Sparring Partners(64)
Thirty years earlier, when Bolton Malloy made a killing by suing Honda for its defective three-wheelers, he hired Old Stu to keep him out of trouble with the IRS. As things evolved, the IRS wasn’t the problem. Bolton’s wife, the late and forgotten Tilda, routinely terrorized the office looking for money. Colluding with Bolton, Stu learned to hide as much as possible from Tillie. Shifting fees here and there became an established practice at Malloy & Malloy.
To avoid prying eyes, Old Stu worked alone in his little hidden corner of the building. He had fired so many secretaries and assistants over the years that even the thought of training another one was exhausting. He relished his privacy and did his work without the slightest hint of supervision. No one from the firm ever went near him, primarily because no one from the firm was welcome. Except Diantha. He had a soft spot for her and they could talk about anything.
These days the hottest topic was the firm’s survival.
She tapped on his door and entered before he said anything. He was standing on the treadmill, staring at the screen of an antique computer, crunching numbers. He rarely smiled but always managed one for her.
“Come in, dear,” he said, suddenly warm and welcoming. He stepped down from the treadmill and waved his hand at a dusty sofa in a corner.
“More bad news,” she said as she sat down.
“Rusty lost another one?”
“Yes. He asked the jury for thirty-five million dollars. He got nothing. Zero. Defense verdict.”
Stu sighed as his shoulders sagged. He fell into a chair and looked at her in total defeat. “Two hundred and seventeen thousand dollars, at last count. Not including the final bill from Carl, and we know that Carl’s final bills are always suitable for framing, don’t we?” He threw up both hands and said, “Poof.”
“This one will get worse. Rusty had a chance to settle last night for a lousy million, but he said no. Said it quickly before he thought about running it by his client. A million bucks would have covered our expenses and given the clients some change. I expect a malpractice notice very soon.”
“Well, we’ve certainly seen them before, haven’t we?”
“Too many. Rusty’s out of control and I’m not sure how to rein him in.”
“It’s in his blood, Diantha. Not too many years ago he was the most feared courtroom lawyer in the state, at least in civil cases.”
“Oh, I remember. Those were the days. Now he’s lost his touch.”
They studied the dust on the coffee table. After a moment she said, “Even more bad news. I’m going to see Bolton tomorrow.”
“Why?”
“It’s Kirk’s month to go but he’s meeting with his new divorce lawyer in the morning. The divorce will be a mess. I’m sure all of your records will be put on the table.”
“Bring ’em on. Which set should I show them?”
She smiled at his candor and knew he wasn’t joking. She asked, “When Kirk and Rusty go visit Bolton, don’t they take the current financials?”
“Among other things. Bolton wants the prior month’s profit-and-loss, and year-to-date. Says he wants to know what’s happening in ‘his firm.’ Rusty went last month and according to him the old man wasn’t too happy with the numbers. Rising overhead. Declining income.”
“Why does he worry? He’s not coming back here. He’ll never get his license back, plus he’ll have the tobacco money.”
Old Stu smiled and repeated, “The tobacco money.”
(17)
The tobacco money.
In 1998, the four largest tobacco companies in America agreed to settle a series of massive lawsuits brought by forty-six states to seek reimbursement for the medical costs of smoking. The amount was over $300 billion, the largest civil settlement at that time. The companies also agreed to pay over $8 billion to the lawyers who had cooked up the litigation and brought the industry to the bargaining table. This, obviously, was an unheard-of bonanza for the plaintiffs’ bar, or at least for those lawyers who had rolled the dice and signed on early.
A trial lawyer friend he admired had convinced Bolton Malloy that the litigation was worth the risk. In the beginning, the lead lawyers desperately needed cash to fund the ever-expanding litigation, and they were passing the hat and rounding up investors. Bolton wrote a check for $200,000, over the objections of his two sons and everybody else in the building. Four years later, the tobacco companies, always on the defensive, wanted a truce and were willing to pay for it.
In the frenzy that followed, some lawyers got filthy rich. Those at the top of the pyramid had put serious skin in the game and taken enormous risks, and they were compensated first. One small firm in Texas was awarded $500 million. The money flooded down to the others and the payouts were based on the amounts invested. Bolton’s share came to $21 million, money he planned to keep for himself.
As usual, his wife knew little of the firm’s inner workings because Bolton had always tried to keep her in the dark. He put a lid on the settlement gossip and refused to talk about it, though he privately reminded his two sons that they had scoffed at the tobacco litigation and warned him to stay away from it. Bolton wanted a divorce but couldn’t stomach the thought of a protracted fight with hungry lawyers poring over his records.
Buying into the lawsuit proved to be his first brilliant move. His second was to defer payments of his fees and structure them so that they would be invested but not paid for ten years. Maybe in the meantime he could get a divorce, or even better, maybe his wife would just up and die. Her health was fragile.