Barbara sent me a real neat picture of cousins. I've tried to post it but will need help.
The "Great Walla Walla Produce Caper"
I guess to put it in context I should mention that for many years B., Barer & Sons suscribed to the Wall Street Journal. It was chock full of information. In fact so full the issues seem to pile up but we felt it was a necessary tool to keep track of metal markets and the general economy.
Most people who wandered into our office and saw the paper thought we must be investing in the stock market. They would have thought we were kidding if we told them that our vest pocket business tucked away in a small Eastern Washington farm town was importing and exporting from such countries as Taiwan, India, South Africa, Brazil, Australia and various European countries.
Reading the business paper, we couldn't escape the stories of the take over raids of Carl Icahn, Boone Pickens, and the like, the corporate raiders.
So I wasn't surprised when I approached my Uncle David Barer and he set aside his usual conservative approach to business to join me and my partners in the venture.
The Walla Walla Produce Company was a venerable institution going back in history to the days when Walla Walla was the center for a vast trading area. Several years prior it had moved from a downtown location at Main and Palouse to a much more modern building on Reese Avenue.
One of the features of the building was a large area for the storage of frozen foods. Not only did they purvey fresh produce to their retail customers they could also supply frozen foods as well.
Also kept on hand was several days supply of TV dinners at the ready in case there was an extended "lock down" at the state prison.
One of the merchandising gimmicks employed by the produce company was the issue of participating shares in the company as a form of rebate to the retailers they supplied. In the days of the company's prosperity dividends were paid but as the company's profits dwindled so did the value of the shares.
The Great Walla Walla Produce Caper was hatched when Bobby Freeman whose in-laws had operated a small grocery store and had become heir to some shares approached Gene Valaer with the idea of buying two thirds of the widely dispersed stock and disolving the corporation thereby voiding an onerous union contract and making the building available for possible rental or sale to another local wholesaler who was looking was looking for space to store frozen food.
Uncle Dave had at that point pretty much retired spending more time at the country club playing gin rummy then at the business but when I mentioned that Gene had invited us to join in the hostile raid he revved up to full speed.
We started an endless round of meetings. With the lawyer, the accountant, and of course with the Baker Boyer Bank. We started with the president of the bank who was, as bankers are, very skeptical. One of the owners of the bank was intrigued and sat in. The president asked what we had for collateral at which point Uncle Dave said, "Quit stalling, look who your dealing with." We were granted a commitment of the hundreds of thousand dollars to buy the stock if it was tendered per our solicitation.
The tender offer went out and signed offers of stock began arriving. Then came a lawsuit alleging a number of irregularities. It seems one of the other stockholders had the same idea and we had beat him to the punch.
More meetings. This time the lawyer for the Bank requested to sit in to determine if they had any exposure.
Meanwhile the tenders of stock began to pile up as the holders saw a way to cash in their worthless stock. One of the larger holders who had not commited was Don Sherwood who owned stock through his ownership of Gardner's department store.
I asked Bill Harris who had helped me on many occasions and was now Don's adminstrative assistant to check with Don and get his intentions. The answer was simple - If you guys can make money doing this so can I.
We finally secured commitments for 62% of the stock. Enough to control the company but not enough to disolve it.
One more meeting. Based on the facts the the company profits were slim if any and that no commitment for the property was forthcoming the vote was to send a legal letter rescinding the tender with a thank you.
Our competitor promptly dropped his lawsuits against us and proceded to initiate a tender of his own. One of the contentions that was used against us was that we would close the business throwing the employees out of work. When he assumed control of the company adding his stock to the tender he did just that.
The "Caper" took a lot of time and energy and splitting our share of about $25000.00 in expenses in a failed effort but I thoroughly enjoyed the chase and I'm sure Uncle Dave did too.
The "Great Walla Walla Produce Caper"
I guess to put it in context I should mention that for many years B., Barer & Sons suscribed to the Wall Street Journal. It was chock full of information. In fact so full the issues seem to pile up but we felt it was a necessary tool to keep track of metal markets and the general economy.
