Offerings: A Novel

By Richard Smolev

Kate Brewster's quest to become the first woman to run a Wall Street institution is about to come to fruition. Wooed away from a top job at a competing firm by Ed Roth with promises of breaking the glass ceiling when she succeeds him as the head of the investment bank Drake Carlson, Kate learns that she has real potential for the top spot. First, she must prove her worth by unconventionally putting together an IPO for a small games maker whose most valuable but unknown asset may be a painting stolen from a Jewish family as they fled Austria after the Nazi invasion.

Kate's professional challenges play out amid a family crisis: her husband's company is imploding and he may have to relocate to a remote part of China to save even a small portion of his business. Her integrity is challenged when she's accused of slowing down a deal to sell her husband's company to divert the sizeable sales commission to Drake, her new company. As a result, Kate uncovers an illegal trading scheme involving her partners, and their downfall triggers another firm's attempt at a hostile takeover of Drake.

Against seemingly impossible odds, Kate is able to strike a balance between the demands of the deal she is running and the right of a patriarch's family to seek closure for wounds that date back generations.

• Language: English
• Publisher: Chicago Review Press
• Release date: Oct 15, 2012
• ISBN: 9780897337076

Book preview

Mountain

MAY

ONE

What in the world was Steve Reed doing lounging in Ed’s office, dressed like the Prince of Wales? Was Ed having second thoughts about Kate, a woman, stepping into his shoes when he finally retired? After what felt like a month and a half of questions and no answers, Kate did what she always did to bring herself down to earth when meetings got crazy around her. She started spelling her kids’ names backward. H-A-R-A-S. K-C-A-M. Haras. Kcam.

By the time Kate got to Mack a third time, she was ready to find out why Ed had emailed her, asking her to drop whatever she was doing and pop into his office. And now, still not more than four or five feet inside Ed’s office, Kate turned to him and said, How can I be of help?

Steve has an interesting lead and we haven’t much time. Ed leaned into his desk. We need you to jump in. Steve, tell her.

Steve Reed moved from the sofa that was under the Frank Stella to the chair next to Kate. The man smelled like he’d spent too much time at the fruit vendor on the corner across from their building. Grapefruit. Mint and blood orange. Cinnamon. A bit of leather. Torero by Guiliano. A few years back Harvey Weinstein had taken Kate to one of his Oscar parties to thank her for helping to find funding for Shakespeare in Love. Afterward she gave Peter, her husband, the cologne from one of the swag bags. Peter had sprayed some on his wrist, said he smelled like a male whore, and pitched it. The word Torero became shorthand around the Brewster household for who the hell are you kidding?

It could be a real find. The company is called Majik, Steve said, and began describing the small game making outfit in Boulder. It had a couple of good titles and was interviewing investment bankers to help it crunch all the numbers, dress up its story, and do everything else a company needs to get listed on one of the stock exchanges. Wall Street thrives on IPOs (what the rest of us call initial public offerings), but Goldman Sachs and Morgan Stanley had taken a pass. Steve had been able to get an interview with the company management on Friday.

And the big boys said no because? Kate tried not to sound condescending.

When Ed Roth had convinced Kate to think about succeeding him she’d asked if there was any serious competition for the job. Steve’s name never came up. He’d dumped a slew of dolled up subprime mortgages on Drake, and the result had made him radioactive. But now he didn’t look worse for wear. A two-hundred-dollar haircut, nails that outshone hers, a bespoke Anderson & Sheppard pinstripe suit and a smirk.

Who knows? Steve said. Not enough sex appeal. Not enough time to get their act together. Maybe they’re not as hungry as we are.

How about not enough upside? If it were Kate’s call, she’d suggest they keep trawling because there were bigger fish out there. But this encounter was some sort of test, and she needed to calibrate her next steps carefully. Was Ed looking for loyalty or enough judgment to push back at the idea and save Drake’s resources? Did he want prudence or fealty? Resistance might cost her everything. She said she was in.

Ed muttered something about being kept in the loop. Steve picked up his BlackBerry and said he’d email the company to confirm their time slot. Kate reached into her pocket and fetched hers. She hadn’t been in Ed’s office more than five or six minutes and there were two messages from her husband. Both had exclamation points. Both asked when she could talk. The second said he was losing his mind.

She smiled at Ed and then at Steve as she typed her response. Give me three minutes. I’m just wrapping up an ambush.

When she got Peter on the phone he sounded as though he’d just been waterboarded.

How do you feel about spending the next year or so married to a guy living in the middle-of-fucking-nowhere China?

