She came for Hayley’s birthday. It was difficult to resist her entreaties, the stomping of foot and pouting. “You’re not behaving like an adult,” Caldwell commented wryly. Hayley had answered: “Would you come if I did?”
Barman met them at Vanetti’s. It was the first time she had seen him since shortly after the funeral. There was an awkwardness in theirgreetings. As though some unfinished business lay between them, and one or the other was responsible for the neglect.
“You will help us, Cad, won’t you?” Hayley asked eagerly.
“I’m willing to sign my proxy over to you.”
“We’ll need more than that.” Hayley’s voice was calm now. There was a concentration in her eyes. “We’re planning a takeover. We don’t actually havethe necessary resources. It’s going to take brains, too.” She noticed Caldwell’s smile at thisobservation. “We will have such fun!” Hayley exclaimed.
“It would help if you ran for the board,” Barman said.
“People may not like you, but at least you have the reputation of being levelheaded,” Hayley put in. “How wrong they are.”
Caldwell smiled. She stared into her plate. “All right,” she said. “I suppose the time to act has come. But you must understand that if I’m elected and we don’t have a majority, I will resign. I will not serve as a decorative minority.”
Hayley’s dimple was showing. “I love to hear you talk,” she said. Then to Barman: “You going to stake SSI out tomorrow?”
“Yes, I thought I would. It might be useful if one of you came with me.”
“Don’t look at me,” Hayley said. “I’m a working girl. I’m going to sleep all day, so I’m nice and chipper in the evening.”
Caldwell eyed her, as though examining a specimen. But she saw pain in Barman’s glance.
Their eyes met. She said: “I’ll come with you to SSI, Andy. I’ve always wondered what it was like.”
The lobby was spacious and immaculate. The floor of brown marble that shone. Large tropical plants in giant pots scattered symmetrically throughout the hall. Marble columns every so often.
Two partition walls were covered with expensive, modern, rug-like hangings. The rest was filtered glass. Barman spoke to the elegantly dressed woman behind the marble counter. “I’m Andy Barman, attorney for Caldwell and Hayley Grayne. I’d like to inquire after Hayley Grayne’s investments.”
“Just a moment, please,” the woman said. Evenher voice seemed polished. She picked up a phone and turned away so that Caldwell and Barman could not hear her. She turned back to them: “Someone will be down for you soon.”
“So this is Jimmy Skinner’s domain,” Caldwell whispered to Barman as they strolled through the hall. “Or is there someone else behind him?”
Barman shrugged. “If there is, I haven’t been able to uncover it.”
There were soft footfalls behind them. “Hello Caldwell, Mr. Barman.” His voice held a hint of irony.
Barman frowned, but she smiled. “Placid. I thought I might see you here.”
“I’m your escort,” he said, looking at Barman, “to make sure you don’t wander into the wrong room.”
He led them into the elevator, then through a corridor. Caldwell caught glimpses of richly furnished offices and occasionally a fat, middle-aged man in a chair.
He led them into one such office. It was empty.
The armchairs were firm, but comfortable. Yet Barman sat stiffly in his. “May I offer you some coffee?”
Both declined. Placid perched himself on the corner of the broad mahagony desk. “Is this your office?” she asked.
He seemed amused. “No. I don’t have an office. I work on the files, mostly. I churn out letters to the stockholders.”
Barman stirred uncomfortably. Placid turned to him. “How can I help you?”
“I represent Hayley Grayne, who has recently come of age. Her guardian left the management of Miss Grayne’s stock to SSI. I would like an accounting.”
Placid nodded. “I’ll see what I can do about it.”
He turned to leave when Caldwell stopped him. “While we’re here, we’d also like to see a list of Carthage stockholders who are members in SSI,” she said.
He raised an eyebrow, then made his way out.
Caldwell turned to survey the room. She walked up to a print of a starving infant with an enormous belly. On the other side of the room was a multicolored matte with blotches and smears in the center. She returned to her seat and exclaimed: “What a mess!”
Barman looked about. “It seems pretty tidy to me,” he said wryly.
She shook her head. “That’s not what I mean. I mean all the funds channeled this way. All those,” she choked on the word, “small investors who paid for this – in return for Jimmy Skinner’s pillage of healthy businesses. Carthage is not the only one to fall this way. And it’s not just because Father was killed. There’s something in the system that inevitably leads to this – that wrests control from those who build and create and gives it to men like Skinner.”
Barman shrugged. “I don’t know,” he said wearily.
“Does free enterprise really promote that result?” she asked.
“That’s what happens when you fake it,” Placid said. He was standing in the doorway holding a thick, red folder.
“Fake it?” Barman repeated.
“The corporation is an attempt to unload moral responsibility.”
Barman shook his head. “You mean legal responsibility.” He frowned. “That’s the purpose of the corporate entity. To allow one to conduct a business without incurring personal liability. The legal responsibility ends when the corporate funds are exhausted.”
Placid made his way to the desk and again perched himself on its edge. She watched him intently, as though hypnotized.
“Have you ever heard it said that responsibility and power go hand in hand?” Placid asked. “Consider what happens to the power, when no one is responsible.”
She nodded, beginning to understand.
