“Before anyone talks, I need to establish something.”
She looked toward the financial officer.
“I represent the investment group.”
“Not you.”
“Not the company.”
“Not the board.”
“Anything you tell us may be used in evaluating the investment and may eventually need to be disclosed to regulators, law enforcement, the board, or other parties depending on legal obligations.”
The financial officer nodded.
“Do you understand?”
“Yes.”
“Do you have personal counsel?”
“No.”
“Do you want one?”
He thought.
“No.”
The attorney leaned forward.
“You may change your mind.”
“I understand.”
“Then tell us why you contacted her.”
The financial officer clasped both hands together.
He looked at the Black investor.
“I thought the deal would close before anyone understood the full exposure.”
She said nothing.
The attorney asked:
“What exposure?”
“Customer guarantees.”
“How much?”
“At least two hundred eighty million.”
The investor’s expression did not change.
The lawyer’s did.
“Guaranteed what?”
“Pricing.”
“For how long?”
“Four years.”
“In writing?”
“Yes.”
“Disclosed?”
“No.”
The attorney looked toward the investor.
She remained still.
The chief financial officer continued quickly.
“There are also retirement obligations.”
“How much?”
“Possibly ninety million.”
“Possibly?”
“Actuarial dispute.”
“And?”
The financial officer swallowed.
“Environmental reserve.”
The investor finally spoke.
“How much?”
“I don't know.”
She stared.
“You are chief financial officer.”
“I know.”
“You don’t know?”
“Legal controlled it.”
Outside counsel asked:
“Potentially material?”
“Yes.”
“How material?”
“Could be fifty million.”
The Black investor slowly sat back.
The acquisition model had already been tight.
Add hundreds of millions in undisclosed liabilities and the entire valuation changed.
Her anger at the chief executive became something colder.
“Who decided not to disclose?”
The financial officer looked toward the recorder.
Then:
“He did.”
“The CEO?”
“Yes.”
“Alone?”
“No.”
“Who else?”
“I participated.”
Good.
At least he said it.
The investor asked:
“What did you do?”
“I signed the diligence certification.”
Silence.
The attorney’s pen stopped moving.
The financial officer continued.
“I certified that all material obligations had been disclosed.”
“Knowing they had not?”
“Yes.”
The investor looked toward the window.
For a moment nobody spoke.
Then she asked:
“Why?”
The financial officer gave the answer people always gave when there were too many real answers.