Bankers Trust

"In April 1983, Peltz and May (in a two-thirds/ one-third partnership) purchased Goldberg’s block, 29 percent of Triangle’s shares, for about $ 14 million. Two million was lent to Trafalgar; twelve million was lent to Peltz and May, from Manufacturers Hanover and Bankers Trust. Bankers Trust took the stock as collateral; Manufacturers Hanover took Peltz’s and May’s signatures and a lien on Peltz’s house in Quogue. Peltz recalled that it took all his powers of persuasion at the bank, and that when he finally walked out of Bill Rykman’s office at Manufacturers Hanover with the certified check in hand and met Goldberg, Goldberg told him that he couldn’t do the deal after all, because the Triangle board would not approve the change of control. “I literally ran the check under his nose, the spittle started to come out of his mouth, he was dying to put his arms around the money,” Peltz declared. “I said, ‘Let me try, let me talk to the board, let me show them I don’t have horns.’"

"In April 1983, Peltz and May (in a two-thirds/one-third partnership) purchased Goldberg’s block, 29 percent of Triangle’s shares, for about $14 million. Two million was lent to Trafalgar; twelve million was lent to Peltz and May, from Manufacturers Hanover and Bankers Trust. Bankers Trust took the stock as collateral; Manufacturers Hanover took Peltz’s and May’s signatures and a lien on Peltz’s house in Quogue. Peltz recalled that it took all his powers of persuasion at the bank, and that when he finally walked out of Bill Rykman’s office at Manufacturers Hanover with the certified check in hand and met Goldberg, Goldberg told him that he couldn’t do the deal after all, because the Triangle board would not approve the change of control. “I literally ran the check under his nose, the spittle started to come out of his mouth, he was dying to put his arms around the money,” Peltz declared. “I said, ‘Let me try, let me talk to the board, let me show them I don’t have horns.’ ”"

"Foster tapped str Canada, the local arm of Bankers Trust in New York, as a funding source, and on behalf of Sealand he began negotiations with Len Rutledge to purchase Toronto Helicopters. According to Foster, the negotiations grew complicated because of Rutledge’s apparently endless demands. “We would reach an agreement and get ready to sign off,” Foster says, “and Len would say, ‘Oh, there’s one more thing, and we'd have to deal with that.” Rutledge kept raising issues each time Foster believed they had a deal until, within a day or two of the final deadline, he said again to Foster, “Oh, there’s just one more thing.” “Len,” Foster replied, “I’ll do this ‘one more thing, but if there’s anything else I’m going to advise Craig Dobbin to just walk away and forget everything.” The “one more thing” this time turned out to be the purchase of Rutledge’s Mercedes-Benz. Foster agreed, and negotiations were completed. Sealand was about to purchase its larger rival, leaving Sealand with a sweat-generating 27:1 debt-toequity ratio."

"The action of Bankers Trust, Jones believed, was akin to extortion, costing Sealand millions of dollars more than anticipated. But there was no backing out. He agreed to the higher interest rate, new terms were drafted, an agreement was signed, and the deal was completed. Craig Dobbin was furious over the actions of Bankers Trust, of course. In retrospect, however, the purchase of Toronto Helicopters proved a major step in transforming the company into a global powerhouse. With Toronto Helicopters rolled into Sealand and its cash flow solving many of Sealand’s liquidity concerns, Craig Dobbin’s eyes brightened at the prospect of the next step in expanding his company, this one even more audacious. One morning shortly after the deal to purchase Toronto Helicopters was completed, Craig Dobbin strolled into Robert Foster's Toronto office. “Robert,” he said, “I want you to get on a plane, fly to Calgary and buy Okanagan Helicopters for me.”"

"Nothing Jones offered could sway the lawyer from his position. Finally, the New York man offered to provide the money at an interest rate two full percentage points above the agreed-upon level. In a take-it-or-leave-it offer, Bankers Trust was employing a strategy designed to improve its own profits by hiding details of its agreement during preliminary discussions, cornering Sealand until it could not afford to kill the deal. The hardball-playing New York lawyer, Jones suspected, had ridden into town determined to fleece the trusting, slow-moving Canadians.” Jones turned to the Canadian vice-presidents of Bankers Trust, reminding them that they had given their word on the terms of the deal and had represented the bank’s position during weeks of discussion. Sealand had invested an enormous amount of time and money to this stage, based on BT’s assurances. “You can’t change the rules on the one-yard line,” he insisted. The vice-presidents remained silent. “They wouldn’t even look at me,” Jones says. “Meanwhile, Len Rutledge is at the other end of the table grinning from ear to ear,"

"“Events suggest this may have been the case. A few years later, Bankers Trust was successfully sued by Procter & Gamble and Gibson Greetings. Both firms charged that representatives of BT intentionally withheld and obfuscated details of a financing agreement to conceal their company’s excessive profits. The trial and its results garnered much notoriety when the court heard audiotapes of Bankers Trust representatives gleefully boasting that their clients would never understand all the ramifications of the agreements. The court agreed that “the treatment of P&G [by Bankers Trust] was not an isolated incident or a ‘garden-variety fraud, but rather part of a pattern of mail, wire,and securities fraud spanning a number of years and involving multiple victims.”"