Not now, Peter. I just got pulled into something that’s about to take over my life and I don’t have time. And I’m already married to a guy who lives in Scarsdale. What’s with all the exclamation points on your email? Since Peter was going goofy on her she decided to multitask. She Googled Majik.

No joke, Kate. We’re in play. I just got a term sheet from some outfit in China to buy what’s left of Ascalon for a buck a share.

Kate pulled back from her computer. Something like this had been inevitable ever since Ascalon got hit with a patent-infringement suit it couldn’t seem to shake off. The stock had been sinking for months. Kate knew some bottom feeder would come along. But if Kate and Peter were going to drown in all that debt they took on while the value of Peter’s stock was in the stratosphere, why not at least be brought down by some good old American like Carl Icahn?

What’s with the married-to-a-husband-in-China part of the conversation?

One of the terms is that either Cass or I need to transition everything we know to their people and their systems. Without that, there’s no deal and our shareholders will be all over our asses.

Kate leaned forward on her desk. Why can’t Cass go? He doesn’t have any children.

Amy announced last week that she’s three months pregnant. At least ours are in school.

The blasting sound of one of Majik’s computer games jumped out of her speakers. She reached for the volume control.

You don’t have to say yes, Peter. Being in play only means you’ve got to look for a white knight.

I know. That’s why I’ve got so many lawyers in my conference room I can barely hear myself think over the sound of all their goddamned meters ticking. Fingers crossed, babe. If you’ve got that Prince Charming on your Rolodex, send him over. If not, we’ll be stuck with phone sex for a while.

Kate picked up her pen and wrote, I’m in a fight for my career and the S.O.B. won’t be there for me. It wasn’t the way to bring the conversation to a cheery end.

Good thing we’ve got Skype, she said. Let me make a few calls and then we’ll talk tonight.

She looked at her phone for a few moments before putting it back in its cradle.

Kate told her assistant to hold her calls and then shut her door, picked up one of the cushions from her sofa, held it as close as she could to her face, and screamed.

She did a few neck rolls and took a couple of deep breaths. She needed to jump on the project Ed had dumped on her. But she took a small photo from her desk and walked to the window to see the picture in the morning light.

It was Mack and Sarah, Kate and Peter in the photo. Mack was a newborn, just home from the hospital. Sarah was leaning into her new brother and touching him on the cheek, whispering his name, bending in to kiss him. At the instant Kate’s mother said she was ready to take the picture, Sarah had turned toward her grandmother with the most delicate smile. Peter beamed with his arms around them all.

Kate closed her eyes and ran her finger across each of the three pink roses on the top of the gilded frame.

TWO

Mack, wearing no top, threw open the door and charged at Kate in his bare feet. He grabbed her around her waist. What was he doing up at eleven thirty?

Are we going to have to sell the house? Are we going to have to move? I don’t want to go to China. Mommy, tell me we don’t have to. The words tumbled out of him as though he’d been waiting hours to set them free.

What in the world are you talking about, Mack? Kate looked through the open front door. Where was Peter? Mack was running around half-naked in the middle of the night and Peter hadn’t said a word?

Carey called me after school and said he heard his parents talking about Dad’s company. They said it’s being sold. Mack gulped for air. So Sarah looked it up and told me everything. Is it true? Are we going to have to sell the house? Do we have to leave? Damned Internet. Why hadn’t Peter focused on Mack?

Kate stroked her son’s back. His body was shaking against her leg. She said nothing until they were safely inside. Siena, their Brittany, who sensed Mack’s anxiety as though he were one of her puppies, stood at attention.

Peter was standing at the bottom of the stairs with his toes sticking out from under a pair of bleached-out jeans and his bluetooth hanging on his ear. He was wearing a Tampa Bay Buccaneers tee shirt. He’d never been much of a clothes hound, even after Ascalon went public. He’d probably worn those clothes to work that day, to the place he called silly-con valley east, an office that had been such a hot commodity that some mornings Peter could wake up three or four million dollars richer on paper because a trader on the Tokyo Exchange got it into his head that today was Ascalon day.

But what Peter wore to work today and what he’d be wearing to work in the middle-of-fucking-nowhere China didn’t matter either. And neither did the fact that Kate’s day had started eighteen hours ago with Ed’s can-you-pop-into-my-office bullshit and then morphed into putting together a pitch book that probably would be too little too late. The only thing that counted at the moment was that her little boy was being run into the ground by monsters.

