Page 76 of Nash Falls
“Clearly money laundering on an impressive scale,” said Nash. “And Steers obviously has other partners she’s working with.”
Morris looked impressed. “That’s good, Mr. Nash, really good. This is far more than we’ve ever gotten from anyone.”
“That’s not all. Have you ever considered that in addition to Rhett,BartonTemple is also involved with Victoria Steers?”
Braxton said, “We had obviously considered that, but couldn’t find a connection, or any proof.”
Morris added, “What makes you think otherwise?”
“Quite frankly, having known and worked with him for a long time, I know that while Rhett is smarter than people give him credit for and can think fast on his feet, especially when cornered, he’s not focused, disciplined, or savvy enough to have pulled this off alone.Nor do I think someone as intelligent as you say Victoria Steers is would approach him to do business. He’s just too reckless. I believe that foundation had to be laid through the father who then passed off the daily grind work to the son. For all I know Rhett doesn’t even know his father is involved. It could all be backroom dealing. And Rhettisthe sort of person who could be manipulated into something like this. And while Rhett plays tough, a woman like I think Steers is could easily manipulate him.”
Braxton said, “Remember, Reed, I mentioned that possibility a while ago.”
Morris said, “But Barton Temple is a billionaire. Why would he partner with Steers?”
Nash said, “Well, Rhett is rich, too. So why wouldhe? And it’s easier to appear to be a billionaire than it used to be. And while I’m not denying that Barton was wealthy in the past, there was no guarantee that he still was when he ran into Steers.”
“How so?” said Morris. “He was on all the ‘most wealthy’ lists. I know those are subjective to a certain extent, but you can’t fudge everything. You have to have some big bucks somewhere to qualify.”
Nash nodded and said, “People inflate the value of their assets, particularly when you get away from those whose wealth is tied to publicly traded stock that is easily verifiable, like Bill Gates, Larry Ellison, Warren Buffett, and the like. Barring that, people make assumptions. They often let past wealth levels dictate future assessments of riches.”
Braxton interjected, “And Barton Temple has hundreds of legitimate companies for Steers to work through, while his son just has Sybaritic.”
“Do you have anyproofthat Barton is involved?” asked Morris.
Nash brought up another screen on the laptop. “Because Sybaritic is one of his companies, profits and losses flow from it into Barton’s other orgs, which have blended ownership interests in Sybaritic. For that reason I had a slightly open doorway into the financial goings-on of his other businesses. From that I was able to wrangle data on him from as far back as nearly twenty years ago.”
“Okay, what did that data tell you?” asked Morris.
“In 2008 he was legitimately worth at least six billion dollars. But 2009 was a catastrophic year for the markets and most businesses in general. The world was in a recession, and the U.S. markets plummeted. The Dow slumped to around 6,000. To give you some context, it started out this year at around 44,000.”
“And how did Barton Temple fare with the 2009 recession?” asked Braxton.
“Terribly. At the time I was in a junior role at Sybaritic. I remember losses taken on assets, assets entirely written off, some severe cost-cutting measures, job layoffs, reduced salaries and bonuses. I thought nothing more of it untilyoucame into my life.”
“Glad I could prompt you to expand your horizons,” said Morris sarcastically.
“Barton’s company structure is very hierarchical. At the top of the pyramid is the mother ship, BT Holdings. Stands for ‘Barton Temple,’ of course, because he has to have his name on everything. Now between 2009 and 2011, BT’s cash flow went fully into negative territory. By the tune of well over a billion dollars. Commercial real estate also took a huge hit, and he had enormous, leveraged positions in that sector, many with personal guarantees attached. Dozens of his companies declared bankruptcy. His profits vanished and along with it his free cash flow so he could no longer service his debts. Subsequently, loans were called in, he couldn’t find new lenders to take out the old debt, and, most ominously, his personal guarantees were triggered. The result was his entire empire was imploding.”
“How the hell did you find out all that so fast?” Morris wanted to know. “We did some digging and our guys couldn’t make a dent. It was just too complicated, they said, and there were parts of his business they couldn’t get into at all.”
“When I became a board member at Sybaritic I was given access to a lot of financial records. I’m sure it was unintended, or maybe unknown to the IT folks at Temple’s other companies, but certain passwords to review records at affiliated companies were either thesame or close enough for a simple decryption program I used to figure them out. It took me the better part of three days, and I had to run down a dozen rabbit holes and break through a few firewalls and gain entry to second and third sets of digital financial books, but I was able to piece certain things together and come up with the analysis I just provided you.”
Braxton said, “So the hammer was about to come down on Barton Temple?”
Nash brought up another screen. “Yes. And as a result Barton, over the next year or so, started off-loading assets in fire sales for pennies on the dollar to raise cash. He was so desperate he bought a bunch of layered derivatives and got hosed when they became worthless. Then he ended up selling his most valuable remaining properties, a portfolio of BT-owned buildings in New York City, to a PE firm based in Singapore.”
“But you said commercial real estate had gone into the shitter. Didn’t he lose money on the deal?” replied Braxton.
“Itwasat the very bottom of the market, so the buildings should haveonlysold for around three hundred million dollars total, leaving Barton on the hook with his personal guarantees for over seven hundred million to the banks. That would have wiped him out, and he would have been on the streets looking for a job along with everyone else. I’m sure he was desperate to avoid that fate.”
“But that’s not what happened,” said Morris. “He made it out the other end.”
“Right, because the Singapore PE firm paidthree billionfor the collection of BT properties. That allowed Barton to pay off his debts and walk away a billionaire again. His wealth has grown exponentially since then.”
Morris looked stunned. “Three billion! That’s ten times what you said the market rate was for the buildings. How is that possible?”
“If you have a buyer willing to pay, who’s going to complain? And no banks were involved. PE dollars are not regulated. Those firms make their own rules.”
