It was one of the more bizarre conversations I have ever had in business. Again, he grilled me that I must have partners, I assured him I didn't. He wanted to know where I got the money, I told him it was none of his business, it was really strange, because we were pretty close and now the mistrust reared its ugly head.
I told him the truth that I managed to borrow what I could and you could tell he really didn't believe me, but I didn't care, it was the truth. He came up with a scenario that he would sell me the business, but if I defaulted on one of many restrictions, he would take it back and be free to sell all the assets and leave me high and dry! I agreed to the death sentence believing I could save it and that was that. We shook on it and got the lawyers working on the particulars.
In the meantime his brother stopped talking to me, cleaned out his office and never formally said goodbye! This is the guy that hired me, it was a very weird time. The employees had no idea how bad it was and besides the sale of the stock only, I was responsible for all the debt he incurred as an owner, this would come back to haunt me for years to c0me, You would think the bank would avise you of that but they were just ecstatic to get me to sign a secured loan with a personal guarantee, basically a death sentence, based on the companies financial difficulties which were tremendous!! But hey what did they care they finally achieved secured 1st position on all assets! so they improved their position immensely.
Looking back now, i should have pre-negotiated a discount on the loan, signed a discounted guarantee that was oh I don't know say 30% greater than their current position which was completely non-guaranteed and that would have been a good deal for everyone!! But stupid me, agrees to the whole shabang, Oh by the way, great advice from my lawyer's!!! Are you kidding me and so I sign a deal that has me on the hook for $3.2 million with the bank and another $5 or so million in payables owed to suppliers? What a deal huh ? It is called suicide. Ok? Plus I paid the owner to buy the business another say $450,000 0ver 5 years! Even when I read this I still shudder. Complete insanity at best!!!
I don't know one person who would even think about doing this, never mind signing your life away!! But that is what I did, during a blizzard, how appropriate, on December 19, 1997!! Then reality set in, and it wasn't pretty!!!