I tried to get Mack to sleep, Peter said, but he wanted you. Everything’s going to be okay now, Mack. Mommy’s here.

Peter handed Mack a small red Lego car they’d been playing with. Mack and his Legos. When he was thirteen months old, he swallowed two of Sarah’s. Peter had called Kate from the ambulance and told her to come straight to the hospital when her plane landed. She was fogged in at O’Hare. She refused to get on a plane until she heard from Peter that the doctor in the emergency room had made everything right. When she called her mother to tell her what was going on and said she was going to quit her job at Greene Houseman on the spot to spend all of her time with her children, her mother laughed, said Mack would be just fine, children survive far worse. Kate had been the most competitive kid in everything she’d done since she was about six, and it would take a whole lot more than two Lego blocks to get her to drop her career.

Kate led Mack into the solarium. They nestled into the soft beige love seat.

I can’t stop crying, mommy.

Kate pulled the brown fur throw blanket that was jumbled over the arm of the chair around them. She kissed Mack’s fingers. She stroked his hair and pressed him against her as hard as she could. His hair had the lemon scent of his shampoo. Mack was her quiet child, her second, her last, her baby. His fears were much closer to the surface than Sarah’s.

You’ve nothing to worry about, Mack. We’ll be safe here for a long, long time. Kate found a blue Kleenex in her pocket, wiped Mack’s nose, and then her own.

So many stars above, so many cities at the bottom. Kate began singing "Ach Spij Kochanie," the song her grandmother had always sang to her, and that Kate’s mother had sang to Sarah and Mack when they went to bed. "Stars are giving signs to cities that children must go to sleep..."

Mack’s head was still against her chest. That song makes me think of Grandma. Mack inhaled and said he missed her. Kate missed her too. Until a couple of months ago, she’d had the luxury of flying her mother in to be around the children during times when her work demands were too great. Now would have been the perfect time to call in the cavalry, but with her mother gone, Kate had to create new ground rules. Whining quotas. Time limits for tantrums. Frequent flyer points on Brewster Air (redeemable for ice cream, movies, video games, and extra TV time) for self-discipline. It was like house-training two new puppies.

I don’t want anybody to take me out of my house. Mack’s voice was growing softer.

Kate looked around the room. The Chippendale desk. The Persian carpet they bought in Istanbul. The early nineteenth-century poplar corner cupboard stocked with Meissen porcelain. There was an original oil by Fernand Leger above the mantel. Peter had outbid a Saudi prince at the Langley Spring auction in London the year before. Kate always thought the story of how he came to own the painting gave him more pleasure than the picture itself; three women, distorted the way all Cubists slice up their figures, sitting nude on red stools on a checkered tile floor.

Mack whispered his fear again. Kate wondered if it was more than a demon-in-the-closet sort of fright. The house had been through two bankruptcies and one divorce since a stock trader named Cameron Dortmund built it for his wife Lucille and their boys Martin and Simon. They lived in it exactly nineteen days before he was wiped out by the crash of 1929. Peter laughed at the supposed curse. The day Kate and Peter took the title, Ascalon closed at thirty-seven and a half. He thought the price would rise forever, so instead of selling any of his shares, Peter pledged two hundred and fifty thousand to get the cash to buy the house and another two hundred thousand to buy the Leger.

The stock closed today at under a dollar. They’d made such a large bet on Ascalon they had little to fall back on beyond what Kate could earn.

Kate took another look at the Leger. In the morning, she’d make some calls to find out whether they could sell it to give themselves some breathing room.

THREE

Two days later, Kate was in Colorado.

Chris Franklin, from his seat at the head of the table, spoke first. Let me get right to the point, he said, with a soft inflection. We’ve talked to three sets of bankers this week and every one of them told us to stick to our knitting and to ride out the storm. They said the capital markets haven’t recovered to the point where they’re ready for someone as small as Majik. So, tell us something we haven’t already heard.

Chris was a compact man, tightly coiled. Dusty blond hair curled away from his face. The way he kept moving from side to side suggested he’d prefer to be on the plant floor or in the design room or on the back of a horse. Kate guessed he might be somewhere in his mid-forties.

There’s a large dollop of truth in what you just said, Chris, but look at the other side of the coin, Kate said. Hedging her answer only would have assured defeat. At the rate you’re burning through cash, Majik will trip its bank covenants by June and you’ll be bone-dry by July or August. Unless you’ve got a few million dollars sitting around, you don’t have the luxury of waiting for even a partial recovery of the market.

