Another Business Fairy Tale

by francine Hardaway on June 28, 2002

Once upon a time, twenty-five years ago, my widowed mother dated the CEO of a public multi-national paper company. The company, Saxon Industries, was formed as the result of a series of mergers and acquisitions among small paper companies, and its first CEO had been one of the smaller companies� owners, a friend of our family named Mike Berman. Berman Paper Company had swallowed a larger company, become listed on the NYSE, and gone on to eat several other companies. Follow me to the end of this, because there’s a lesson here.
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As a friend and neighbor of Berman, my father had been the architect of the roll-up, and was still on the board of Saxon Industries at the moment of his untimely death. A CPA, Stan Lurie, was the CFO, although they didn�t call it that at the time. A reasonable time after my father died, my mother began dating Stan (who was married). A reasonable time after that, Mike Berman mysteriously ran his car into the side of a tunnel on a freeway in Westchester, and Stan became the CEO of Saxon Industries.

I never liked Stan.

Young and idealistic, I didn�t like business either. But I really thought Stan, in business or in person, was a slime ball. Of course I told this to my mother, who merely responded that I wouldn�t like *anyone* she dated, because he wasn�t my real father. That was one hundred per cent true, so I was on shaky ground with regard to moral authority, even though I believed I knew something.

For years, Stan tried to buy my affection and that of my young children. When my first child was born, he sent a sidecar of disposable diapers to my house (they were a novelty at the time, and his company manufactured them). Every time he and my mother visited our home in Phoenix (which was a geodesic dome heated with solar energy) from New York, he took my children shopping and to fancy resorts. In contrast, my husband and I didn�t even have a telephone in the house and were growing a vegetable garden with a compost pit.

Even our dogs knew Stan was a loser. We warned Stan that the male dog was a biter, but he arrogantly said �you�ll see, if I don�t show fear, he won�t bite me.� We had to cart Stan off to the hospital in his three-piece suit after Tiaba ripped into his leg.

Time passed, and computers became more common in large companies. Saxon Industries appeared to thrive, until one day my mother called and told me Stan had been indicted — for white collar crime. She was sure he had done nothing wrong. I was sure my moment of justification had arrived.

As the SEC investigations unfolded, it turned out that Stan had used the computer to falsify revenues by adding days to the year; days on which sales were booked that rightfully belonged to the following year. My mother thought that being indicted for this was grossly unfair. Stan, she said, had only been trying to save people�s jobs by keeping the company going.

The company quickly unraveled and ceased to exist. Stan went to a minimum security prison in Florida, with the Gucci heirs and other tax evaders. The shareholders lost everything. The vendors got caught in the bankruptcy. The employees filed for unemployment. I wasn�t one of any of them, so I felt vindicated.

What is the lesson from this? Nothing has changed. Enron, Tyco, Adelphia, and Worldcom are the Saxon Industries of today. A greedy CEO is a greedy CEO in the old or the new economy, and a cheater is a cheater � on his wife or on his shareholders.



{ 1 comment… read it below or add one }

Slo_cala_bill July 8, 2011 at 3:40 pm

I stumbled across this blog and found it very interesting. I was a young VP based in the Miami Lakes facility. The information here is right on, Stanley was disliked or feared by most, but if he liked you, he always stopped by to say hello, and often extracted small favors from you. My “favor” was resetting his hand held electronic organizer as he had no technical skills at all. Things did go “over the brink without a blink” as the newspapers reported. I was in Europe on business for Saxon when it started to go down. We were worried that our return tickets would not be valid, but made it back ok.

Saxon was a great place to work and I miss the many top flight people I met there. It made the down fall that much harder to experiance. After all of these years I still can recall the good times at Saxon.

I have often wondered how Stanley died, was he in prison, was he buried in South Florida or in the North? I heard he remarried before he died.

Thanks for your blog, it stirred many emotions.

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