"The rescue came from Kreditkassen. In retrospect, it is more than a miracle. In the spring of 1991, when the Norwegian banking system in general, and Kreditkassen in particular, were speeding towards the abyss, a loan of nearly one and a half billion was assembled for the Fredriksen system. K-bank was supposed to have participated in the original loan syndicate under Bankers Trust, and stood by its customer when everything collapsed. Fredriksen's insider, Carl Steen, managed to navigate the gigantic loan past the bank's board without anyone making a fuss. Just months later, the bank was under administration, and it would have been easier to steal the money in the vault than to borrow it."

"Fredriksen did not succumb to the overpowering force. From his hiding place, he had several lengthy conversations with Morten Kristiansen, who, in addition to Warpe and Fredriksen's wife Inger, was among the very few who knew the location. The shipowner and his friends made plans. The order to Kristiansen was clear; the fleet was to be sold off as quickly as possible at proper prices. No one was trusted with the ability to manage the ships in Fredriksen's absence. In the discussions, no one used the word prison. They planned as if Fredriksen was facing a six-month long vacation. Kristiansen also got the job of securing new insurance. No fewer than 27 boats sailed without insurance. As if this little revenge was not enough, Gard had also seized the money Marine Management had in the bank. The newly appointed boss faced problems far beyond his white collar. Normally, Gard’s taunts would be a financially lethal dose. Reporting, suing, cancellation of insurance, and freezing of accounts at the same time are tough to handle for any shipping company. As an outsider, one was even worse off. Kristiansen solved the insurance problem simply and effectively. He approached Gard’s main competitor. The management of Skuld, the country's other important mutual insurance association, was in doubt. They contacted chairman Steen Olsen and asked for advice. Olsen's advice was to say yes for three reasons. The justification was cynical: "Firstly: If they have done something wrong, you can be sure that they will not do it again. Secondly, they are skilled people. And thirdly, money does not smell." Skuld welcomed its new member with open arms, and eventually the financing also fell into place. The head of Bankers Trust's shipping department, John Sawyer, flew in from London. He was informed about the desperate situation and chose to support the client. Sawyer did not hesitate long to make available the money the major client needed to weather the storm. Against all odds, Kristiansen had managed to steer the damaged ship into calm waters. But"

"Fredriksen did not succumb to the overpowering force. From his hiding place, he had several lengthy conversations with Morten Kristiansen, who, in addition to Warpe and Fredriksen's wife Inger, was among the very few who knew the location. The shipowner and his friends made plans. The order to Kristiansen was clear; the fleet was to be sold off as quickly as possible at proper prices. No one was trusted with the ability to manage the ships in Fredriksen's absence. In the discussions, no one used the word prison. They planned as if Fredriksen was facing a six-month long vacation. Kristiansen also got the job of securing new insurance. No fewer than 27 boats sailed without insurance. As if this little revenge was not enough, Gard had also seized the money Marine Management had in the bank. The newly appointed boss faced problems far beyond his white collar. Normally, Gard’s taunts would be a financially lethal dose. Reporting, suing, cancellation of insurance, and freezing of accounts at the same time are tough to handle for any shipping company. As an outsider, one was even worse off. Kristiansen solved the insurance problem simply and effectively. He approached Gard’s main competitor. The management of Skuld, the country's other important mutual insurance association, was in doubt. They contacted chairman Steen Olsen and asked for advice. Olsen's advice was to say yes for three reasons. The justification was cynical: "Firstly: If they have done something wrong, you can be sure that they will not do it again. Secondly, they are skilled people. And thirdly, money does not smell." Skuld welcomed its new member with open arms, and eventually the financing also fell into place. The head of Bankers Trust's shipping department, John Sawyer, flew in from London. He was informed about the desperate situation and chose to support the client. Sawyer did not hesitate long to make available the money the major client needed to weather the storm. Against all odds, Kristiansen had managed to steer the damaged ship into calm waters. But for how long?"