Chapter 8

Tuesday evening, Leon and I resumed working out. I felt sluggish after a week of little exercising and lots of holiday overeating. Ponder walked while Leon and I jogged. We decided to try to exercise late every afternoon and early in the morning.

Leon said, "Let's start slowly and add a little to the pace every day. After we're loose, twenty minutes exercise will be enough."

We walked to the PT path the Navy used behind the gym. It was the right distance from the duplex to the path to get loose and to cool down on the way back. The inclines on different parts of the path and its soft surface made the path ideal.

After I exercised, cleaned up and ate breakfast Wednesday morning, I went to the bayhouse. Will met me in the office in the building next to the bayhouse, he asked, "How did the interview go?"

"I thought it went well, but the people on the committee were hard to read. If I'm admitted, I wouldn't start until the fall."

Will said, "Brooke and I talked about when we should return to Roselawns; we're going back right after Christmas. We'll stay through Christmas for Grandfather. I think it'll be as safe to go back then as it ever will be. I want to be back for the close of the year. It's our busiest time and lots of important decisions are made then."

I nodded. I knew it was the best Brooke could get from Will.

He continued. "While I've been here, I've been checking out insurance companies. Some of the older ones down here are treasure troves of undervalued assets from depression acquisitions. I've had the W & R staff look at the major holders of First National stock. We identified a couple of very interesting opportunities: Jefferson Life in Birmingham and an Alabama wholly owned sub of Peachtree Life in Atlanta. They own more than twenty percent of the stock in First National. The find was that they hold another fifteen percent in convertible bonds and hold options for ten percent. Jefferson and Peachtree own controlling interest of several of the major papers and radio/television stations in Alabama. Gannett is sniffing around newspapers, but they're concentrating on Florida right now.

"We have several potential deals, which we could do, but only if you're staying in Alabama. The net cost to acquire Peachtree and Jefferson should be between fifteen million on the low side, and a hundred million on the high side. The net cost will depend on how much of the assets we strip and sell, and what we can get for the stripped assets and the stripped insurance companies. I wouldn't do the deal except to acquire the bank. The newspapers, radio, and TV stations make sense only to advertize the bank. The newspapers have a market, but the TV and radio stations are too small market to be of interest to major players, because of restrictions on the number of TV and radio stations a company can have. Since First National's stock restrictions require Alabama residency, you have to decide if you're staying."

I responded, "If I get in law school and Grandfather stays here, I'm staying. If not, I'm going back to New York, and I'm probably not returning."

He nodded. "I know Grandfather is disappointed in me. Does he want you to come back and keep tabs on me?"

"We haven't discussed that. I want to be close to him and he wants me in law school as soon as possible. I think he would prefer that I start a law school in the City in January. We both want you to be more careful and to stay away from the mob. I won't get involved in anything as risky as last winter."

Will bristled, "We've always had to deal with the mob. Lincoln Center is up to its eyeballs in the mob. Our construction and real estate operations have to deal with the mob all the time. You more than doubled your capital and investments accounts in the winter."

I said, "You know what I mean. You keep going like you've been and you'll get yourself killed."

He angrily said, "And you wouldn't forgive me if something else happened to Brooke."

I looked him straight in the eyes. "You got that right." I didn't look away.

He nodded and softened. "I appreciate all you did for her, for us. She told me how you comforted her. I know nothing improper happened between you ... I promise to be very careful."

I nodded. Will didn't back down often, but we both knew this was one time he had.

Will said, "That said; while I think we could work together, I still think it might be better for both of us, if we had complimentary, but different areas of responsibility and that you were not in the City."

"I agree; but understand, I'll do what Grandfather asks."

He said, "Understood."

He broke eye contact and then said, "Back to the insurance companies. Alabama cities are really small. There aren't many of any size; only five have a population of above fifty thousand. Jefferson owns AM/FM stations in all five of the largest markets. Peachtree owns several small town newspapers and radio stations, and the Birmingham News and a Birmingham television station. Jefferson owns WAPI AM/FM/ television; but that's all in Birmingham. Still, Alabama's a very small market. Tennessee is a more interesting market and there's more interesting plays there. Nashville is a bigger market than all of Alabama."

I said, "I'm not really interested in Tennessee."

Will said, "I've been looking into entertainment/media plays. While looking at insurance companies, I found The National Life & Accident Insurance Company very interesting. It doesn't have anything related to First National, but they have some really interesting assets. They have strong country music radio stations in Nashville, Knoxville, Chattanooga, Jackson, Bristol, and Shreveport."

I asked, "Why Shreveport? Isn't it in Louisiana? And Jackson's in Mississippi."

