Page 6 of Sunset Tides
“Harry didn’t let it get him down, but he decided he wanted to spend his remaining time doing something he’d always dreamed of: touring the world’s farms.”
Lucy laughed. “You’re kidding. That was his dream?”
She nodded. “Oh yes. He’d traveled quite a bit in his life, but it was always limited because he worked so much on the farm. He visited Scotland to tour whiskey distilleries, and spent some time in French vineyards and wineries. It was his favorite thing to do. Back when he was young, in his fifties, he’d gotten to know some of the world’s top apple breeders. He talked about it all the time.”
“Apple breeding! That’s a thing?”
“Yes,” Fiona said. “How else do you think we created the best apples?”
Lucy had learned the names of their top varieties, but she hadn’t thought much of it. Apparently, apples were a serious science.
Fiona continued. “But Harry wanted to do more, and for that reason, he was in a hurry to sell the farm.”
“To this Carriageway Holdings company?”
“Yes. I don’t blame him for it,” Fiona said. “I really don’t. He put the farm up for sale, and the offers he got were too low. At the time, Grindstone was bringing in about fifty thousand dollars of profit every year.”
Lucy paused. She knew farms typically had low profit margins, which was wild considering how hard the farmers worked year-round. “That’s pretty good, isn’t it?”
“For a farm, yes, but Harry was never money-focused. He’d hardly made a profit most years before that, so there just wasn’t much interest in buying the farm. He got on offer for about double the farm’s yearly profit. It wasn’t bad, exactly, but it wasn’t enough to pay for his treatments and traveling.”
“I see.”
“Then, out of the blue, Carriageway Holdings approached him. They offered to pay one and a halfmilliondollars for the farm.”
Lucy’s mouth popped open. “Whoa. That’s awesome.” She paused. “What was the catch?”
“That was what I didn’t understand. I told Harry I was worried that they had plans to do something drastic, like sell the land for development, but he assured me that wasn’t the case. He signed the deal, and off he went.”
Lucy frowned. “I’m still not getting what happened.”
Fiona smiled, finishing her juice. “It wasn’t obvious at first. It all seemed fine until the first payments were due.”
“What payments?”
“Carriageway is what they call a private equity firm. They’re not farm people – Rob was right about that. They’re business people. They bought the farm with something called a leveraged buyout.”
Leveraged buyout. That reminded her of an economics class she’d failed during her brief stint in college. Lucy could feel her eyes glazing over. “I’m sorry, I’m going to try really hard to listen to you, but it already feels like I’m losing that battle.”
Fiona laughed. “It took me a while to understand this whole thing. I think they make it complicated on purpose so regular people can’t figure out what’s going on.”
“Rude.”
“I know.” Fiona stood up and picked up a marker for the dry erase board behind her desk. “Basically, the reason Carriageway were able to offer so much money was because they went to a bank and said, ‘Hey, we’ve got this great farm that’s bringing in fifty thousand a year, but with us in charge, it’ll bring in half a million a year.’”
“What!” Lucy shook her head. “Don’t tell me the bank believed them.”
“Oh, not only did they believe them, they gave them a loan for one and a half million dollars.”
Lucy let out a huff. She didn’t know much about farming, but she knew Carriageway’s proposal made no sense. That sort of profit was unheard of. “That’s insane.”
“I know. Carriageway listed all of Grindstone’s assets – the distillery, the land, the orchards – and put them on the line for the loan, like collateral. Because of all the collateral, Carriageway only had to pay three hundred thousand dollars for the whole deal.”
Lucy frowned. “What’s that, like twenty percent? Like a mortgage?”
“Exactly, only better, because they got to keep all of the profits that Grindstone Farm made, year after year. Even though we increased our profits to over two hundred thousand dollars this year – ”
“Which is incredible.”
