Critical

3

"Rodger Naughton will be with you shortly," the priggish secretary said. "Would you mind taking a seat?" From Angela's perspective, the woman seemed more like an automaton than a real person. As many times as Angela had been to Rodger's office, she expected some small gesture of familiarity rather than cool indifference, and although Angela had anticipated the reception from having experienced it so often in the past, it still added to her discomfort.

For as long as Angela could remember, she had been an independent person, loath to ask people for favors, always determined to do whatever it was herself. As she grew older, this characteristic extended to asking for money. Yet there she was, sitting in the columned splendor of the Manhattan Bank and Trust with her metaphorical tin cup, forced to beg for a loan.

The only bright side was that Rodger's personality was quite the opposite of Miss Darton's. From their first encounter, Angela had found him to be friendly, helpful, and all around remarkably simpatico. Under different circumstances she would have looked forward to seeing him, but not today. From the moment she'd awakened, through getting Michelle off to school amid the continuing belly-button-piercing debate, through talking with the lead counsel about the previous day's MRSA death, and through reassuring Cynthia Sarpoulus that no one blamed her for the continuing infection problem, Angela had tried to come up with a strategy to talk Rodger into giving her a sizable personal loan or giving Angels Healthcare a commercial loan.

Unfortunately, she'd been unsuccessful in coming up with any ideas short of getting down on her knees and begging. As dire as the situation was, she'd do it if she thought it would help.

"Mr. Naughton will see you now," Miss Darton said. The only change in her expression was a slight lift to her eyebrows and a flutter of her eyelids.

Feeling like she was headed to the principal's office after having been nabbed committing an infraction such as smoking a cigarette in the girls' room, Angela headed into Rodger's office.

"Angela!" Rodger called out with alacrity as he bounded out from behind his desk with his hand outstretched. "So glad to see you. This is a treat. Normally, I have to deal with your CFO, not that I dislike Bob Frampton. He is very much a gentleman, but if I had my druthers, I'd prefer to deal with you directly. Now, don't you tell him that!" He laughed as he shook Angela's hand vigorously and guided her toward a seat facing his desk.

Angela sat and observed Rodger as he returned to his tufted leather high-backed desk chair. He was a handsome, boyish man with a carefully groomed appearance. He had fine, closely trimmed blond hair and pale blue eyes. His position at the bank was one of several healthcare relationship managers. As a business with no discernible ceiling to its growth, healthcare was of great interest to banks in general and to the Manhattan Bank and Trust in particular. When Angela had come to the bank five years previously to arrange for Angels Healthcare's first construction loan, she had been assigned to Rodger. Over the ensuing years, Rodger had worked with the company as its liaison with the bank, earning considerable money for the bank in the process. During this time, Angels Healthcare had built three multimillion-dollar hospitals, which had been veritable cash cows until the recent MRSA outbreak. It was this reality that Angela planned to emphasize and hopefully exploit.

"How is your daughter?" Rodger asked with sincerity rather than merely to make conversation.

"Other than some preteen angst, she's okay," Angela said, while her mind struggled with how to begin the quest for yet another loan. "And yours?" She knew Rodger had a girl a year older than Michelle, but that was the extent of her knowledge of the man's private life.

"She's struggling with the same issues. I'm learning that teenage daughters can be a handful."

Angela remembered her own teenage struggles all too clearly. It was during that stressful middle-school interval that her problems with her father had come to a head, never to be truly resolved.

"Angela," Rodger said. "I'm assuming you are here today about the call I made to Bob, your CFO. I want to reassure you it was pro forma bank policy. The margin on Angels Healthcare loans comes to my attention automatically when it nears a specific point. The problem, of course, is the bridge loan we arranged a little over a month ago, combined with the recent sale of bonds from your company's management account. It is bank policy that I, as your relationship manager, make the call. Rest assured, I am not calling any of the company's loans."

"I appreciate that," Angela said, groaning inwardly. His comments, although solicitous in trying to put her at ease, had the opposite effect. Rodger was, in effect, telling her that Angels Healthcare had no more credit. Regardless, Angela cleared her throat and added, "But your call to Bob was not the reason for my visit."