Most people who wandered into our office and saw the paper thought we must be investing in the stock market. They would have thought we were kidding if we told them that our vest pocket business tucked away in a small Eastern Washington farm town was importing and exporting from such countries as Taiwan, India, South Africa, Brazil, Australia and various European countries.
Reading the business paper, we couldn't escape the stories of the take over raids of Carl Icahn, Boone Pickens, and the like, the corporate raiders.
So I wasn't surprised when I approached my Uncle David Barer and he set aside his usual conservative approach to business to join me and my partners in the venture.
The Walla Walla Produce Company was a venerable institution going back in history to the days when Walla Walla was the center for a vast trading area. Several years prior it had moved from a downtown location at Main and Palouse to a much more modern building on Reese Avenue.
One of the features of the building was a large area for the storage of frozen foods. Not only did they purvey fresh produce to their retail customers they could also supply frozen foods as well.
Also kept on hand was several days supply of TV dinners at the ready in case there was an extended "lock down" at the state prison.
One of the merchandising gimmicks employed by the produce company was the issue of participating shares in the company as a form of rebate to the retailers they supplied. In the days of the company's prosperity dividends were paid but as the company's profits dwindled so did the value of the shares.
The Great Walla Walla Produce Caper was hatched when Bobby Freeman whose in-laws had operated a small grocery store and had become heir to some shares approached Gene Valaer with the idea of buying two thirds of the widely dispersed stock and disolving the corporation thereby voiding an onerous union contract and making the building available for possible rental or sale to another local wholesaler who was looking was looking for space to store frozen food.
Uncle Dave had at that point pretty much retired spending more time at the country club playing gin rummy then at the business but when I mentioned that Gene had invited us to join in the hostile raid he revved up to full speed.
We started an endless round of meetings. With the lawyer, the accountant, and of course with the Baker Boyer Bank. We started with the president of the bank who was, as bankers are, very skeptical. One of the owners of the bank was intrigued and sat in. The president asked what we had for collateral at which point Uncle Dave said, "Quit stalling, look who your dealing with." We were granted a commitment of the hundreds of thousand dollars to buy the stock if it was tendered per our solicitation.
The tender offer went out and signed offers of stock began arriving. Then came a lawsuit alleging a number of irregularities. It seems one of the other stockholders had the same idea and we had beat him to the punch.
More meetings. This time the lawyer for the Bank requested to sit in to determine if they had any exposure.
Meanwhile the tenders of stock began to pile up as the holders saw a way to cash in their worthless stock. One of the larger holders who had not commited was Don Sherwood who owned stock through his ownership of Gardner's department store.
I asked Bill Harris who had helped me on many occasions and was now Don's adminstrative assistant to check with Don and get his intentions. The answer was simple - If you guys can make money doing this so can I.
We finally secured commitments for 62% of the stock. Enough to control the company but not enough to disolve it.
One more meeting. Based on the facts the the company profits were slim if any and that no commitment for the property was forthcoming the vote was to send a legal letter rescinding the tender with a thank you.
Our competitor promptly dropped his lawsuits against us and proceded to initiate a tender of his own. One of the contentions that was used against us was that we would close the business throwing the employees out of work. When he assumed control of the company adding his stock to the tender he did just that.
The "Caper" took a lot of time and energy and splitting our share of about $25000.00 in expenses in a failed effort but I thoroughly enjoyed the chase and I'm sure Uncle Dave did too.
posted by Alan L. Barer at 10:37 PM
4 Comments:
If you had been successful, you might have encountered a lot of ill will from folks who would blame you for putting them out of work. That is an inherent problem when playing corporate raider in a small town. There is a lot of merit in the old saying about not doing certain things where you sleep.
I also remember that you and Uncle Dave for a long time would answer the phone "hello" rather than identifying the store like businesses usually do.
Just a piece of Trivia!
The "Hello" ended when I received a business call from my friend Lawrence Petal He was taken aback momentarily by the greeting and then asked if we had an unlisted number as well. I got his point.
Dad
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