"This Jackson is in Tennessee, it's about fifty thousand population and midway between Nashville and Memphis. KWKH in Shreveport, Louisiana was the home of the Louisiana Hayride. 'The Louisiana Hayride radio program was broadcast from the Municipal Auditorium in Shreveport. It and the Barndance from WLS in Chicago were the main competition for the Grand Ole Opry. Country music at WLS didn't catch on like it did at WSM in Nashville, and WLS is a pop station now. The Hayride was the springboard to fame for many country music stars including Hank Williams, Slim Whitman, Webb Pierce, Jim Reeves, Johnny Horton, Faron Young, Floyd Cramer, Kitty Wells, Johnny Cash and George Jones. Many of the Hayride regulars were hugely popular and toured to good sized crowds in the Louisiana, Arkansas and Texas region. And of course, the Hayride was Elvis' springboard to fame. It covers a lot of the 'western' in country-western and the honky-tonk segment. It's an important link with the major western performers.

"The National Life & Accident Insurance Company owns WSM in Nashville and started the Grand Ole Opry. The Grand Ole Opry and the Louisiana Hayride were 'the' two national country music programs. Beside WSM, National Life owns the radio station WOPI in Bristol, where the Carter Family, along with Jimmie Rodgers, started the broadcasting of country music. It's the history and present of country music. WSM's clear signal covers the South and the Opry is heard on WSM all over the South. W & R can have a very lucrative practice with country-western musicians and linking them to the county fairs. It's a gold mine."

I nodded.

Will said, "I've about got everything in place to acquire the National Life & Accident Insurance Company using mostly the cash in your W & R capital account. After National Life is acquired, W & R will issue bonds and replenish your capital account. You will acquire Jefferson and Peachtree from cash in your Jenkins trust investment account. The Lauders are buying Mississippi newspapers, television and radio stations. We can't commingle the financing because of FCC rules on station limitation. You also have a sizeable off-shore balance from last winter's shorting activities. You can probably cover the acquisition from your winter gains, but we want to use that money to purchase junk bonds. After you acquire Peachtree, we will issue junk bonds that your off-shore accounts will buy. Peachtree will redeem all the bonds except the ones issued to you in a reverse-order redemption. Since we don't plan to guarantee a redemption premium, the junk bonds will carry a high interest rate. As long as Peachtree breaks even, you're in good shape. The interest payments will really be a disguised dividend, but it will be tax deductible to Peachtree and non-taxable to your off-shore account. W & R will initially use an off-shore country with a favorable tax treaty and trust ownership to escape the thirty percent withholding rule. W & R is a master at these kinds of transfers. Most of these are quick in-and-out transaction at W & R; your trust accounts are different, as you keep assets. If we need extra money, Peachtree will make a non-junk bond issue. We'll do the same after you get control of First National."

I asked, "What do we know about country music or running country music radio stations?"

Will said, "We'll have a top country music man set up the programming for all the stations. It'll work. And we'll have most of the larger stations we need to cover Tennessee and Alabama when we take over the three insurance companies. We'll have more than sufficient cash flow to service any bond debt."

I asked, "How much of the acquisition cost for the Jefferson and Peachtree insurance companies is cash and how much is my money?"

"All of it until we get control of the Alabama stations and sell the affiliated newspapers and I have time to issue bonds. With the National Life & Accident Insurance Company's stations and the options I have for radio stations, we'll have a dominant position in country music. I'll have WSM television, their clear channel radio station that broadcasts over most of the south and eastern half of the nation, as well as a statewide Tennessee radio network. You'll have a statewide network for Alabama. Hub and Beau are going for statewide television coverage in Mississippi with coverage fof six cities: Greenville, Jackson, Gulfport, Meridian, Hattiesburg and Tupelo from five stations. Hub's got Biloxi-Gulfport-Pascagoula and Meridian stations now. He has secure options in place for the other newspapers that include the television and radio stations. Hub and Beau plan to keep everything. Through mergers and reorganizations, Lib and Hub are trading Lib's shipbuilding interests in Pascagoula, for the newspaper and media outlets, through a tax-free General Utilities reorganization. The media company better fits Beau's banking interests. Hub is keeping the Lauderdale's agricultural, forestry and paper operations as separate entities. When Beau gets out of law school, he will take over everything but the agricultural related companies of Hub's. Hub should have the media company and his Meridian businesses setup and ready for Beau, except for the investment banking segment that Beau will setup."

I asked, "Aren't you afraid of the FCC going after you for affiliated ownership?"