Barman cleared his throat. “Corporations – stock companies – were invented to facilitate expansion. To encourage investment …”
“By eliminating the risk inherent in such investment,” Placid said, “at the expense of anyoneelse, naturally. At the expense of all who areharmed through negligence of management, and all who contract with business when such contracts are breached. It is a just principle anyone embarking ona venture be personally responsible for the harm it causes. The corporation circumvents it. The result is the possibility of sinking funds into a giant thatcould not have been financially viable, but for the limited responsibility of the investors. Power isscattered among millions. Each shirks responsibility,not only for the debts, but for the proper conduct of the business. The result is in the nature of a democracy …”
Caldwell gasped. “And in democracy, as we know it, men like Skinner rule!” she exclaimed.
Placid nodded. “There would be few small investors if they had to bear the entire risk of loss as well as the chance to profit. They would have to take part in management, or truly know and trust the one to whom they delegate the task.”
Barman tilted his head. “What do you think should replace the corporation, then?”
“What is the nature of liability in a general partnership?” Placid asked him.
“Joint and several.”
“That’s how it should be,” said Placid. “One who stands to profit from a venture should be liable for the entire debt owed innocent outsiders as a result of the undertaking. The nicer division can be settled among partners. That’s what stockholders should be. Partners.”
Caldwell swallowed. “Now they feel safety in numbers,” she said. “They can turn their savings over to Skinner. They know others like them will do the same. Chances are, they’ll make a profit. And if not, their losses are limited.”
“And when all the small men have contributed their meagre resources, there is such a power in the hands of those who can rule them, that a true businessman cannot compete …”
There was a strong, dignified step in the hall. She could hear the quiet snap of expensive leather shoes. Placid turned. He slipped off the desk.
“That’s better,” Skinner commented, watching him. “I see I’ve arrived just in time. I’m sure Miss Grayne and Mr. Barman have had quite enough of your talk.” He flashed them a faultless smile.
Placid went to stand by the rubber plant, in the farther corner of the office. His face was in shadow.
“I’m so glad to see both of you,” Skinner continued suavely. “It’s been a long time.”
Barman stared at him with hostility. But Caldwell searched Placid’s face in the shadows.
“I understand you’ve come to look at Miss Hayley Grayne’s portfolio. Placid, where is that folder?”
Placid emerged from the shadows and handed it to the short, well-groomed man. “You’ll find she’s been well looked after,” Skinner said, leafing through the file. Barman reached for it. It was reluctantly relinquished. Barman examined the papers, choosing one manila folder and perusing thecontents.
“Placid has been neglectful,” Skinner said. “I see he hasn’t offered you coffee.”
“No,” Caldwell answered coldly. “He offered it to us. We didn’t want any.”
“Well, in any event,” Skinner said, sighing, “I’d like some myself. Get me a mug, will you, Placid?”
The young man quietly disappeared into the hall.
Caldwell looked coolly into Skinner’s eyes. “I’m glad to see you taking an interest,” he drawled.
She turned away.
“I see you’ve invested her income in other corporations,” Barman said.
“Why, yes, not to put all the eggs in one basket, so to speak.”
Barman crooked his mouth. “But you had her buy Carthage’s nonconvertible debentures.”
Skinner smiled. “Less risk …”
Barman gave him a wry look. He leafed some more in the files. “We also wanted a list of Carthage stockholders who are members of SSI.”
“Isn’t there one in the file?” Skinner asked innocently.
“No.”
“How careless of that boy …”
Barman shrugged. “It doesn’t matter. You can mail it to us. We’ll send you a written request. We’d better be going, now.”
They stood up. Skinner cleared his throat. “The file …”
Barman smiled. “I’ll take it with me. You see, Hayley doesn’t intend to stay with SSI. She’s notsatisfied with the present management of Carthage Corporation.”
Skinner’s voice was low. “How unfortunate.”
They met Placid in the hall, a mug of coffee in his hand. Caldwell stopped to look at him, but he would not meet her eyes.
*****
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issues veritas 6 years ago
Aya
I am not into fiction and I got to the part in your cliff notes where you suggested the fix for stockholders to get more involved in a corporation by taking away their limited liability and that is where I got off the train.
The whole reason that stockholders have limited liability is because they are not running the day to day operation of the corporation.
Yes they can vote for the board and board resolutions but that in large corporations is a joke because of the proxy system.
Your suggestion would invoke more chaos into an already chaotic system. It would also create more litigation and it would be in an area without stare decisis or any case law at all. This would bring out the greed in the attorney like chumming the waters for sharks.
The stockholder is already connected to the success or failure of the corporation because of the value of the stock. Their investment into the corporation was giving money in return for the shares of stock in the corporation. If the company does well then the share values go up and vice versa.
The only area that I can imagine where your suggestion might have some merit is in the private close corporations which are prevalent in professional corporations. These professionals, lawyers, doctors, and dentists for example chose corporate rather than partnership for doing business because of the limited liability and the tax advantages. The law has provided to a limited extent with the mechanism of piercing the corporate veil.
Corporate law could be changed but not to the point of blaming shareholders personally.
If that could work then I would incorporate Congress and sue the people for the acts of Congress.