“Because the CEO looked more frightened of what I might know than of losing the money.”
Her investment officer understood.
“I’ll call outside counsel.”
“Not the deal firm.”
Pause.
“Conflict?”
“Possibly.”
“I want fresh eyes.”
“Understood.”
She hung up.
Then another message appeared.
Unknown number.
We need to speak before you put the money back.
The investor stared.
A second message.
Do not discuss this with the CEO.
Then:
I am in the building.
She did not reply immediately.
Instead she forwarded the screenshots to her chief investment officer and outside counsel.
Then wrote:
Who are you?
The response came.
The CFO.
She looked toward the wall again.
Now the billion dollars was the smallest problem in the room.
3
The CFO entered the conference room seven minutes later.
He closed the door.
Did not sit.
The investor remained at the table.
“Your phone stays visible.”
He placed it face down.
“Fine.”
“Why are you contacting me privately?”
He looked exhausted.
“Because you were going to discover this anyway.”
“Discover what?”
He stared toward the door.
The investor’s patience shortened.
“Either speak or leave.”
The CFO sat.
“Three months ago, the CEO changed the integration assumptions for the acquisition.”
“I know.”
“No.”
He shook his head.
“You saw the version given to your diligence team.”
Her expression changed.
“What version didn’t we see?”
The CFO swallowed.
“There are side commitments.”
“To whom?”
“Two major customers.”
“What kind?”
“Price guarantees.”
“How large?”
“Potentially two hundred eighty million over four years.”
The investor became completely still.
“Those are not in the disclosure schedules.”
“No.”
“Why?”
“The CEO classified them as nonbinding commercial understandings.”
“Are they written?”
“Yes.”
“Signed?”
“Yes.”
“Then they’re commitments.”
“I know.”
She stared.
“Who else knows?”
“General counsel knows some.”
“Board?”
“Not the full exposure.”
“Bankers?”
“No.”
“My diligence team?”
“No.”
“Why are you telling me now?”
The CFO looked ashamed.
“Because I thought we could absorb it.”
“That is not your decision.”
“I know.”
“No.”
Her voice sharpened.
“You apparently don’t.”
He flinched.
She continued.
“You allowed investors to review a capital structure missing hundreds of millions in potential obligations.”
“The CEO said the customers would renegotiate after closing.”