cancellations, union problems, investment plans ...'
'You mean every single business decision has to be cleared with you? Is that what you're saying?' Walter flinched and Freeman realised he'd raised his voice.
'It isn't necessary to clear anything with us, Tony. But we want to be kept fully informed of what's happening at CRW.'
'For what reason?'
Nelson leant back in his seat. An inch of starched cotton peered out from beneath the cuffs of his suit and Freeman saw the glint of gold cufflinks. 'The bank has a considerable exposure to your company. With things the way they are at the moment, we aren't prepared to risk that exposure. If you're heading for Chapter 11 or worse, we want to know in advance.'
'You mean as soon as it looks as if we're going under, you want first claim on what assets we have left?'
'We already have that. Most of the bank's recent loans to you were against specific properties owned by CRW.'
'Most, but not all,' Freeman said. 'Is that it?' The First Bank wasn't the only institution which had lent money to the company, and CRW had used various buildings as collateral against other loans. Now he understood what was worrying Nelson. If the company went bankrupt with zero cash and a next-to-worthless inventory, it would be lucky to get half of its investment back; if it foreclosed its loans right away, it would just about break even. But taking its money back would be a self-fulfilling prophecy the company wouldn't be able to survive without it. Perversely, that would work in Nelson's favour because he could point to the collapse of the firm as a sign that he'd made the right decision in pulling the plug. He'd come out of it as a hero, the man whose shrewd business savvy had saved the bank's millions.
'I think it fair to say that we would be happier if we had more collateral,' Nelson said. 'But CRW isn't exactly rich in unencumbered assets, is it?' He looked at Freeman like a prosecutor grilling a hostile witness.
'There's the land we own near Annapolis,' Anderson said, trying to take the heat off Freeman.
Nelson shook his head. 'Undeveloped. I'm surprised you didn't sell it years ago.'
Freeman felt as if he had to defend himself, even though THE BIRTHDAY GIRL 41 Nelson had made a valid point. 'It was where my father-in-law built his first factory. He kept it for sentimental reasons long after the buildings were demolished.'
Nelson smiled. 'You won't believe how many times I've seen sentimentality ruin a perfectly good business. Managers can get too attached to a workforce or a product and they fail to take die necessary steps to safeguard their business.' He bent over the table, his body as tense as a sprinter waiting for the starter's gun. 'Being a good manager is like being a surgeon. You have to recognise when the body is unhealthy, and you mustn't be afraid to cut to save the patient. Better to lose a leg than have the patient die.'
Freeman looked at his watch. 'Is there anything else we have to discuss?'
Nelson and Walter exchanged looks. There obviously was something else. It was Walter who spoke first. 'Tony, don't take this the wrong way, but the bank feels that until you're through this period, it might be better if we had a representative on your board.'
'A representative?' Freeman repeated.
'Namely myself,' Nelson said.
'Let me get this straight,' Freeman said. 'We have to report to you each month, and you want a seat on the board?'
'In a purely non-executive capacity,' Nelson added. 'You'll still be running the company. I'll just be ...'
'Interfering ...' Anderson interrupted.
'... keeping an eye on things. Looking out for the bank's interests,' Nelson finished. 'I hope you'll come to see me as an asset to your management team.'
'Do we have a choice?' Freeman asked, but he could see from the look of anguish on Walter's face that he didn't.
'I understand the board meets next Thursday at three o'clock,' Nelson said. 'I'll see you then.'
Freeman felt like a schoolboy being
'You mean every single business decision has to be cleared with you? Is that what you're saying?' Walter flinched and Freeman realised he'd raised his voice.
'It isn't necessary to clear anything with us, Tony. But we want to be kept fully informed of what's happening at CRW.'
'For what reason?'
Nelson leant back in his seat. An inch of starched cotton peered out from beneath the cuffs of his suit and Freeman saw the glint of gold cufflinks. 'The bank has a considerable exposure to your company. With things the way they are at the moment, we aren't prepared to risk that exposure. If you're heading for Chapter 11 or worse, we want to know in advance.'
'You mean as soon as it looks as if we're going under, you want first claim on what assets we have left?'
'We already have that. Most of the bank's recent loans to you were against specific properties owned by CRW.'
'Most, but not all,' Freeman said. 'Is that it?' The First Bank wasn't the only institution which had lent money to the company, and CRW had used various buildings as collateral against other loans. Now he understood what was worrying Nelson. If the company went bankrupt with zero cash and a next-to-worthless inventory, it would be lucky to get half of its investment back; if it foreclosed its loans right away, it would just about break even. But taking its money back would be a self-fulfilling prophecy the company wouldn't be able to survive without it. Perversely, that would work in Nelson's favour because he could point to the collapse of the firm as a sign that he'd made the right decision in pulling the plug. He'd come out of it as a hero, the man whose shrewd business savvy had saved the bank's millions.
'I think it fair to say that we would be happier if we had more collateral,' Nelson said. 'But CRW isn't exactly rich in unencumbered assets, is it?' He looked at Freeman like a prosecutor grilling a hostile witness.
'There's the land we own near Annapolis,' Anderson said, trying to take the heat off Freeman.
Nelson shook his head. 'Undeveloped. I'm surprised you didn't sell it years ago.'
Freeman felt as if he had to defend himself, even though THE BIRTHDAY GIRL 41 Nelson had made a valid point. 'It was where my father-in-law built his first factory. He kept it for sentimental reasons long after the buildings were demolished.'
Nelson smiled. 'You won't believe how many times I've seen sentimentality ruin a perfectly good business. Managers can get too attached to a workforce or a product and they fail to take die necessary steps to safeguard their business.' He bent over the table, his body as tense as a sprinter waiting for the starter's gun. 'Being a good manager is like being a surgeon. You have to recognise when the body is unhealthy, and you mustn't be afraid to cut to save the patient. Better to lose a leg than have the patient die.'
Freeman looked at his watch. 'Is there anything else we have to discuss?'
Nelson and Walter exchanged looks. There obviously was something else. It was Walter who spoke first. 'Tony, don't take this the wrong way, but the bank feels that until you're through this period, it might be better if we had a representative on your board.'
'A representative?' Freeman repeated.
'Namely myself,' Nelson said.
'Let me get this straight,' Freeman said. 'We have to report to you each month, and you want a seat on the board?'
'In a purely non-executive capacity,' Nelson added. 'You'll still be running the company. I'll just be ...'
'Interfering ...' Anderson interrupted.
'... keeping an eye on things. Looking out for the bank's interests,' Nelson finished. 'I hope you'll come to see me as an asset to your management team.'
'Do we have a choice?' Freeman asked, but he could see from the look of anguish on Walter's face that he didn't.
'I understand the board meets next Thursday at three o'clock,' Nelson said. 'I'll see you then.'
Freeman felt like a schoolboy being
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