"I'd like to see those estimates," Joel said.
"Maybe later. Plus, there are other damages. These homeowners are entitled to compensation for their frustration, embarrassment, loss of enjoyment, and emotional distress. One of our clients is suffering from severe headaches over this. Another lost a profitable sale on his home because the bricks were falling off."
"We have estimates in the twelve-thousand-dollar range," Joel said.
"We're not going to settle these cases for twelve thousand dollars," JCC said, and every head shook on the other side.
Fifteen thousand dollars was a fair compromise and would get new bricks on every house. But such a settlement left only nine thousand dollars for the client after JCC lopped his one-third off the top. Ten thousand dollars would get the old bricks off, the new ones on the premises, but it wouldn't pay the brickmasons to finish the job. Ten thousand dollars would only make matters worse - the home stripped to the Sheetrock, the front yard a muddy mess, flats of new bricks in the driveway but no one to lay them.
Nine hundred twenty-two cases, at $5,000 each - $4.6 million in fees. JCC did the math quickly, amazed at how adept he'd become at stringing together zeroes. Ninety percent would be his; he had to share some with a few lawyers who were latecomers to the action. Not a bad fee. It would cover the cost of the new villa on St. Barth, where Ridley was still hiding with no interest in coming home, and after taxes there would be little left.
At $15,000 per claim, Hanna could survive. Taking the $5 million from Babcock's client, the company could add about $2 million in cash currently on hand, funds that were earmarked for plant and equipment. A pool of $15 million was needed to cover every potential claim. The remaining $8 million could be borrowed from banks in Pittsburgh. However, this information was kept between Hanna and Babcock. This was just the first meeting, not the time to play every card.
The issue would boil down to how much Mr. JCC wanted for his efforts. He could broker a fair settlement, perhaps reduce his percentage, still make several million, protect his clients, allow a fine old company to survive, and call it a victory.
Or, he could take the hard line and everybody would suffer.
Chapter Thirty-Two
Miss Glick sounded a bit rattled over the intercom. "There are two of them, Clay," she said, almost in a whisper. "FBI."
Those new at the mass tort game look often over their shoulders, as if what they're doing should somehow be illegal. With time, though, their hides grow so thick they think of themselves as Teflon. Clay jumped at the mere mention of the "FBI," then chuckled at his own cowardice. He'd certainly done nothing wrong.
They were straight from central casting; two young clean-cut agents whipping out badges and trying to impress anyone who might be watching. The black one was Agent Spooner and the white one was Agent Lohse. Pronounced LOOSH. They unbuttoned their jackets at the same time as they settled into chairs in the power corner of Clay's office.
"Do you know a man by the name of Martin Grace?" Spooner began.
"No."
"Mike Packer?" asked Lohse.
"No."
"Nelson Martin?"
"No."
"Max Pace?"
"Yes."
"They're all the same person," Spooner said. "Any idea where he might be?"
"No."
"When did you see him last?"
Clay walked to his desk, grabbed a calendar, then returned to his chair. He stalled as he tried to organize his thoughts. He did not, under any circumstances, have to answer their questions. He could ask them to leave at any time and come back when he had a lawyer present. If they mentioned Tarvan, then he would call a halt. "Not sure," he said, flipping pages. "It's been several months. Sometime in mid-February."
Lohse was the record keeper; Spooner the interrogator. "Where did you meet him?"
"Dinner, in his hotel."
"Which hotel?"
"I don't remember. Why are you interested in Max Pace?"
A quick glance between the two. Spooner continued: "This is part of an SEC investigation. Pace has a history of securities fraud, insider trading. Do you know his background?"
"Not really. He was pretty vague."
"How and why did you meet him?"
Clay tossed the calendar on the coffee table. "Let's say it was a business deal."
"Most of his business partners go to jail. You'd better think of something else."
"That'll do for now. Why are you here?"
"We're checking out witnesses. We know he spent some time in D.C. We know he visited you on Mustique last Christmas. We know that in January he short sold a chunk of Goffman for sixty-two and a quarter a share the day before you filed your big lawsuit. Bought it back at forty-nine, made himself several million. We think he had access to a confidential government report on a certain Goffman drug called Maxatil, and he used that information to commit securities fraud."
"Anything else?"
Lohse stopped writing and said, "Did you short sell Goffman before you filed suit?"
"I did not."
"Have you ever owned Goffman's stock?"
"No."
"Any family members, law partners, shell corporations, offshore funds controlled by you?"
"No, no, no."
Lohse put his pen in his pocket. Good cops keep their first meetings brief. Let the witness/target/subject sweat and maybe do something foolish. The second one would be much longer.
They stood and headed for the door. "If you hear from Pace, we'd like to know about it," Spooner said.
"Don't count on it," Clay said. He could never betray Pace because they shared so many secrets.
"Oh, we're counting on it, Mr. Carter. Next visit we'll talk about Ackerman Labs."
After two years and $8 billion in cash settlements, Healthy Living threw in the towel. The company, in its opinion, had made a good-faith effort to remedy the nightmare of its Skinny Ben diet pill. It had tried valiantly to compensate the half million or so injured people who had relied upon its aggressive advertising and lack of full disclosure and taken the drug. It had patiently weathered the frenzied shark attacks by the mass tort lawyers. It had made them rich.
Tattered, shrunken, and hanging on by its fingernails, the company got hammered again and simply couldn't take anymore. The final straw was two wildcat class actions filed by even shadier lawyers who represented several thousand "patients" who used Skinny Bens but with no adverse effects. They wanted millions in compensation simply because they had consumed the pill, were now worried about it, and might continue to worry about it in the future, thus wrecking their already fragile emotional health.
Healthy Living filed for bankruptcy protection under Chapter 11 and walked away from the mess. Three of its divisions were on the block, and soon the company itself would cease to exist. It flipped the bird to all the lawyers and all their clients and left the building.
The news was a surprise to the financial community, but no group was more shocked than the mass tort bar. They had finally strangled the golden goose. Oscar Mulrooney saw it online at his desk and locked his door. Under his visionary planning, the firm had spent $2.2 million in advertising and medical testing, which had so far yielded 215 legitimate Skinny Ben clients. At an average settlement of $180,000, the cases were worth at least $15 million in attorneys' fees, which would be the basis of his much anticipated year-end bonus.
In the past three months, he'd been unable to get his claims approved by the class-action administrator. There were rumors of dissension among the countless lawyers and consumer groups. Others were having trouble getting the money that was supposedly available.