"Oh," Rodger said. He leaned back in his chair. "How can I help you?"

"I know you are aware of our upcoming IPO," Angela began. "Its scheduled closing is just a little more than two weeks away, so we are in the quiet period, meaning I cannot divulge any specifics. Let me just say that we have been assured the IPO will be successful."

"I'm happy for you," Rodger said. "An underwriting guarantee! Wow!"

"Congratulations may be a little premature. The short-term problem which prompted our need for a bridge loan a month ago has cost considerably more to fix than we had predicted. We need another bridge loan, but only for three weeks. The interest doesn't matter, and we can pay it up front."

Rodger leaned forward. His chair squeaked. He rubbed his forehead and breathed out through puffed-up cheeks. Then he looked across at Angela. He suddenly looked tired, and even a little sad. "What kind of money are you talking about?"

"Two hundred thousand is what we'd like, but we'll settle for what you could arrange."

"You are asking for the impossible," Rodger said. He took a deep breath. "When I said your company's loans were nearing the margin, I was not completely forthright. They are at the margin. I'm afraid you are fully drawn down on facility."

"Can't you make an exception?" Angela asked. She hated to plead but had no other choice. "You have been working with us for almost five years. You understand current medical economics. You know how well we are positioned. We will be the first specialty hospital company to go public after the senatorial moratorium was lifted this past October. You know that we will be tapping into an almost limitless amount of guaranteed revenue because of the way healthcare reimbursement favors procedures. You also know Angels Healthcare is going to mushroom into a very big company and you know Manhattan Bank and Trust will continue to be our bankers, with you as our relationship manager. I give my word. I'll even put it in writing."

"What about your personal assets?" Rodger asked. "I can get you a home equity loan. I'll facilitate it myself. I can have the money for you -"

"That will not work," Angela said, interrupting. "I've already maxed out the equity in all my personal assets, including my jewelry. Everything!"

For a few minutes, silence reigned in Rodger's office. The only sound was a ticking Tiffany desk clock. A narrow beam of sunlight streamed into the room. A million motes of dust danced silently in its glare.

Rodger sat back and spread his hands in the air. He shook his head. "I'm sorry. I cannot authorize a loan with no collateral. It's not that I don't want to: It's just not in my power to do so. I'm sorry, Angela. I admire you greatly as a doctor, a businesswoman, and a fine human being. I just can't do it."

"What about someone higher in the bank's hierarchy? Surely someone can authorize such a loan, especially considering the money the bank has made in the short run and will be made over the long haul."

"I'll try," Rodger said, without a lot of enthusiasm. "I'll send the request up the ladder to my superiors."

"Will you recommend it?" Angela asked.

"I will recommend they consider it," Rodger said, skirting the question.

"Thank you," Angela said. She stood, managed a half-smile, and shook hands with Rodger across his immaculate desk. It was then that she noticed the sole framed photograph on the desk was of a young girl. There was no family shot, nor a wife.

"I should tell you that even if the powers that be were to approve the loan, it would surely take several weeks to go through the process. I'm sorry, Angela. Please don't take it personally. If it were my prerogative, I would do it in a second."

Angela headed for the door. Five minutes later, she was on the street trying to hail a cab to ride downtown. Even though the outcome of the meeting was as she had anticipated, it still depressed her. Of the two meetings she'd scheduled that morning, the one she'd just had with Rodger had at least been cordial. The next one with her ex-husband, Michael Calabrese, probably wouldn't be; they almost never were. Although Angela truly loved and treasured her daughter, often she was regretful that the child tied her inexorably to continued and sustained contact with a man she wished she'd never met, much less married. Of course, she'd made the situation worse by allowing him, against her better judgment, to act as her fledgling company's placement agent back when she was initially founding Angels Healthcare.