"They don't care at all about Alabama and Mississippi, and not much more about Tennessee. I already have FCC staff clearance for everything. All of the Alabama and Mississippi stations combined don't have the market of your Paterson station in the Manhattan metropolitan area. Hub can get away with the rule against radio and TV stations in the same market by merging them in with his Meridian stations. WSM is the only radio-TV station combination in Tennessee and it was grandfathered as an existing combination. Doing the deal all turns on whether you're staying in Alabama."

I said, "I'd be a lot more comfortable if I knew more about radio stations. I don't even like country music! I bought the country station in Paterson, New Jersey, because it was a bargain; that it had a country format was a coincidence. I thought about having the FM part become an all night jazz FM station."

Will said, "Country music is a gold mine. It's demographics and market are several orders of magnitude better than jazz. I'm not worried about country stations, they will work; I'm more worried about getting more than fifty percent of First National stock. For all this to be worthwhile you need First National; otherwise there is little reason for you to stay here. We need to close the portion related to acquisition of the insurance companies and the media before the end of the year. W & R has been working around the clock to get this deal in place. The tax law is changing on mergers, acquisition and reorganizations; there is a statutory repeal of General Utilities on New Year's. And new purchases of newspaper-television station combinations in the same market are going to be prohibited. My greatest fear is that First National is going to realize that they are our real target. One thing that should help disguise that our target is First National is that I plan to keep National Life & Accident Insurance Company and issue bonds to pay the acquisition costs."

I said, "This is really complicated."

Will said, "I've done nothing but work on the details of this deal since I came down. It's a good thing; I would've gone nuts doing nothing here. The bottom line is that your radio stations should generate enough cash flow to make it on their own. We have secure options for everything. I'm waiting on you to decide if you staying before I pull the trigger."

I feel very uneasy about this radio business, especially country music radio. I'm almost ready to go back to the City, go to law school, and take my place at the law firm and Jenkins Bank. I would enjoy being active at the Lincoln Center, become a part of the Broadway investors group, maybe even become a producer. With Miles as a client and Professor Jack's contacts, I'd be welcome around the jazz clubs. I could work with the jazz practice at W & R and the law firm. Working at the firm and bank in the City is almost a sure income thing. It wouldn't be a totally bad thing if the University Law School turned me down for next year. To use Will's term, the bottom line is that the income from my off-shore trusts provides more income than I need to live very comfortably in the City, especially since I can live in Grandfather's apartment building, which is in a great location near Lincoln Center.

As I closed with Will, I said, "We should know soon."

His reply was, "The sooner the better."

I had a very hard time getting to sleep Wednesday night. I couldn't get thoughts of going back to the City out of my mind. I don't really have a girlfriend; not someone like Brooke. I like Peggy, but something's missing in the chemistry. It's probably because of her boyfriend. She is pretty and I love tall, muscular women. Karen is flawed too. I'm not sure what it is with her. She isn't able to give herself, or she doesn't like me well enough to give herself to me. And her background isn't very much like mine. I can't see her fitting in a Roselawns' setting. I don't know if she even wants children or if she would feel uncomfortable with me because she and Beau hooked up and her designs on him didn't work.

I'd really like to find someone like Brooke. Maybe an Eastern woman would be a better match. Brooke could help scout women for me. Before the incident, she'd volunteered, really almost pestered, me to let her find me suitable women. I'm more likely to find a woman like Brooke back East, that down here.

I really couldn't sleep. After a lot of tossing and turning, I came back to a recurring disturbing thought, I'm not at all sure the problem is the women; I maybe the one with the fatal flaw. This summer, I learned to like the City. I may miss the City too much to live in Alabama now. This summer was an eye opener. It makes me sick to think I'd be trading jazz for country music. But the mob and what happened to Brooke are also the City. And I'm not that crazy about the crowds and all those people, but I could make it work.

After early morning exercise Thursday, I checked the mail. Summerdale had its own post office. The Post Office delivered a sack of mail to the day room very early in the morning. The mail was put up first thing after breakfast. When I checked, there was nothing from the University.

I went back to the duplex, where I talked on the phone with Thornton, and then with Dorothy. I talked with Henley about progress on the securities expert system program. After I finished with them, I drove to Westminster Village and ate lunch with Grandfather and his friends. After lunch, I went to the bayhouse, but I could see that Will was too busy to talk. I went with Brooke, when she took Nicole to the pediatrician for a well baby visit, and then went back to Summerdale.

I was marking time until the letter from the University arrived. I had very mixed emotions about acceptance. I doubt if I would have gone through with it except Grandfather wanted a quick commitment. After I exercised with Leon, I came back to Fairhope, where I ate supper and went to a movie with Ania. She invited me to stay the night and I did. I hadn't had sex since Brooke's rape and since Ania only had sex with me, neither of us had had sex in some time. I wasn't in top form; it was more relief than anything. While the sex wasn't great, I enjoyed sleeping spooned against her.

