CHAPTER 22

A week later, a messenger of the courts presented Mike with Barbara’s petition for divorce. The document alleged that the reason for the breakup of the marriage was that the husband of the petitioner had been mentally cruel. It further alleged that his cruelty had resulted in intolerable mental and emotional stress and anxiety for the petitioner.

Barbara moved out of the house, taking Kerri and most of the furniture to a luxurious two-bedroom apartment in north Toronto.

Mike wept. He wept because he was alone once again, because Kerri had been taken from him, because his marriage had been an enormous failure. It would be easy to blame the whole thing on Barbara, and yet he felt responsible.

After months of adversarial contact between the lawyers acting for Barbara and Mike, a settlement was concluded. It ordered that Barbara would retain custody of Kerri and be awarded all of the net proceeds from the sale of the matrimonial home, which Mike was ordered to offer for sale forthwith. It further provided for generous child support and alimony payments to Barbara. Mike was granted reasonable visitation privileges.

After their country home sold, Mike rented a one bedroom apartment close to his office and, in an attempt to forget, plunged deeper into his work.

Mike had always known that XG Petroleums walked a tightrope between success and failure. His worst fears had lately become a reality. Facing prolonged and intolerable gasoline surpluses, the refiners had decided to protect their investments in retail gasoline facilities and restore the dignity of their brands, once and for all. Until then, they had watched passively as independents proliferated in all markets, even those that had once been considered the majors’ private domain. By posting brutally competitive retail prices, the refiners moved to recapture the huge and growing price-sensitive segment of the retail gasoline market.

The outcome was massive and prolonged price wars. The enormous profits the independents had once enjoyed evaporated in a matter of weeks. For highly leveraged XG Petroleums, the fallout was immediate and massive. The only attractive feature of the company had been price competitiveness, and it had lost its edge.

The arithmetic of the new situation was ominous. If IFB retained its fifty percent interest in XG, it would lose millions. Even worse, Darcy Bell’s fifty percent interest in the company compelled him to make up fifty percent of the losses. A prolonged continuation of hyper-competitive market conditions would almost certainly bankrupt him, leaving IFB with one hundred percent of the catastrophe.

“We have the makings of a major catastrophe here, Mike,” Owen Christian declared, stomping back and forth in front of his desk. “Unless something is done about that company fast, one of us is going to be extremely embarrassed.” Christian stopped his pacing and pointed an accusing finger at Mike. “And it isn’t going to be me. I told you before and I’ll tell you again. I’m not going to be the one who takes the hit for XG. I don’t care how you do it, but I want IFB out of this deal and I want it done soon. I don’t think I have to remind you that your future is riding on how you handle it.”

Mike was torn between rage and regret, unable to express either. It was embarrassing to watch a man for whom he once had a great deal of respect covering his ass in such a pathetic, bullying manner. Christian had been delighted with the enormous gasoline volume the XG acquisition had given to IFB, and he had gloated upon announcing that the fuel oil supply of IFB had been saved. And Christian’s signature was on the acquisition proposal, the same as Mike’s. His initial inclination was to remove Christian’s teeth, but he elected instead to swallow his pride. “Thanks for the vote of confidence, Owen,” he said, gritting his teeth. “I accept the challenge.”

Christian’s face reddened. “You’re damn right you accept the challenge! You have no choice!”

“Would you mind doing me a favor?” Mike asked.

“What?”

“Tell me how much IFB is prepared to accept for its interest in XG. If I’m going to dispose of it, I need to know the ground rules.”

For decades, Darcy Bell had operated his business without having to cope with negative conditions, but now the risks he had never considered were a reality. Mike listened patiently while Bell blew off steam, condemning the majors for their incredible stupidity.

“How can they possibly make money at those prices?” he shouted. “The sons of bitches are blowing their brains out! Their fucking credit cards are costing them at least four cents a gallon, and they’re not even grossing that much on the street! They can’t be!” He paused to give Mike a questioning stare. “What’ve you got to say about this mess?”