Thrust and parry. It was Chris’s turn to react. Kate saw no reason to rush him. Her associate began rummaging through his book bag, to bring out the slick books she’d prepared. Kate raised her hand two inches off the table to hold him back.

Why June? Chris asked, leaning forward. The man seated to his right, short, square-faced, beady-eyed and balding, looked confused. To his left, Beth Parker underlined the word June on the pad in front of her.

Kate spun her laptop around. She invited Chris to scroll through her numbers. He moved to the center of the table, pulled it toward him, and looked over the top of his rimless glasses. Beth stood over his shoulder.

It’s not just the cash burn. You’ve also got to factor into your thinking how your competitors have positioned themselves. Greatgames, Sony and Microsoft all have licenses with Disney or other major studios to exploit their characters. Wowaction just got a tie into Paramount for its summer films. I’m not telling you something you don’t already know, but there was a fire at the Kiyobe plant outside Seoul two weeks ago. It’s prioritizing shipments of its chips according to order size. Yours won’t be big enough to get their attention.

The way everyone on Majik’s side of the table was leaning in Kate’s direction emboldened her to go a bit farther. You need this cash to get the chips that’ll enable you to get your games on Wal-Mart’s shelves before Thanksgiving. Without that, you’re dead. You’re trying to focus on the equity markets, but the harsh reality is that in this lending environment, once you miss your sales targets your banks will abandon you.

There were a few more slides on her deck, but Kate had scored all the points she needed.

Chris’s cell phone vibrated on the table where he’d set it. He apologized and said he hoped the interruption would be brief. Beth took the spot at the table where Chris had been sitting. She asked if she could email Kate’s slides to herself.

Kate took a small sip of water, fished her BlackBerry out of her bag, and moved to the other side of the room. She inched toward a painting behind Chris’s desk.

The painting was an oil on canvas of an Alpine scene sitting in a frame that had obviously been hand-carved. The corners and the middle of each side had a shell imprint surrounded by vines and flowers. She reached toward the lower right corner and touched the words Gustave Courbet. Her eyes followed a series of tiny brushstrokes across the middle of the picture.

Kate, Chris said after she had been standing near the painting for a couple of minutes. Please clarify this for me. She went to the side of his chair and began explaining how she’d crunched the numbers. Beth walked to the credenza, filled her coffee cup, turned directly toward Kate, and spoke before Chris had a chance to do so.

If we have so little margin for error, I’m surprised you even bothered making the trip out here. You must see some potential or you wouldn’t have wasted your time. So tell me, what probability of success do you ascribe to the offering?

Kate wasn’t surprised the women in the room seemed to be the only ones on their toes. Beth probably spent as much time keeping her kids’ heads on straight as she did for the men in this room. Sixty-forty. Seventy-thirty if we’re lucky. The market’s got a long way to go, but it’s inching back. Families who’ve pinched pennies for the past couple of Christmases want to get their kids something new and different this year. There’s a lot of pent-up demand out there right now. The answer to your question depends in part on how much you believe in what you’ve got in the pipeline.

How big a raise can we pull off? Beth asked, moving to Kate’s side as she spoke.

Assuming the bleeding stops by Memorial Day, three-fifty, minimum. Closer to four if your Christmas orders beat my projections by more than five percent.

Chris spoke up. How much of our stock can the insiders sell? At bottom, that was what all these presentations were about.

Kate pushed back. I haven’t fully worked through the numbers.

Chris reached into the pocket of his shirt. He retrieved his phone and touched the screen to bring up a spreadsheet. How much? Ballpark.

Bankers use various metaphors to describe the point in the meeting when the principals ask how much they can put into their pockets. Her mentor at Greene, an M&A guru named Andrew Butler, called it the sexual side of capitalism. He said the image that always came to him at that instant was of Richard Burton dangling diamonds off his fingers before he placed them around Elizabeth Taylor’s neck. And now it was Kate Brewster’s turn to begin the seduction.

Thirty million, easy.

FOUR

Kate went straight from the meeting to the Denver airport for the redeye back to New York. Peter and Mack were in the kitchen when she walked in a little after eight. They were debating whether Mack should tuck in the shirt of his uniform before leaving for his Little League game.

Kate knelt down and put her arms around Mack. Everything okay with you, big guy?

The buttons on his uniform were all out of whack. He’d put the wrong button into the top hole and now he had more holes left to fill than buttons to fill them. Kate started both fixing and tucking in Mack’s shirt. He’d just brushed his teeth. His breath smelled of mint.

Kate lingered for a moment and then told Mack to look in her