FEBRUARY 21, 2024 – (Cont.) What I experience performing or speaking in front of a crowd varies depending on the size of the crowd. I tend to be more nervous in front of 10 readily identifiable people than I am before a sea of anonymous faces. For the bondholders meeting we’d expected the latter—legions of faces, but not particularly friendly or forgiving ones[1]. Attendees wouldn’t be assembling to be entertained by an amateur pantomimists or joke-telling violinist in the tradition of Jack Benny. They had money at stake; cold, hard cash, the propellant that makes the world go round, or at least the individual worlds of the people who had claims to the cash. What was the big hold-up on recovery of funds from the ELIC receivership? Why hadn’t we pounded the door down and seized payments on what had now been adjudicated as a priority claim—the ELIC GICs securing the NIFA (and other taxable public agency bonds? Why hadn’t we been more aggressive, tenacious, persistent, vigilant, et cetera ad nauseam . . . in all the ways we had been, actually, if the angriest (and most aggressive) bondholders knew the half of all the gory details and complications that our group had grappled with for months on end.
Over an early room service breakfast, I reviewed—and marked up—my opening statement for the thousandth time, and wrote it out for the hundredth time to ensure legibility. As I consumed the scrambled eggs and toast and downed what I thought was the right measure of caffeine for what lay ahead, I thought about the tone of my delivery; striking a balance between “We hear you, loud and clear” and “Sorry, but recovery and distribution are gonna take a little more patience.”
The last thing the bondholders wanted to hear was some wooden-headed trustee[2] dressed in a banker’s uniform reciting a mealy-mouthed script of nothingness, all designed to cover his butt and the butts of all the other trustee-banks—and their lawyers. And yet, that was pretty much exactly our mission: deliver a palliative so as not to get sued on top of the MDL class action still pending down in Louisiana. Or in my immediate case, to avoid rotten eggs coating my eyeglasses and rotten tomatoes sliding down my lapels.
A while before 8:00, Tom Kimer and I caught a cab down to the Hyatt Grand Central to join the rest of our group for last minute preparations—making sure our chairs were placed where we wanted them; checking the sound system; confirming that the sound and video feed to the coordinate site in Dallas was up and running; putting the microphone minders in place in case the plugs needed to be pulled; and so on. Members of the group asked how I was doing and whether I’d slept well. Most were in a good mood and several joked with me that if I wanted to ditch my assignment, no one in the group would accept my resignation.
As we moved around and chattered among ourselves, bondholders began to appear in ever increasing numbers. Twenty minutes before showtime it was clear that I’d be addressing a full house; a full ballroom—amidst the height of rush hour at the adjacent Grand Central Station. Several of my cohorts granted me the traditional performer’s send-off: “Break a leg.” Tom Kimer told me, “You’ll do fine.”
At a few minutes past 9:00, I rose from my chair and approached the lectern. In my measured stride I wanted to project dignified confidence, not the over-eagerness I felt to finish the meeting so I could escape to my provincial corner of the country.
* * *
I’ve saved many work files and papers, but my “opening statement” at that bondholders meeting is not among them. Packed away in some box from one of my many office moves is the video tape that was sent to me after the event. I watched it but once, soon afterward—which is now about 30 years ago.
What I do remember of the scene and my performance is that everything unfolded smoothly and without significant pushback. I laid out a chronology of our efforts, litigation mileposts, positive outcomes, clearly identifiable “next steps,” and an appropriate amount of hedging. I was in full command of my head and my words, and the further I waded into my presentation, the more comfortable I grew—and the more certain that a riot wouldn’t break out. I was even rewarded with polite applause.
As planned, I invited questions, and these were deftly handled by three pre-designated members of our herd of “cats and free-range cattle.” When individuals spoke into the floor mics that had been planted around the ballroom there was never a need to yank the microphone cord out of its receptacle.
To the collective relief of our group, the event proved to be . . . uneventful. We’d survived unscathed. And most important to me, I personally hadn’t been attacked, threatened, or humiliated. I’d discharged my role without dishonoring my employer or embarrassing Tom Kimer. In fact, he congratulated me generously when the show was over.
When the last bondholder had departed the ballroom and the figurative Klieg lights had been turned off, each member of our group of trustees and lawyers dispersed for home—all except I. I made my way to Port Authority where I caught a commuter bus over to Rutherford, New Jersey to visit my 100-year old grandmother. I’d stay long enough for a game of Scrabble, which she’d win—as usual.
“So what were you doing over in New York?” she asked, as I surveyed the board for an opportunity.
“Mmmm,” I replied. “A meeting.”
“Were you able to stay awake the whole time?” she asked.
“Oh yeah. No problem there.”
* * *
We were far from finished with the ELIC receivership—and our bondholders—but as with every endless case of that nature, eventually it runs its course and resolves. The receivership paid out—not enough for a full recovery but far more than was anticipated at the outset of the marathon case. The MDL class action was settled too, with each of the numerous defendants chipping in.
The billion bucks case triggered by The Junk Bond King, Michael Milken, the low genius of high finance, had finally wound down to the finish line. I was glad to be free of the daily conference calls with the herd of “cats and free-range cattle.”
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© 2024 by Eric Nilsson
[1] A subset of bondholders were “Johnny-come-latelies,” defaulted bond buyers at bargain-basement prices. They could get aggressive too but out of greed, not out of anger over their losses.
[2] This was a standard moniker we used within corporate trust. In the trust world, the trust instrument (indenture) and well-established law governing and defining the standard of care of a trustee often narrowly restrict a trustee’s discretion. These arcane guardrails must be observed to avoid the over-arching risk faced by a trustee: getting sued for exercising discretion. Accordingly, we often referred to the trustee’s role as being that of “a wooden headed” individual. Of course, the devil was in the details—such as when an aggressive and obstreperous manager of an institutional bondholder threatened to sue if we didn’t exercise discretion!