Mike shrugged his shoulders. “Sooner or later everybody rolls snake-eyes, Darcy. It looks like it’s your turn.”

“What the hell do you mean? I didn’t even get a chance to roll the dice.”

“Would you do me a favor?” Mike asked, fully aware that Bell had frequently rolled the dice.

“Sure. What?”

“Tell me how much you want for your fifty percent of XG.”

Bell chuckled. “If you can find anyone dumb enough to pay me twenty thousand, I’ll buy your lunch.”

“Why twenty thousand?”

“To pay my fucking legals.”

Mike smiled. “Thanks. I hope we have lunch real soon.”

“Me too.”

Mike made a deliberate and obvious glance at his watch. “I’ve got to go. I have another appointment in fifteen minutes, and it’s at least half an hour away.”

“Then get the hell out of here,” Bell said with a smirk. “But don’t forget. Call me about that lunch.”

“Will do,” Mike said as he shook Bell’s hand.

“You said you wanted to talk. What about?” Fletcher asked.

“How would you like your business to get a lot bigger?”

Fletcher grinned. “Not particularly. Big isn’t necessarily beautiful. Besides, the whole thing’s in the tank right now. You know that.”

“Sure it’s in the tank, but it’s created a beautiful opportunity.”

Fletcher was immediately curious. “Tell me about it.”

“It involves XG Petroleums.”

Fletcher nodded. “I know the owner. I thought I was a high roller, but Bell makes me look like a penny-ante piker. I think he belongs in an asylum…”

Fletcher and Mike shared a grin. Then Mike leaned forward. “Were you aware that IFB owns fifty percent of XG?”

“Yup. Why?”

“Everybody wants out.”

“I’m not surprised.”

“The company can be bought for a song.”

“Who the hell would want to?”

Mike’s eyes lit up. “You and me.”

Fletcher laughed. “You and me and what bank?”

“Don’t worry about the money,” Mike said, his heart in his throat. “Leave that problem to me.”

“Okay, let’s assume you round up enough money to buy XG. What are we going to do with it? The company’s a mess. It’s unsalvageable.”

“I admit it needs some radical surgery. The company would have to be downsized, in a hurry.”

“How big is it?”

“Two hundred and eighty-four outlets in Michigan, New York, and Ontario. Only twenty-five of them make any money. The rest are dogs. They just spin volume and lose money.”

“How the hell could anyone get rid of dogs in this market?”

“It wouldn’t be easy, but it can be done. Every one of Bell’s outlets is on leased land. But if you take a good look at the lease terms, you’ll see that they’re all short, with options to renew. Most of them include options to purchase or rights of first refusal. We wouldn’t have to keep any of the dogs for longer than five years—then we just let the lease slide.”

“Well, suppose I’m interested.” Fletcher set his elbows on the table. “What kind of deal do you have in mind?”

“A lot of independents aren’t going to survive this war, Tom. The ones who do are those who own the real estate under their pumps, and they will do it by reducing their dependence on gasoline and placing more profitable businesses on contiguous property. You happen to be in that fortuitous position. I’m confident that we can do the same with XG. All of its leases on the twenty-five profitable outlets have options to purchase.”

“You really think you can find the money?”

“Yup,” Mike said. Doubt pounded his brain.

“If you do, we’ll talk again. I’m interested.”

“Great!” Mike said, grinning wide. “I’ve got to go look for the money. But you might want to look at this in your spare time.” He removed a folder from his briefcase and gave it to Fletcher. “It contains a complete list of XG’s properties, their addresses, and their individual financial statements. Don’t waste your time looking at the dogs. Look at the profitable outlets. Some of them are amazing.”

Fletcher put on his reading glasses, scanned the contents of the folder, and began to process the equation of Mike’s proposition. Even if the XG deal was only marginally attractive, his instinct prodded him to participate. Mike understood the gasoline business and the players in it—if the gas wars continued, his cooperation would be invaluable. He glanced at the adjacent window over his glasses and grinned. “All of a sudden, I feel like a kid again.”