The First Billion

Hesitantly, Norgren laid the stack of papers on his desk. "It's only for your protection," he pleaded in an injured tone. He was short and barrel-chested, with a florid, cherubic face and curly blond hair. "Isn't it just a wee bit crazy to stuff all your money in one investment?"

"Not if it's your own company," said Gavallan. "Besides, can I tell you a secret?" He motioned the attorney closer. "That stuff about diversification? It's bullshit. Just a ruse to bump up commissions. We can't have our customers buying and holding the same stock for twenty years at a time. We'd be bankrupt by Christmas. Sector rotation, averaging in, market timing- that's the ticket. Churn and burn, Sten, that's the name of the game."

For a moment, Norgren didn't answer, and Gavallan could practically see the lawyer's analytical mind parsing over his statement, deciding whether what he said might actually be true. Then Norgren burst out, "Shut up, you bullshit artist. Sit your butt down in that chair, right now. I've got just the pen to sign your life away- a Mont Blanc that Sherry gave me for Christmas. Lousy thing cost more than my law school diploma."

Gavallan found his way to the chair and sat down. He had always hated lawyers' offices. He had only to set foot inside one for a feeling of imminent bad luck to creep into his neck and shoulders. Norgren's office was no exception, even with the Scandinavian furniture, the credenza packed with photos of blond, smiling kids, and the colorful modern art on the wall.

"Last chance," said Norgren.

"The pen, maestro."

Norgren took a beautiful onyx and gold fountain pen from his pocket and plucked off the cap. "She's all yours."

Recognizing the concern as genuine, Gavallan was flushed with a sudden fondness for the man. These days it was pretty hard to find a lawyer who gave a damn. "Thanks, man, but I know what I'm doing."

"I'm sure you do," said Norgren, a little too quietly.

The firm of Norgren, Piel, and Pine had done the majority of Black Jet's securities work for years: fairness opinions, registration statements for the SEC, legal analyses of all manner of financial instruments. At some point, Gavallan and Sten had become friends. They had dinner once a month and Gavallan took his kids sailing when the westerlies weren't too strong. Norgren had recently earned his pilot's license and was always calling Gavallan to ask his advice on one matter or another, begging him to come up with him for a short flight above the bay. Gavallan always declined politely, without offering an excuse. He hadn't taken the controls of an aircraft since the Gulf.

Gavallan spent a few moments reading through the documents. On top of the pile was a statement from Alameda Trust Corporation, granting him a second mortgage on his home in Pacific Heights in the amount of two million dollars. Beneath it were envelopes containing Gavallan's monthly bank and brokerage statements and the HUD-1 for the recent sale of his property in Montana- all the paperwork Norgren had needed to secure the loan on his behalf.

Gavallan's first action was to endorse the check made out in his name and hand it to Norgren. "You know where to deposit this."

"How much does this bring it to? North of twenty million, if I'm not mistaken?"

"Twenty-five point seven, to be exact," answered Gavallan, meeting his eye. "Don't worry, Sten, I am keeping track."

Black Jet's recent quarterly losses, combined with decreases in the value of securities the firm held for its own account and a certain fifty-million-dollar bridge loan he'd made to a less than investment grade customer, necessitated the capital injections. The Securities and Exchange Commission had strict requirements for firms underwriting new issues, especially ones valued at two billion dollars. Gavallan was not going to lose Mercury on a technicality.

"Why don't you let me make some calls," suggested Norgren. "I know some money center banks who could help out. Your reputation's sterling, Jett. You know that."

"I'm flattered, Sten, but it's hardly a good time. We're due to book our second quarterly loss in a row. We wouldn't get close to the price we deserve."

"I thought business was picking up. Markets are a helluva lot stronger than a year back. I'm sure you could get a great price- two times book at least."

Gavallan wondered if Norgren had already placed a few calls on his behalf. Black Jet's book value was close to four hundred million dollars; two times book gave the firm a value of eight hundred million. Gavallan considered the price, but the prospect of vast riches left him unfazed. And then? he mused. What happens after that? Report to a drone three thousand miles away? Sit on a beach reading paperback novels? Work on his golf game for eleven years in hopes of joining the Senior Tour? Sell? Never. The word wasn't in his vocabulary.

"The problem's overhead," said Gavallan. "Business isn't too bad. Revenues might even inch up a little over last year."