Chapter 9

Prologue 9

So my trust was making money in two ways now through investments, either my own or from commission for others.

But that isn’t where the majority of my trust fund came from.

No that came about through a completely different sort of investment.

It all came about from a discussion I overheard during a school dinner.

On another table, one of the kids was talking to his friends about his dad’s company.

It was in serious trouble financially, it was strange since the product was sound. Sales were good, but still the company was likely to have to lay staff off soon, in order to try and reduce costs. The kid’s dad was worried he might be one of those let go, since he worked in the research and development department. They were likely to be the first to go, since they weren’t required to maintain the sales, only working on new products.

Nothing too much in that statement, you would think to make me pay attention, that was when he told his friends about what his dad was really upset about. His dad had come up with a unique improvement idea, which might revolutionize the company’s product. This in turn would gain them a much bigger cut of the current market.

I was a little wary of the information he was giving out. Since he was likely to have been taken in by his dads over enthusiasm and been embellishing the facts himself.

Anyway it was worth looking into. I had Andy do a background study on the company financials, the company’s product and what else he could find out about the kids’ dad.

It took him some time to collect all the information I wanted. But when he did come back to me, the information proved the kid had been telling the truth.

The information proved that the family run business was in financial trouble. The problem started when the original founder retired, he gave his two sons enough shares for them to have joint control. Unfortunately they fought so much between themselves trying to take complete control. That the decisions made were not for the benefit of the company, but to improve the standing of the one son against the other.

What the kid’s father had said was also correct; there were rumors of great new developments in the works. The problem was they probably wouldn’t come to fruition, since the company didn’t have the money to invest in the designs, being much more likely to fold completely.

I decided that it was worth pursuing, but I couldn’t do it myself since I wouldn’t be taken seriously. So I got Andy to do it on my trusts behalf, the first thing he did was to approach the retired owner.

He did that to explain the problems that the company was now having, that he had an investor who would be willing to put money into the company. But he would only be willing to invest for a percentage of the ownership.

I wanted 25%, this was pretty high, and I expected the retired owner to counter my offer with a smaller percentage amount. But I was very surprised when Andy told me that he had agreed. Saying he felt that was reasonable for the amount being invested.

The retired father was shocked at what had happened to the company. The sons had kept him apart from what was happening since he passed over ownership. He still owned a large amount of the stock; he could also command enough shareholders to retake control.

Andy was aware of this, it was the main reason we had thought the company could be saved. If the retired father retook control, the problems would end and the company could get back to making money again.

There was a stipulation to my investment though. I wanted an independent engineering firm to look into the research going on. The engineer brought in would have to sign a non-disclosure agreement, so he couldn’t steal the idea. But I wanted a fresh mind to tell us if the designs would work before I agreed.

This was agreed upon quickly, once the old man had realized the state of the company affairs. He had straight away worked out that he would need investment quickly or the company would still fold before the design could be incorporated.

The company already had a large loan from a bank, so they couldn’t expect any further money from that avenue. The repayments on that loan, turned out to be the leading issue that was making the company lose money. They hadn’t worked out the repayment plan very well, the payment on the loan was more than the profit the company was making at present.

So the engineer and new/old owner went to the company premises to take control. Once he had the majority shareholders backing to retake control, he forced the sons to give up a large portion of their shares in order to provide me with my required percentage in the company.

The engineer looked over the research designs and agreed that they were feasible, so I agreed on the required investment of $10,000,000. This was a large block of by trust, but not enough to stop me from functioning. I also saw a huge potential return if the design was introduced to the market.

The engineer was so impressed with the research that he asked to be involved in its development. The owner agreed and he was taken on with the company.

He immediately proved he was worth hiring. He had been the best qualified engineer recommended to Andy. The engineer had been between jobs, just doing some consulting work to keep his hands in the business. He was so impressed with the research being done on exciting new technology, he wanted to be part of it. As soon as he started working on the design plans, he discovered that with a few modifications the design could be used in a completely different market.

He took over the new design, working on it exclusively. He actually got that design done and a working prototype ready to be sent to the patent office, before the company had finished working out the kinks in their own product improvement.

The patent office confirmed its originality and authenticity. Once the engineer had that, he went back to Andy, who he knew had a good deal of contacts. The company couldn’t use the new design, but several major corporations would kill to use this new design.

Andy approached one of the corporations who would benefit most from having the patent rights for its exclusive use. They would be given a secret showing of what the design could do for their product.

Once they had seen the prototype. They realized how much of the market the company using the design would command, so they immediately stated their interest in buying the patent.