Chapter 5 - Northstar Was Worth Buying
The most inconvenient fact was that Jason might have been right about the deal.
At least partly.
Independent advisers reviewed Northstar without Jason or Claire participating.
The company was attractive.
Strong locations.
Underperforming assets that Bennett Lakeshore could potentially improve.
Good brand-recognition opportunity.
The environmental problems were manageable.
Claire had overstated them initially.
Not invented.
Overstated.
Then renovation costs.
Claire was right.
Northstar’s sellers estimated:
$84 million.
Independent engineering estimated closer to:
$112 million.
The difference mattered.
Debt assumptions?
Again, Claire had a point.
Jason’s model used aggressive refinancing expectations.
Possible.
Not prudent as a base case.
So the acquisition was neither:
brilliant
nor:
terrible.
It depended on price.
Then the board asked an obvious question.
Why was Jason pushing so hard to close before year-end?
Compensation.
His executive contract included a disclosed transaction bonus if he successfully completed an acquisition above a specified size.
Potential bonus:
approximately $1.8 million.
Claire knew.
The compensation committee knew.
No secret.
Then investigators found something:
not disclosed.
An email from Northstar CEO Peter Caldwell to Jason.
Once we’re under Bennett, I still think there’s an opportunity for you to run the combined resort platform. We can structure something meaningful on equity if Robert supports it.
Jason replied:
That is interesting. Let’s get the deal signed before we discuss my role formally.
Claire stared at the email.
Not a bribe.
Not a signed contract.
But material.
If Jason expected a larger job and possible future equity arrangement after the acquisition, his enthusiasm for the transaction could be personally influenced.
He had not told the special committee.
When asked why, Jason said:
“It was speculative.”
Linda Parker answered:
“So was your allegation that Claire’s behavior made her unfit for the committee.”
That landed.
Then another discovery.
Jason had told Peter Caldwell privately:
Claire is the main internal obstacle. I’m working on that.
Working on that.
Claire read the sentence again.
For months she had wondered whether Jason was attacking her business judgment because their marriage was deteriorating.
Now she saw the opposite possibility.
May you like
Maybe their marriage had become another battlefield because Claire stood between Jason and the professional future he wanted.
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