready?”
“Go ahead,” he sighed as he brought out a yellow legal pad to take notes on.
“The entire estate to go to my child under a trust and trustees to be chosen by you, if it lives. If not everything is given to … the local library. IF I should die and the baby live, custody is to be given to General and Mrs. James Ryan USMC of California and points abroad.”
“And who are they?”
“The child’s grandparents, other grandparents, since mine are dead.”
“And not the father? It’s not my business if you chose not to tell me, but I ask because there may be a custody disagreement, particularly over the guardianship of an heir or heiress.”
“I doubt he would put up much of a fight, and indeed he is in the Naval Academy for the next four years and won’t be able to care for the child. Please have that drawn up as soon as possible.”
“Very well,” he said tossing the pencil down on the desk hard. “But let a tired old man just say that it’s worse than YOU think too.”
“How so?” I asked heart beating hard.
“I was trying to do right by you, when you wrote and said you were admitted to the Academy and the Navy would be looking out for you. I sort of sang a halleluiah. By the time four more years rolled around, I could have sold a thing or three and handed you the actual millions you deserved. But that was in the future, for the time being, I had to conserve as much of your cash as possible. So I stopped the premiums on your health insurance. As of Monday when you were supposed to be in the Navy you have no coverage. And now, you have a baby on the way whose average cost in the United States is $20,000, which can balloon to $50,00 or $100,000 if there are complications, which you are genetically predisposed toward. You have this baby Jessie and you will be busted broke!”
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