The collaboration did not happen by forethought. Sharing custody required continual contact, and Michael had used the opportunity to quiz Angela about her experiences getting her MBA. Although Michael had been in the securities business with Morgan Stanley since graduating from Columbia, where he'd first met Angela, he never got a graduate degree. His curiosity about Angela's MBA experience had been a combination of genuine interest and also a kind of jealousy. Like her father, Michael had been challenged by Angela's medical degree, especially when his friends would tease him that she was the brains and he was the brawn. Even though they were divorced, Angela's getting an advanced degree in business, the arena he claimed as his area of expertise, had reawakened the negative feelings of insecurity that her scholarship engendered. Discussions would invariably turn into mutual irritation until the day Angela described a business plan she was creating as an exercise for one of her courses. When she finished the description, Michael had been so impressed that he'd encouraged her to actually do it as a real company. He told her he could get seed capital from what he called his "unique" clients. He never explained what he had meant by "unique clients," but Angela had reason to believe he was not merely bragging. Michael, by that time, had left Morgan Stanley to form his own boutique placement firm. In that capacity, he often worked with his former employer, Morgan Stanley, on IPOs, and was doing very well for himself.

Encouraged by Michael's urging, Angela had gone to several of her professors, who were also intrigued by her business plan, and she used their contacts to found Angels Healthcare. True to his word, Michael raised a portion of the seed capital from his clients, and even found the eventual "angel investor" as a syndicate of the same clients, which ultimately committed fifteen million plus a recent bridge loan convertible into stock at their discretion. However, the true success came from Angela's efforts, which raised the rest of the seed capital. During her MBA, she had moonlighted at University Hospital and, like a born saleswoman, had culled a group of eager university physician investors, who interested a number of colleagues, who interested more doctors from other institutions in a rapidly self-fulfilling process. Not only did all these physician investors contribute money, but once the hospitals were built, they also brought in the patients in droves, which was in essence the critical factor in the business plan and the source of the company's success.

Angela climbed out of the cab in front of a large marble-and-glass office building not too far from Ground Zero. Michael shared office space with a number of other independent financial wheeler-dealers. Each had their own private offices but shared common areas and secretarial services. It was a convenient relationship for all, since they got better quarters and services than they would if they were on their own.

Michael's office had an impressive view of the Hudson, with the Statue of Liberty standing midriver on her postage stamp-sized island. Across the river loomed apartment buildings in New Jersey.

Michael's door was ajar, and since the shared secretary was at a considerable distance, Angela merely walked in. Her ex was on the phone, leaning back in his chair with legs crossed and his feet perched on the corner of the desk. His jacket was hung over the back of his chair, his tie was loosened, and the top button of his shirt was undone. He was the picture of casual ease. Without interrupting his conversation, he motioned for Angela to sit on the couch.

Angela took off her coat, laid it across the arm of the couch, stashed her briefcase on the floor, and sat down. On the coffee table directly in front of her were the usual masculine appurtenances, including a decanter filed with an amber fluid, several cut-crystal old-fashioned glasses, and a polished mahogany humidor with a flush, inset humidity gauge. On the wall was a flat-screen TV with stock prices trailing along the lower part of the screen and silent talking heads above.

Just seeing her former spouse made her heart speed up but certainly not due to attraction, although she had to admit he was darkly handsome. His features were angular and rugged, and his anthracite-colored hair was slicked back. One hand held the phone; the other gestured wildly in the air as his conversation progressed. He was obviously trying to convince someone of something.

Angela had met him when she was a junior and he a senior at Columbia University, and he had swept her off her feet. She thought he was exactly what she was looking for. He was undeniably masculine, a good student, somewhat of a rebel, outspoken, seemingly honest, popular with and patriotic to his buddies new and old, passionate and outspoken about his attraction to her, romantic with little gestures like special-occasion flowers, and, particularly importantly to her, not afraid of showing emotion. In short, he was the opposite of her father, a personality profile Angela demanded in anyone she might consider for a long-term relationship. She even appreciated his blue-collar background and his confirmed allegiance to his high-school friends, few of whom had gone to college. It suggested he had good values. The only chink in the picture was that one night Michael had admitted that his domineering father had not spared the belt in his maniacal goal that his sons attend an Ivy League university. Since the modus operandi had worked for Michael, although not for Michael's older brother, Angela didn't pay heed to the old proverb "the ends do not justify the means," although she should have. In a big, ugly way, it would prove to be prophetic.

