The Prodigal Daughter (Kane & Abel 2)

Chapter

Twenty-Three

Florentyna Kane’s appointment as chairman of the Baron Group was confirmed at the board meeting the day she returned from Warsaw. Richard’s first piece of advice was that she transfer the head office of Florentyna’s from San Francisco to New York. A few days later the Kane family flew back to stay in their little home on Nob Hill for the last time. They spent the next four weeks in California making the necessary arrangements for their move, which included leaving the West Coast operation in the competent hands of their senior manager and putting Nancy Ching in overall charge of the two shops in San Francisco. When it came to saying goodbye to Bella and Claude, Florentyna assured her closest friends that she would be flying back to the Coast on a regular basis.

“Going as suddenly as you came,” said Bella.

It was only the second time she had seen Bella cry.

Once they had settled down in New York, Richard recommended that Florentyna make the shops a subsidiary of the Baron Group so that the companies could be consolidated for tax purposes. Florentyna agreed and made George Novak president for life on his sixty-fifth birthday, giving him a salary that even Abel would have considered generous. Florentyna became chairman of the Group and Richard its chief executive.

Richard found them a magnificent new home on East Sixty-fourth Street. They decided to live on the forty-second floor of the New York Baron while their new home was being decorated. William was enrolled at the fashionable Buckley school like his father before him, while Annabel went to Spence. Carol thought perhaps the time had come to look for another job, but even at the mention of the subject, Annabel would burst into tears.

Florentyna spent every waking hour learning from George how the Baron Group was run. At the end of her first year as chairman, George Novak’s private doubts about whether his kum would have the toughness necessary to run such a huge empire were entirely allayed, especially after her stand in the South on equal pay for Baron Group employees whatever their color.

“She has inherited her father’s genius,” George told Richard. “All she lacks now is experience.”

“Time will take care of that,” Richard predicted.

Richard made a full report to the board on the state of the company after Florentyna’s first year as chairman. The Group declared a profit of more than $27 million despite a heavy worldwide building schedule and the drop in the value of the dollar against most trading currencies caused by the escalating war in Vietnam. Richard then presented his ideas to the board for a comprehensive investment program for the seventies. He ended his report by recommending that this kind of program be looked into by a bank.

“Agreed,” said Florentyna, “but I still look upon you as a banker.”

“Don’t remind me,” said Richard. “But with the turnover we now generate in more than fifty currencies and the fees we pay to the many financial institutions we employ, perhaps the time has come for us to control our own bank.”

“Isn’t it nearly impossible nowadays to buy a bank outright?” asked Florentyna. “And almost as hard to fulfill the government requirements for a license to run one?”

“Yes it is, but we already own eight percent of Lester’s and we know what problems that created for my father. This time let’s turn it to our advantage. What I’d like to recommend to the board is…”

The following day Richard wrote to Jake Thomas, the chairman of Lester’s, seeking a private interview. The letter he received in reply was guarded to the point of hostility. Their secretaries agreed on a time and place for the meeting.

When Richard entered the chairman’s office, Jake Thomas rose from behind his desk and ushered him into a seat before returning to the leather chair that had been occupied by Richard’s father for more than twenty years. The bookcases were not as full nor the flowers as fresh as Richard remembered. The chairman’s greeting was formal and short, but Richard was not cowed by Thomas’s approach as he knew that he was bargaining from strength. There was no small talk.

“Mr. Thomas, I feel that as I hold eight percent of Lester’s stock and have now moved to New York, the time has come for me to take my rightful place on the board of the bank.”

It was obvious from Jake Thomas’s first words that he had anticipated what was on Richard’s mind. “I think in normal circumstances that might have been a good idea, Mr. Kane, but as the board has quite recently filled its last place perhaps the alternative would be for you to sell your stock in the bank.”

It was exactly the answer Richard had expected. “Under no circumstances would I part with my family shares, Mr. Thomas. My father built this bank up to be one of the most respected financial institutions in America, and I intend to be closely involved in its future.”

