Chapter 5 - I Sold My Shares Because I Wanted a Door Dad Couldn’t Close Again
Leaving Prescott was not as simple as resigning from a job.
I owned:
18% of the company.
Dad owned:
47%.
Rebecca:
25%.
A small employee trust:
10%.
My shares had been accumulated over:
annual gifts,
one purchase,
compensation.
When I resigned, Dad wanted:
them back.
Not personally.
The company had a redemption provision allowing departing family employees to sell shares under an agreed valuation formula.
There was one problem.
Prescott had just survived:
a liquidity crisis.
It could not write me a multi-million-dollar check.
Independent valuation at the time placed my interest at approximately:
$2.28 million
after minority and transfer restrictions.
I agreed to:
$380,000 at closing
and a ten-year company redemption note for the remaining $1.9 million.
Market-rate interest.
Scheduled annual principal payments.
Nothing secret.
Nothing vindictive.
A standard way to separate ownership from a cash-constrained closely held company.
The note mattered because Dad later loved saying:
“Daniel walked away from the family business.”
Technically:
yes.
Financially:
Prescott was still buying me out.
For the first three years, payments arrived as scheduled.
Then COVID disrupted:
hospitality,
office construction,
university projects.
Prescott’s backlog dropped.
Rebecca called.
Not Dad.
“Can we defer your principal this year?”
I said yes.
Interest continued.
No penalty.
The following year, supply-chain problems created another cash crunch.
Again:
defer?
Yes.
Then the company recovered.
The note resumed.
Last year, Rebecca asked for another temporary modification because Prescott planned to purchase a competitor’s small finishing facility.
I should have said:
No.
The company could:
finance it.
Instead I said:
“If Dad thinks it’s important, fine.”
Why?
Peace.
Again.
I did not need the cash immediately.
And I still carried:
guilt
about leaving.
Every accommodation became my quiet way of telling myself:
I didn’t abandon them.
Prescott’s current remaining obligation to me was approximately:
$960,000.
Not enough to make me secretly richer than everyone.
Not enough to destroy the company if paid according to contract.
Enough that the relationship remained:
financially unfinished.
Rebecca arrived Sunday with a reason for her visit beyond family concern.
She finally said it.
“The note modification expires December thirty-first.”
“I know.”
“Dad assumed you’d extend again.”
“I haven’t been asked.”
“I’m asking.”
Emily looked at me.
Rebecca continued.
“We’re closing the finishing-facility purchase in January.”
“Then finance it.”
“The bank wants more equity in the deal.”
“So put more equity in.”
“Dad doesn’t want to.”
“That is not my problem.”
Rebecca’s face tightened.
“If you require the scheduled payment, it takes almost four hundred thousand out of free cash next year.”
“Prescott did thirty-one million in revenue.”
“Revenue isn’t cash.”
“I know how businesses work, Rebecca.”
She went quiet.
Old reflex:
cut.
Then I softened slightly.
“I’m not accelerating anything.”
“I’m not suing.”
“I’m not demanding early payoff.”
“I’m saying I am no longer automatically agreeing to defer a contract because Dad wants another acquisition.”
Rebecca looked down.
“After Thanksgiving.”
“No.”
I knew what she thought.
Punishment.
I continued.
“I decided before Thanksgiving that this was the last modification.”
She looked up.
“What?”
“My adviser has been telling me for two years to stop treating a business note like family therapy.”
Emily almost smiled.
Rebecca didn’t.
“I was going to tell you next week.”
“So Thanksgiving didn’t cause this?”
“No.”
“It changed something else.”
“What?”
I looked upstairs.
“Noah.”
Rebecca understood.
The note was business.
My son was family.
For years I had blended them.
Dad behaved badly?
Defer note.
Dad insulted me?
Still show up Sunday.
Rebecca needed liquidity?
Say yes.
Christmas came?
Forget conflict.
The result was not harmony.
It was confusion.
Everyone thought every relationship had:
automatic renewal.
May you like
It didn’t anymore.
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