I left from Ania's house very early in the morning for Summerdale. Leon and I exercised and had breakfast at the dining hall. After breakfast, I went back to the day room with the sergeant-major. He went thought the mail sack and gave me a fat envelope from the Law School. I knew it was an acceptance. I felt fate had decided for me. I had very mixed feelings.

I called Grandfather, then Will with news of the acceptance. After I talked with Will, I called Thornton. Thornton was very happy and excited for me, which helped my spirits a lot. I went to the bayhouse, where I signed several papers for Will. The papers authorized the pledging of my trust funds for the acquisition of the insurance companies. Will loved deals. I could tell he was relieved I was staying in Alabama.

Brooke was genuinely excited for me. She hugged me and said, "I would've liked for you to be in New York, but I think it's best for you to be away from the City. You have a feel for the people here and they respond to you. I want you to promise you'll not get too busy to come up often."

We hugged and I left for Westminster Village. Grandfather wanted to look at the admissions letter and information.

I gave Grandfather the letter and packet from the University. Grandfather read them and then called the New York Bar Association. After he talked with the bar, he called the Admissions Dean at the University of Alabama Law School. Grandfather thanked him, and asked if he minded helping me with the requirements the New York Bar had, so that Grandfather could put shares of the law firm in trust for me.

Grandfather seemed pleased with his conversation with the Dean.

Grandfather said to me, "I want you to go to Tuscaloosa today and enroll in classes for the fall. Pay the full tuition and fees. The Dean was very nice and accommodating. For me to transfer shares of the law firm in trust for you, the Bar had several requirements. The main one was that you had to be enrolled, not just accepted. Bring back the receipts and your enrollment papers. Call me when it's complete. Don't leave until after I've talked with the New York Bar and Thornton has taken care of everything."

I responded, "I'll fly up to Tuscaloosa now."

Grandfather said, "Get two certified checks. Have different ones for the amounts listed on the form to hold your place and to take care of registration costs. Take a few thousand in cash, just in case there are other fees. Make sure everything is fully paid; not deposits."

I nodded.

Grandfather said, "Thornton has my new estate plan papers at the firm. Please don't ask him about them. I don't want to put Thornton in an awkward position, when he executes the trusts. Being able to put the shares of the firm in a trust is important to my estate plan. He'll do it today."

"I won't ask Thornton."

Grandfather said, "This is a load off my mind. Go, but be careful flying."

First National had a small branch office in the main building of WV. We got certified checks for the amounts the admissions letter said I needed. I got a thousand in cash from the bank. I kept five thousand in my 'emergency' kit behind a panel in the plane's luggage compartment.

Grandfather reserved a large table for us for supper. I decided I wanted him to meet Peggy and to see Freddy. I was worried Grandfather might let down. He seemed to be in a big hurry to get this share transfer done and I was worried he was 'getting his affairs in order'.

At the Fairhope airport, I called to Tuscaloosa for Peggy, but she was in class. I left a message at Tri-Delt for her. I told her it was very important for us to come down here and asked her to please come down with me to meet Grandfather tonight. In the message I said, I could bring her back after we had supper here.

I got Dorothy on the phone. "I got my acceptance letter for law school. I'd really like for you and Freddy to come back to Westminster Village with me this afternoon. Please ask Fred, but I need for you and Freddy to come. It's very important to me."

Dorothy didn't ask for a reason. She said, "I'll call Fred. What time do you want to leave?"

"I'd like to leave around three. I'll probably fly you back after supper."

I gave her Peggy's phone number and asked her to call her and explain that it was important to me that she come.

I thought there was a good chance Peggy would come. Grandfather had met Karen, when she came to my house in Tuscaloosa with Beau and again briefly, when she was at Juilliard. I wanted to get his impression of Peggy.

I was wheels up at ten-thirty from Fairhope. When I got to the airfield the University used, Dorothy had left a message with my answering service. I heard her taped message, "Peggy has an exam at two and will be ready to go by three-thirty. Pick her up at her sorority house. Fred, Freddy, and I will meet you at the University airfield. I'm going to be busy at the hair dresser until then."

I took a cab from the airfield to Farrah Hall. I was waiting for the Admissions Dean when he returned from lunch. At one, we went to the bursar's office and I paid my fees. The Dean had all the forms and documents Grandfather had requested, and he had them in triplicate. The Bursar was very nice. He did them in triplicate and notarized all the documents. Before we left his office, I called Grandfather. We double checked the list of documents. I paid to have the documents sent special delivery and registered mail to the New York Bar from the University's Post Office. I knew the Bar preferred the documents come directly from the University.