Ross and Me
It is good to have Ross Perot as my business partner-most days.
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Perot had upped the ante to the sky: “Remember, my interest is not for sale on Wednesday morning.” He expected me to try and fail and then agree to the restructuring that he wanted. But he underestimated the strength of my determination to hold on to my company. I agreed to the impossible terms he had proposed without any idea how I was going to pull it off.
Sunday, April 29
After frantically trying for two days to get through to Katherine, I finally reached her today. We decided the best potential buyer would be a company that had approached us several months ago wanting to invest in Total Top. Perot and I had declined the advances of this billion-dollar-a-year automobile distributor. Now I needed them. I reached the CEO at his home and breathlessly briefed him on the situation. I expected him to laugh when I mentioned the timetable, but he instantly picked up the gauntlet: “No problem. We’ll fly in first thing in the morning.” I am beginning to like this prospective partner of mine.
Monday, April 30
Their plane was supposed to arrive before 8 a.m. A little after 10, I received word that their takeoff had been delayed due to air traffic. I panicked; the noon deadline was approaching. Then I received word at Katherine’s office that they were in flight and that I was to fax a final outline of our proposed deal to their hangar in Dallas. At 11, they had still not landed.
Katherine and I decided to send someone to Perot’s office with the check. We could not actually deliver the check to Perot until we had a commitment from our buyers, along with their promise to wire funds to the escrow account that day to cover the check. We dispatched Fred Griesbach, Total Top’s office manager, to Perot’s office at 11:05. He had instructions to call us every five minutes from a pay phone in the lobby of Perot’s building.
At 11:20, the buyers’ plane touched down at Love Field. Things started to move quickly. At 11:30, the buyers approved our terms. They agreed to wire the funds to the escrow account today. At 11:40, Fred called: “Perot is leaving the building.”
I told Fred to hand him the check. Perot was backing his Oldsmobile out of the parking lot when Fred ran up to his car and waved wildly for him to stop. Perot waved back, apparently thinking that Fred was someone he knew—or an admirer. Then Fred motioned for him to roll down the window. He handed Perot the envelope and walked away, without responding when Perot called out to ask who it was from. Oh, to have been a fly on the windshield of Perot’s car and seen the look on his face when he discovered that I had cleared the first hurdle!
Perot left word that he had received the check and the closing would be late tomorrow afternoon at the offices of Hughes and Luce. Then he cashed the check.
The rest of the afternoon and late into the night the buyers and I hammered out the details of our agreement. We had only 24 hours to fill in all the blanks of an agreement that Perot and I had worked on for months.
HARDBALL
Tuesday, May 1
We worked frenziedly until the scheduled closing, ten lawyers generating stacks of documents with blank signature lines. At 3:50, as we were putting the finishing touches on the papers that we had to sign among ourselves before the closing, Katherine’s secretary called to say that Perot was trying to find me. I dialed his number and put him on the speakerphone, as lawyers and paralegals shuffled papers around me.
“Steve, who is your buyer?”
Even my fatigue-numbed brain recognized his question as a zero-hour assault on a deal he didn’t want to do. The buyers had stipulated as a condition of their participation that their identities be withheld from Perot until after the closing; they were not comfortable with Perot knowing who they were beforehand.
I reminded Perot that that information could not be given out.
“Well, I won’t sell to someone when I don’t know who it is,” said Perot. “I’m choosy about who I’m in business with.”
Katherine—who had never been intimidated by Perot and whom he always referred to with grudging admiration as “that damn smart lawyer”—chimed in irreverently that he wasn’t going to be in business with these people; they were buying him out. Anyway, she added, the way the deal was structured, I was the actual purchaser of his interest. They were just fronting me the money.
“Steve, are you flipping this?” asked Perot.
“No,” I replied.
“Because it wouldn’t be fair for you to buy me out at a good price—it’s worth more, but I’m selling it to you for less because it’s your baby—and then for you to turn around and flip it for a higher price.” Perot asked me to give him my word that I was not flipping the deal. I did.
