Jones

"With typical exuberance, Kaiser did not wait for final approval to get started. Fourteen months earlier he had commandeered the services of Clay Bedford in setting up the Richmond shipyards. In mid-February 1942, he called chief engineer George Havas and rumbled, “George, you’re going to build me a steel mill.” Havas, as familiar as Bedford with his boss’s style, asked, “What kind of a steel mill?” Kaiser replied, “Oh, just a steel mill, a small one.” Yet from the beginning, Kaiser had no intention of being limited to a “small” mill. The initial RFC loan was a modest $ 22 million, but Kaiser was back in Jones’ office within weeks, seeking another $ 100 million for plant expansion."

"Jones explained to Dobbin that he enjoyed his job, he and his wife loved Vancouver, and though he was flattered by the offer he was not interested. Refusing to concede, Dobbin called several times over the next few months, attempting to persuade Jones to accept the job, even flying Jones and his wife to St. John’s for a meeting. Jones continued turning down the offer until the day Dobbin called Jones at a relative’s home in Winnipeg and said, “What the hell is it going to take to get you back east running Sealand?”"

"Jones and his family were settled in Vancouver, a city he loved, and Jones enjoyed working at Okanagan Helicopters. His wife, a doctor, had a thriving practice. They owned a home near the water and had no interest in returning to the east coast. “In fact,” Jones says, “if you had told me an hour before I met Craig Dobbin that I would ever move back to Newfoundland, I would have bet my life savings against it.”"

"Jones kept raising the issue with Dobbin, pointing out that free trips represented a substantial leak from the company’s revenue stream. Finally he laid it out with all the strength and conviction he could muster. Controlling this single expense, Jones lectured, would represent a major step in the company rising out of its debt position. “J.C., that’s just what I need to hear,” Dobbin replied, slapping Jones on the back. “You get on top of this and tighten it up for me.” Jones asked Dobbin if he was serious; Dobbin assured him that he was damn serious. Quickly rounding up all the Sealand pilots, Jones announced there would be no further free helicopter service for anyone. “Only two ways can you take one of our choppers off the ground,” he ordered. “If it’s a real revenue-producing flight under a contract, or if my signature is on the flight request. Got it?” The pilots got it"

"“I couldn't believe that he'd tracked me to Winnipeg,” Jones recalls. “So I figured I’d put him off for good, I'd just get rid of him.” Jones asked for twice his current salary, adding that Dobbin would have to cover all his moving expenses to Newfoundland, provide his family with an acceptable house, and have a new car waiting when he got there. “I made it as ridiculous as I could, convinced that he would give up.”"

"“I learned that Craig’s management style was based on gambling,” Jones explains. “I had earned my mBa, which equips you to manage and reduce risk. That’s important, but the process sucks all the entrepreneurial spirit out of you. Craig never had a formal business education. He admired people who did, but he didn’t trust or didn’t appreciate some aspects of it. He was always working like a man at the very edge of a cliff. One strong gust of wind would blow him over the brink. The other managers and I, we were always trying to get him to pull back from the edge and give us a little manoeuvring room. But as soon as we did, he'd take us back again with some scheme or deal. He was never really comfortable unless he was right on the edge.”"

"On the return flight to Newfoundland, Jones assumed the deal was dead before it was born. Rutledge was not prepared to accept empty promises. He had told J ones, in effect, that when the $500,000 was deposited in Rutledge’s account, they would talk. Until then, nothing was going to happen. In St. John’s, Jones broke the news to Dobbin, who pondered the situation for a moment, then shrugged and said, “So pay him the half-million out of our operating line,” meaning the million-dollar credit arrangement Sealand had with rp Bank to cover the firm’s day-to-day expenses. Jones protested they couldn't do that. Tp granted the credit to pay for salaries, rent, fuel and other expenses, not to spend it on acquisitions. The bank would never approve giving half of Sealand’s entire line of credit to Rutledge just to open negotiations. Besides, reducing their access to available cash by 50 per cent would leave Sealand in a difficult position when it came to paying its bills. Dobbin’s response was familiar to Jones by now. “Screw the bankers,” he said. “Let’s do it.”"

"Responding to a direct summons, Dobbin and Jones travelled south to Aerospatiale’s North American office, expecting to negotiate terms for future payments in a businesslike atmosphere. Instead, they encountered a herd of hostile executives and angry lawyers determined to wring money from Sealand with all the finesse of a Texas posse in pursuit of outlaws. “They talked to us like we were a couple of schoolboys catching hell in the principal's office,” Jones remembers. “They weren't polite, they weren’t accommodating, they weren’t even businesslike. They considered us a couple of dummies from Canada who owed them money and weren’t paying them.” One lawyer repeatedly challenged Jones, growing ruder with every effort Jones made to explain the situation. Referring to Jones and Dobbin as idiots and crooks, the lawyer interrupted every utterance from Jones with a fresh insult and accusation."

"Within a few days, Jones was on his way to meet with Rutledge at his firm’s office in Buttonville Airport, northeast of Toronto. Rutledge greeted him warmly, then set the first rule. Before negotiations began for Sealand to acquire his company, Rutledge wanted a guaranteed non-refundable deposit of $500,000. No matter how the negotiations proceeded and whether or not a purchase deal was reached, Rutledge would pocket the $500,000. Rutledge also set a negotiating deadline. If a deal was not reached within ninety days of Rutledge receiving the deposit, discussions would be cut off and Rutledge would retain the half-million dollars."

"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,"

"for today's hedge funds. A hedge fund, according to Jones, is a limited partnership so that the general partners—the managers- earn a share of the profits on the limited partners'-the in- vestors'-assets. A hedge fund always uses leverage and must always carry some short positions. Jones believed that by using a series of shorts, the fund would be able to prosper in both good and bad times. Twenty percent of all profits went to the general partners and the rest to the limited partners. Jones did not believe in management fees, because he felt they distracted the manager from the portfolio's performance in the race to gather assets."

"With typical exuberance, Kaiser did not wait for final approval to get started. Fourteen months earlier he had commandeered the services of Clay Bedford in setting up the Richmond shipyards. In mid-February 1942, he called chief engineer George Havas and rumbled, “George, you’re going to build me a steel mill.” Havas, as familiar as Bedford with his boss’s style, asked, “What kind of a steel mill?” Kaiser replied, “Oh, just a steel mill, a small one.” Yet from the beginning, Kaiser had no intention of being limited to a “small” mill. The initial RFC loan was a modest $22 million, but Kaiser was back in Jones’ office within weeks, seeking another $100 million for plant expansion."