Swimming To Catalina

55

Vance came back to the suite after Arrington had gone. He called room service for more coffee, and after it had come, he sat down on the terrace with Stone. “First of all, I’d like you to represent me as my attorney in this matter. Will you do that?”

“I’m not licensed to practice in California,” Stone said, “and if you should somehow become involved in a trial, you’ll have to get a California attorney. But for the moment, at least, I will advise you, and you may consider anything you say to me to be privileged, as communication between a lawyer and his client.”

“All right,” Vance said, “what do you want to know?”

“Everything,” Stone said. “And don’t leave anything out.”

“It started with stock,” Vance said. “Centurion stock. The company isn’t publicly owned, it’s very closely held, only a dozen or so shareholders of any size, and a couple of dozen smaller ones, mostly valued studio employees. Somebody began contacting shareholders, offering to buy their stock, obviously trying to find a way to gain control of the company.”

“Who?”

“No one knew at first; it was being done through a third party. Lou Regenstein got wind of it, but it was his strong impression that people were being intimidated into selling or, at least, keeping their mouths shut about having been approached. It was very bizarre, very ominous.”

“When did they approach you?”

“Wait, there are other things I have to tell you that will make this make more sense.”

“All right, go ahead.”

“David Sturmack and I have been good friends for a long time; I guess he and Lou have been my closest friends. It was David who introduced me to Oney Ippolito. I was involved in a real estate development project-a shopping mall-and our financing fell through. I was faced with either coming up with a very large amount of cash-thirty million dollars-or losing the five million I had already invested. I called David for advice, and he arranged a lunch with Ippolito. A week later, we had the financing from Safe Harbor.”

“Was the project a questionable one?”

“I never thought so. The managing partner had had some problems in the past with repaying debt on a project, and that made our lender shy away. The mall is open now, and doing excellent business. It was a good deal for Safe Harbor.”

“What happened next?”

“It was all very gradual. I began shifting my banking business to Safe Harbor, until finally they had everything-checking accounts, CDs, T-bills, and all the trusts I had set up over the years, including one for Arrington. Whenever I had a business investment that required financing, they were always willing and eager. When Oney asked me to join their board, I accepted.”

“How long have you been on the board?”

“Seven or eight months, I guess. I haven’t been happy.”

“Why not?”

“It became apparent to me early on that Oney expected me to rubber-stamp any decision he made, particularly the ones concerned with his personal compensation-stock options, bonuses, et cetera. The other directors, David Sturmack among them, were obviously in his pocket. I’m on three other boards, and I take an active part; I take my responsibilities to the shareholders seriously. I was ready to quit early on, but Oney persuaded me that I owed him something, and that I shouldn’t make him look bad by resigning. I agreed to stay on for a few months more. Then he came to me and said he wanted me to be the television spokesman for the bank. I flatly refused.”

“How did he take that?”

“Not well. I explained that I had never done a television commercial and that I never would. I’ve carefully built a persona as an actor, and I didn’t want to squander that. He said that persona was the very reason he wanted me. After all, I was co

“Did he put further pressure on you?”

“Not immediately. But the following week, David Sturmack came to me and said that someone was willing to pay handsomely for my Centurion stock-double what it’s worth, I reckon. I told David that I couldn’t even consider that until I’d talked to Lou Regenstein about it.”

“What did he say to that?”

“He urged me not to reveal to Lou that I’d been approached, and especially not that he was the one who’d done the approaching. There was something very hard about it, almost threatening.”

“What did you do?”

“As soon as he left my office I called Lou and told him what had transpired. Lou was very angry about it, and I promised him I wouldn’t sell the stock. I had Betty put my shares in a new safe deposit box the same day.”

“You felt that threatened?”

“It’s hard to explain, but yes.”

“Is Centurion a very profitable studio?”

“Not wildly so, but year in and year out, it does well. The studio has always operated without much debt, but the last year or two there had been a couple of expensive failures, and Lou started to borrow from Safe Harbor, with the board’s approval. I’m on the board.”

“Why were they so anxious to get the studio, if it’s not all that profitable?”

“The real estate.”

“What real estate?”

“The land the studio sits on. That was Lou’s theory, anyway. All the stockholders and everyone on the board knew that the land was as valuable as the business itself The back lot had been sold off years ago, for a few million dollars, which was stupid. It would be worth twenty times as much now. The studio sits on the biggest piece of land remaining in Los Angeles that is still held by a single owner-more than four hundred acres. If you tried to put together that much well-located, contiguous land in L.A. by assembling it from different owners, it could cost hundreds of millions of dollars, maybe as much as a billion.”

“Why doesn’t the studio sell it, move to the sticks, and build a new studio?”

“The costs of doing that, of building from scratch, would be nearly as much as would be gained by selling the land. Anyway, all the stockholders are deeply involved in the movie business; all of them-producers, directors, studio executives-know that what we have is unique and can never be re-created. They’re all wealthy people, so they don’t need a lot of money from the sale. There’s a traditional practice, but not a hard rule, that if someone wants to sell his stock, the studio will buy it back, with the price determined by a previously agreed formula. The same if someone dies-the studio will buy back the stock from the heirs. There’s no real market for small parcels of stock outside the studio family, so it worked for everyone. Whoever was behind this wanted to gain control by assembling a block of shareholders, ignoring the buy-back tradition, then buying out everyone else.”

“I see. But then the new owners would be in the same position as the old owners, wouldn’t they? They’d have a big asset that makes money and that would cost as much to move as to stay. They wouldn’t just close down the studio, raze it, and sell the land, would they?”

“Lou thinks there’s more to it. He thinks they’re using Century City as their example.”

“The big group of office buildings?”

“Yes. Century City was built on what used to be the back lot of Twentieth Century-Fox; they sold out to developers. Lou thinks the prospective owners-let’s call them Sturmack and Ippolito, since they already own a substantial minority of the shares-don’t want to sell the land; he thinks they want to do the development themselves, and with Safe Harbor and other money behind them they could do it. It would be worth billions in the end.”