“That’s a pity, Mr. Kane, because I am sure you are aware that your father did not leave the bank in the happiest of circumstances and I feel certain we could have offered you a reasonable price for your shares.”

“Better than the price my father-in-law offered you for yours?” said Richard.

Jake Thomas’s cheeks flushed brick-red. “I see you have only come here to be destructive,” he said.

“I have often found in the past that construction must be preceded by a little destruction, Mr. Thomas.”

“I don’t think you hold enough cards to make this house tumble,” the chairman retorted.

“No one knows better than you that two percent may suffice,” said Richard.

“I can see no point in prolonging this conversation, Mr. Kane.”

“For the time being, I agree with you, but you can be sure that it will be continued in the not too distant future,” said Richard.

He rose to leave. Jake Thomas did not accept his outstretched hand.

“If that’s his attitude, we must declare war,” said Florentyna.

“Brave words,” said Richard, “but before we make our next move I want to consult my father’s old lawyer, Thaddeus Cohen. There’s nothing he doesn’t know about Lester’s. Perhaps if we combine our knowledge we can come up with something.”

Florentyna agreed. “George once told me something my father thought of doing if he failed to remove your father even when he had eight percent.”

Richard listened intently as Florentyna outlined her plan.

“Do you think that might work in this case?” she asked her husband.

“We just might pull it off, but it would be one hell of a risk.”

“We have nothing to fear but fear itself,” said Florentyna.

“Jessie, when will you learn that FDR was a politician, not a banker.”

Richard spent most of the next four days locked in consultation with Thaddeus Cohen at the city office of Cohen, Cohen, Yablons and Cohen.

“The only person who now holds eight percent of Lester’s stock is you,” he assured Richard from behind his desk. “Even Jake Thomas has only two percent. If your father had known that Thomas could only afford to hold on to Abel Rosnovski’s stock for a few days, he might well have called his bluff and held on to the chair.”

The old family lawyer leaned back, placing both hands on top of his bald head.

“That piece of information will make victory even sweeter,” said Richard. “Do you have the names of all the shareholders?”

“I’m still in possession of the names of the registered stockholders at the time that your father was the bank’s chief executive. But by now it may be so out-of-date as to be rendered virtually useless. Nevertheless, as you well know, you are entitled under state law to demand a formal inspection of the shareholders list.”

“And I can imagine how long Thomas would take to release that.”

“Around Christmas,” said Thaddeus Cohen, allowing himself a thin smile.

“What do you imagine would happen if

I called an extraordinary meeting and gave a full account of how Jake Thomas sold his own shares in order to remove my father from the board?”

“You wouldn’t gain a great deal from such an exercise apart from embarrassing a few people. Jake Thomas would see to it that the meeting was held on an inconvenient day and badly attended. He would also undoubtedly obtain a fifty percent proxy vote against any resolution you put forward. Into the bargain I suspect Mr. Thomas would use such a move by you to rewash dirty linen in public, which would only add a further stain to your father’s reputation. No, I think Mrs. Kane has come up with the best idea so far and, if I may be permitted to say so, it is typical of her father’s boldness in such matters.”

“But if we should fail?”

“I am not a betting man, but I’d back a Kane and Rosnovski against Jake Thomas any day.”

“If I agree, what would you consider to be the most propitious time to launch the bid?” asked Richard.

“April one,” Thaddeus Cohen said unhesitatingly.

“Why that date in particular?”

“Because it’s the right length of time before everyone has to file their tax returns to be fairly certain that a number of people will be in need of some spare cash.”

Richard went over the detailed plan with Thaddeus Cohen again and that night he explained it in full to Florentyna.

“How much do we stand to lose if we fail?” was her first question.

“Roughly?”

“Roughly.”

“Thirty-seven million dollars.”

“That’s pretty rough,” said Florentyna.

“We don’t exactly lose the money, but all our capital will be locked up in Lester’s stock and that would put a severe restriction on the cash flow for the rest of the Group, if we didn’t control the bank.”

“What does Mr. Cohen think of our chances of pulling the coup off?”