"All right, all right!" Michael said finally, while waving his free hand in the air as if batting away a pesky insect. "Get back to me!"

He positioned the phone receiver several inches over its cradle and let it drop. "God, some people are such assholes." Angela wisely held her tongue.

"So," Michael said, rising up to his full six-foot-three stature. "What's up?" He came around the desk, grabbed a side chair, swung it over to the coffee table, and mounted it backward. With his arms crossed and resting on the chair's back, he regarded Angela with a wry, challenging smile that unfortunately evoked enough unpleasant memories that Angela scrapped her initial plan of restricting the conversation to her company's desperate need for cash and then leaving. Instead, she said, "First, let's clear the air about some minor issues."

"Okay. What's your idea of minor issues?"

"Why on earth would you give permission to our ten-year-old daughter to get her belly button pierced before talking to me about it?"

"The kid wants it. Why not?"

"And that's enough of a reason for her to do it?" Angela asked with uncamouflaged disbelief. "Just because she wants it?"

"She told me all her friends have them."

"And you believed her?"

"Why shouldn't I? It's kinda a fad."

Angela instinctively knew it was a waste of everyone's time to continue the conversation. Michael had never been much of a parent – nor much of a husband. Only after they had gotten married did Angela learn that Michael had a "very blue-collar" idea of matrimonial duties. In his mind, his role was to come home from work, sit in front of the TV, and keep the family updated on current events, particularly in the sports world. And that was on those nights when he didn't have to meet his friends, supposedly for work-related dinners in lower Manhattan. Gone were the romantic gestures and compliments. Angela became pregnant and put up with their failing relationship, vainly hoping the birth of the supposedly longed-for child would turn Michael back into the person he'd been during the courtship. But Michelle's arrival only made Angela's life more difficult, as she desperately tried to balance graduate medical training in internal medicine with the rigors of parenting a newborn. Michael had refused to help except in very superficial ways. He even openly prided himself for never having changed a diaper. Such duties were simply below the dignity of a young, hotshot, rapidly rising investment banker.

"Listen," Angela said, trying to keep herself as calm as possible, "let's not argue, but I assure you all her friends do not have them. And there's always the risk of infection."

"They can have problems with infection?"

"Yes, indeed! But the point is that when something like this comes up and you think there is any chance I might feel strongly about it, talk to me before making a decision."

"Fine," Michael said, with a roll of his eyes. "Okay, you made your point about the piercing issue. What else? You implied there was more."

"Yes, there is," Angela said, trying to think of the right words. "I want to let you know under no uncertain terms that your telling Michelle that it is my fault you and I are divorced is unacceptable. Trying to get Michelle to take sides in a problem that is between you and me is not okay. You have to stop."

"Hey, I didn't file for divorce, you did," Michael said. "I didn't want to get divorced."

"Who files for divorce has nothing to do with cause," Angela snapped. "It was your behavior that got us divorced."

"So I got drunk and hit you. I said I was sorry. What are you, perfect?"

"I wasn't the one having affairs. And you got drunk and hit me more than once."

"I wasn't having affairs. I was just blowing off steam. A lot of the guys do it, especially when their wives are off to the Hamptons in the summer. It doesn't mean anything. It's just booze and entertainment."

"We live on different planets," Angela said. "But I didn't come here to argue. The past is the past for us, except for Michelle and Angels Healthcare. For Michelle's sake, don't talk about whose fault the divorce was. You can think one way, and I another. Just don't mess up her head pointing fingers. All I say to her is that it just didn't work out. I don't try to influence her relationship with you. That's totally between you and her."

"All right," Michael said, with another roll of his eyes. Ultimately, he didn't care. From his perspective, his current life was far better than his life when they were married. But at the time it had bothered him that Angela had the gall to file and embarrass him. He'd never expected it. None of the other guys got divorced. Hell, some of them had known, steady girlfriends and even allowed themselves to be seen in public with them.

"What we really need to talk about is Angels Healthcare," Angela said.

