The Other Woman
(NOTE: Every story is a highly disguised composite of several actual cases. All identifying details are changed, including names, family size, industry, genders and ages. I've fictionalized them so carefully that any resemblance to a real person or family would be coincidental.)
Many families have said their Dad’s business was like a mistress: consuming his time, money, and passion. Ralph Blivin’s son and daughter suspected a flesh and blood mistress as well. I had to admit that was a plausible hypothesis.
Ralph, 74, hadn’t lived at home for several years, as his wife’s diabetes-related health problems deteriorated. “To make room for the nurses” was his ostensible reason, which Sam and Karla didn’t challenge. But they did complain as his visits to Mom became less and less frequent. Karla, of course, visited her mother daily and coordinated all the medical, home care, and household logistics. As well as her own three young children and husband, she did her share of helping Ralph when he entertained customers and suppliers.
Mom was too heavy to be moved in and out of her chair by one person alone. She also suffered from morbid depression. Karla chided her father, “She still has her mind, you know. She’s always asking me if you’re all right.”
Her brother Sam did stop by the house briefly most weekdays, on his way home. But he worked ten- to twelve-hour days, and saved the weekends for his wife and children. “We don’t think it’s good for them to see their grandmother like she is.”
Sad as it was for Mom, the Blivins had settled into an angry equilibrium. Over the years, Sam gradually took on more and more responsibility, as his father argued with him (and with me) every step of the way. I could have challenged these clients on their relations outside of the business side, but I was on shaky ground with Ralph as it was, constantly ignoring his insistence that the only succession problem was Sam’s bullheadedness.
Ever since Ralph bought his high-rise condo retreat, he’d stopped coming in every day. He still called Sam every morning as well as the CFO and plant managers about details more appropriate to a small plant owner than the CEO of a $200M company. Sam and Karla touted Ralph as a genius who started wo a nickel and built Alltech Plastics into a nationwide leader in their niche. But Sam said Ralph was now “overcompensating for his age or something,” as he pushed them to be first to adopt the newest computer-guided machinery. Sam saw competitors shrewdly waiting for the second or third generation of those innovations, saving tens of millions in costs as the prices would drop, and avoiding “Betamax commitments,” as he called them. I’d heard father and son argue over that for years, Sam citing examples of Ralph’s premature changeovers in the past. “I guess we really screwed up all those times,” Ralph said sarcastically. “It’s a wonder we got where we are.”
When they came to a Board decision, Karla’s was the third of three votes. She increasingly supported her brother’s conservatism against her father’s mania to be “first with the best.” Disrespected, Ralph accused her of turning against him “because of her mother—she blames me.”
Ralph had often said, “If you don’t want me as Chairman and CEO, it’s two against one. You can have the whole company.” At the same time, he warned Karla that Sam, who had bought an original partner’s small stake, would have 53% of the stock if the company acquired Ralph’s. Karla had no motive to participate in a buyout. Furthermore, she feared it would kill her father: “It’s his whole life.”
Yet Ralph, to her surprise and Sam’s irritation, kept offering to leave. Sam wavered. Why should he pay for Sam’s stock, then maybe have to buy his sister’s eventually too, leaving himself with the risk and her witl the nice liquid assets?
It was the “other woman”--though never acknowledged by Ralph—whose presumed existence led to a breakthrough. Karla discovered, managing Mom’s household accounts, that her father only deposited $10,000 a month—a fourth of his Alltech income. Estimating that over a million dollars were unaccounted for, she and Sam confronted Ralph. “You think we’re going to finance a $70M buyout only to have that money go out of the family?” That was the closest they ever came to suggesting they thought—knew—Dad had someone else in the picture.
But he surprised them. “My stock is marital property,” he said. “Put it in your mother’s name, I don’t care. But give me a severance, five years’ consulting at my current salary. It’s none of your business how I choose to spend that.”
Deal? Or no deal?
copyright reserved 2006, Kaye Family Business Associates, Inc.