“So you won’t tell me who the buyer is. Is it a major soft-drink company?”
“No.”
“A major fast-food company?”
“No.” I turned around to look at my party, who were emphatically shaking their heads and zipping their lips. “Ross, I can’t tell you any more.”
“Well, we don’t have any more to discuss then. This deal is dead. Thank you.” Perot hung up.
There was a heavy, exhausted silence in the room. I called Perot back several times, trying to persuade him to change his mind. He wouldn’t budge, and the buyers were wearing out. Perot offered one slim compromise: We could disclose the buyers’ identities on a confidential basis to Tom Luce, and Luce would simply confirm to Perot that they were, in fact, “God-fearing men.”
We knew it would be a mistake to reveal the buyers’ identities to Luce, who had a fiduciary relationship with Perot. For their part, although they stood to lose the deal entirely, the buyers felt that the more Perot wanted to know who they were, the more critical it was that he not know.
At 5:25 p.m., the buyers, discouraged, disgusted, and exhausted, packed up their briefcases and prepared to head for the airport. They were convinced that Perot had never had any intention of selling. Before they left, Katherine called Perot’s lawyer one more time to tell him that our party had no other option but to dismantle and go home—unless Perot changed his mind. “No,” said Perot, “the deal is off.”
After everyone left, I hung around the office for about 45 minutes, feeling completely dejected and defeated. By the time I got home, Perot’s lawyers had left messages there and at the law firm’s office that he had reconsidered and would go ahead with the closing after all, if we closed that night. The close of his business hours, he said, was sometimes around nine. His timing was perfect: The messages came in just as the buyers’ plane became airborne.
We would each blame the other for calling off the deal.
Wednesday, May 9
Perot and I are clearly deadlocked—our fifty-fifty voting rights determine that. I won’t agree to sell to him, he won’t agree to sell to me, and we can’t agree on the royalty issue. Two unyielding egos. The sad fact is that the only remaining option is for both of us to sell. Perot must feel as if he has created a monster—a young kid who stands up to him. The truth is, I wish none of this had happened. I just want to be back in business with Perot like before. Unfortunately, it seems that things have gone too far for that.
Friday, June 1
Blasnik suggested that Perot and I each sell our interests to a third party. Our lawyers negotiated the only way out of our partnership.
Friday, December 21
Today I signed off on a $5 million deal to sell my Total Top interests, including two worldwide patents, to a Houston company that has been negotiating with us for months.
Sunday, December 23
Perot signed off on a separate agreement for his interests; he will receive $2.6 million. The buyer now has several months to arrange financing.
PARTNERS AGAIN
Monday, June 24, 1991
Our buyer has requested a short extension to the agreement; the financing has not shaped up. Perot called me tonight and said he had been thinking about it and really didn’t want to sell Total Top. “Don’t give up your first really big deal. It’s our cash slot machine. I don’t want to sell it,” said the Great Persuader, back in the business of trying to convince me that our interests were the same.
I thought about it. I had agreed to sell only because there seemed to be no other option. If Perot was willing to resume our relationship on its original terms, well, so was I. When Total Top made its debut on grocery store shelves and fast-food trays—as I knew it soon would—I wanted to look with pride, not turn away with remorse because I had cashed in on my invention too soon. And perhaps more compelling, I wanted to stay in business with Perot. He had put me through a lot, made me jump through a lot of hoops to stay where I had wanted to be, but somehow I didn’t take any of it personally. Perot, I now understood, made decisions based solely on his business judgment. He expected no less from those with whom he dealt. Working with Perot was the ultimate adult challenge and exhilaration. I wanted to learn more.
Monday, July 1
Perot and I declined the buyer’s request for an extension, terminated the agreement, and reinstated our original arrangement. We are partners again.
Thursday, May 7, 1992
Our new business arrangement is working smoothly; Perot and I are getting along famously now. The stretchable Total Top lid and integrated cup and lid unit have been patented in every country that has discovered fast food. And we are looking forward to its U.S. marketing debut.
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