"I hope you're not here to tell me that accountant of yours filed the damn eight-K."

"No, that's not why I'm here," Angela said with a shake of her head. "I haven't seen him yet today. I was in the office only briefly before going to the bank, then coming down here. But why are you asking me if he filed? You assured me you knew someone who could talk to Paul Yang, and there wouldn't be a problem."

"True," Michael said simply. "So what is it that you want to talk about?"

"I need to raise more money. If I don't, I'm not certain we are going to make it through the IPO with our current cash flow. You have to help!"

"You're not serious."

"I'm very serious."

"What the hell happened to the quarter of a million I raised for you a month ago?"

"It was more than a month."

"That's one hell of a burn rate."

"It's not all gone, but yes, it is a rapid burn rate. A sizable portion went out to suppliers. But the real draw is keeping three hospitals open with very little revenue."

"But you told me last time you were here that you were dealing with an infection problem, which was soon to be under control. You said that your revenue stream would quickly recover."

"It hasn't happened."

"Why the hell not?" Michael demanded.

"When I was here last, our ORs were closed. Apart from loss of revenue, the cost of containing the infection was four times our estimate, but things are looking up. The ORs are now open, but our census is low. Except for a few stalwart individuals, our doctors are still gun-shy. Things will turn around rather quickly but not soon enough."

Michael ran a nervous hand across his forehead and gazed out at the placid expanse of the Hudson River.

Angela watched him and knew him well enough to recognize true anxiety. He did not like what he was hearing. He was upset a month ago when she'd come with her woes, and he was more upset now. Not only had he committed a lot of his client's money to Angels Healthcare, he'd committed a lot of his own, not to mention his working relationship with Morgan Stanley, who he'd convinced to be the underwriter for the IPO.

Michael looked back at Angela. He nervously licked his lips. "What kind of money are we talking about here?"

"My CFO says we'd be confident with two hundred thousand."

"Holy shit!" Michael exclaimed, leaping off his chair to pace his office. "Tell me you are joking," he said, suddenly stopping and staring at Angela with an expectant expression. "Tell me. You're highballing me as a psychological ploy."

"I'm telling you straight. This is too serious a situation to be joking or playing games."

"What the hell is your crackpot CFO doing with all the cash?"

"Michael, it is expensive to run three hospitals. You've seen our books. Salaries alone are enormous, and the costs don't stop just because the revenue does. The eye hospital and the heart hospital are producing some cash, but the ortho hospital is producing almost none. We've let a few people go, but we are limited unless we want to call attention to our cash-flow problem, which we don't. Many of us haven't taken any salary for months."

"I'm getting more than a bad feeling here. Yesterday, you call me about the problem with the accountant. Today you pop in, asking me to raise another two hundred grand! What's it going to be tomorrow?"

"Wait a minute!" Angela said. "You're the one who offered to help with the accountant when the issue arose a week ago. You said you had people who could convince him that filing the eight-K wasn't necessary."

Angela waited for a moment before continuing. "We only need the money for three weeks, tops. Angels Healthcare will then be swimming in cash, even taking into account the obscene amount we have to pay Morgan Stanley."

"Don't begrudge Morgan Stanley's take. They are the ones assuming the most risk here, and from what you are saying, it's even more than they think."

"Go back to your clients! Offer them whatever you need to. I tried the bank, and I pleaded with Rodger, but it's a no go."

"I can't go back to my client," Michael said, decisively suggesting that there was no room for discussion.

"'Client'? I thought it was clients?" Angela said. She was confused. He'd always said clients and used the word syndicate. She was certain.

"It's really one client," Michael said reluctantly.

"Why can't you go back to him? Surely he doesn't want to risk his generous payoff, with as much stock and options as he controls."

"That's what I said when I went back for the quarter of a million."

"Tell him again. I assume he's a smart man. Tell him exactly what I told you, that the ORs are open."

"He is a smart man, especially about money. If I go back to him at this point, he'll know we are desperate."

"We are desperate."

"Whether it is true or not, it is a bad negotiating position. He might demand to take controlling interest."

It was now Angela's turn to stare out the window at the river. The idea of losing control of her company was anathema after all her effort. Yet what other options did she have? For a brief moment, she thought about going back to the practice of medicine and giving up the entrepreneurial lifestyle. But the thought was short-lived. She was realistic enough to know that the freedom her current lifestyle afforded her, at least prior to the current cash-flow problem, had become addictive. She couldn't help but recall her disastrous experience with her primary-care practice and the realities of the current healthcare reimbursement, which was totally out of her control. Also, she reminded herself that if nothing else, she was persistent. She wasn't going to give up now that she was fifty yards from the finish line after a ten-mile race.

"Let me talk to your client directly," Angela said, breaking the silence. She had suddenly redirected her attention to Michael, who'd sat back in his chair. A few dots of perspiration had appeared along his hairline.

"Oh, yeah, sure!" Michael mocked, as if it was the most ridiculous suggestion she could possibly make.

"Why not? If he has any questions, he can ask them directly instead of through you. I can reassure him. With all the experience I've been having, I'm getting good at convincing investors."

"My client has made it abundantly clear he only wants to talk to me about investment issues."

"Oh, come on, Michael. I'm not going to steal your client. Don't be so paranoid."

"It's not me who is paranoid, it's him. Just so you understand the situation, there's several shell companies between him and his position in Angels Healthcare, as well as with several other pending deals."

"Why so much secrecy? Is there something here you're not telling me?"

"I'm only following his orders."

"Is he your major client in most of your placement deals?"

"Let's just say he's a big player. I can't be more specific."

Angela eyed her ex. This need for secrecy added to her general unease. Although she truly didn't know why it was apparent that Michael had no intention of enlightening her further. Instead of pressing him, she said, "Why don't you raise the money from someone else? Make it a sweet deal to one of your other clients."

"It's too short a time frame for that. There's no one I know whom I could approach."

"Then what about yourself? I've already maxed out all my equity."

"Me, too."

"What about your jet?"

"It's pledged to the hilt. Hell, it's been on one hundred percent charter as well."

Angela threw up her hands and stood. "Well, there's not much more I can say or do. I'm afraid all our fates are in your hands, Michael. You are our placement agent, for better or worse."

Michael breathed out noisily. "Maybe I can come up with fifty grand," he said reluctantly. After everything he'd all but promised people, if this IPO stalled, he knew he'd be in deep trouble, and not just financially.

"That's a start," Angela said. "I can't say it will guarantee success, but it will be much appreciated. What do you want as compensation?"

"Twelve percent as a loan, but convertible at my discretion to one hundred thousand dollars of preferred stock."

"Jesus Christ!" Angela murmured, then, in a normal voice, added, "I'll have Bob Frampton call you as soon as I get back to the office. When can we expect to have access to the cash?"

"In a day or so," Michael said distractedly. He was already trying to think of how he'd manage to cobble together the funds. He had not been joking when he told Angela he was maxed out, although he did have some gold futures he'd kept out of the mix for a disaster. He reasoned that this might be the disaster.

"I'll be at the office putting out fires if you have any bright ideas," Angela said as she got her coat and briefcase. She looked back at Michael before leaving. He'd gone back to staring out the window.

As she walked to the elevator, she vaguely thought that Michael was his own worst enemy. She also thought of the proverb that you can take the boy out of the country, or in this case his old neighborhood, but often you could not take the country out of the boy, especially since Michael had moved back to his old neighborhood after the divorce. To Angela, Michael's story smacked of a Greek tragedy. Michael was a smart, well-educated, handsome, and often charming individual who had the potential to be successful on many fronts, yet he had a tragic flaw: He was a prisoner of his past, when he had unknowingly absorbed indelible and ultimately harmful allegiances, attitudes, and values.

Thinking in this vein about Michael, Angela couldn't help but reflect for a moment about herself. As a realist, she knew that she too carried some emotional baggage from her past, and her current life was far from serene. As she boarded the elevator, she wondered if she too had a tragic flaw that could explain how she had gone from a very idealistic first-year medical student to where she currently was: begging for money from a man she despised to prop up a nascent financial empire.