Scary “Tricks” Played on Companies

Scary “Tricks” Played on Companies

In honor of Halloween, I’d like to share some of the scariest situations I’ve encountered at companies. Unlike Halloween, no one asked whether these companies would like a “Trick or Treat.” They just got tricked.

Here are just a few of the situations I’ve encountered:

• A son who was stealing from his father’s business because he thought his salary was too low. After dad died and mom was made CEO, instead of him, he was so angry he confronted his mom with a knife. Talk about “A Nightmare on Elm Street.” Wonder if he ever got invited to Thanksgiving dinner again. I bet he doesn’t get to carve the turkey.

• A CFO who was been stealing a business blind but the CEO wouldn’t believe it. (He did once we presented him with the folder from the CFO’s computer desktop with a list of all the money he stole and how he spent it. How I love an organized thief.) His father-in-law paid it off so he wouldn’t go to jail!

• A business owner who lost his boat building company because he proudly appeared on the cover of a magazine with his bikini-clad girlfriend in the background. His wife was not amused. She filed for divorce and got control of the company, which was started with her daddy’s money.

• A Texas-based company that overstated its inventory and received a larger loan that it should have qualified for and defaulted on the interest payments. . When I took over as CEO, I discovered that we were $75 million short in inventory. That’s a number that will keep you up at night. The bankers were stunned and prosecuted the CEO and CFO!

• A company president who owed the mob several hundred thousand dollars for gambling debts was stealing and giving the merchandise to the mob right from the plant loading dock at night. The mob then applied the value of the items to his debt. These guys didn’t even have to wait for merchandise to “fall off a truck.”

• A refrigerator warehouse company forced into bankruptcy because the CEO was paying more attention to his hobby of breeding the perfect bull and less on keeping frozen things frozen. Which is kind of crucial to a refrigeration company. I had to liquidate both the company’s and his hobby’s assets, so I held an auction to sell the bull sperm. It went for the discount rate of $75,000 a gallon. So somebody got a treat that day — a deal on bull sperm. And that’s no bull!

• A production manager at a designer haute couture manufacturer was selling the overrun of $5,000 dresses to discount retailers. That worked so well, he eventually escalated his scheme and bought excess material that he wrote off as scrap and then had it made into dresses to also sell out the back door.

• A bookstore where the controller diverted the Discover merchant account for his own use. The stores kept routinely depositing into it and ended up paying off the guy’s entire mortgage. A federal judge sentenced him to five years!

The lessons learned from these types of occurrences are that you have to keep your eye on every aspect of your company and trust your gut when things don’t seem to add up.

The scariest part? These things could happen to your company. And there’s definitely no treat involved.

The Lessons I Learned from Bull Sperm

Did you know that top notch bull sperm is worth in excess of $75,000 a gallon?

This is something I know personally thanks to Fred, the CEO of a refrigerator warehouse company in Texas, who, instead of grabbing the bull by the horns, kept his eye on the ball a little too much.

Fred’s hobby was breeding the perfect bull. He wanted the black spots on one side and the white spots on the other side, but he got it backwards and had to keep working. Thinking that breeding the perfect bull would be the next step in his career, Fred put all of his time and energy into this hobby and none into the “no-ball” endeavor of actually saving his family’s struggling refrigeration business.

Fred bet the ranch.

If Fred had been more concerned about getting busy with his business rather than his bull, he may have saved the company. Unfortunately, though, the core competency of his company was not bull sperm. It was refrigeration.

Thus, Fred’s hobby got in the way, and he stopped paying attention to refrigeration. When the bank realized that Fred was distracted, they defaulted him on his loans and brought me in.

I had a mismanaged and neglected refrigeration company to deal with that was over $500,000 behind in debt to the bank, had maintenance issues that created spoiled product for its clients, and that had a CEO who was focusing on bull balls rather than the family jewels.

Since the company was already being forced into bankruptcy and on the path to being sold, it was my job to recover as many assets for the bank as I could. I fired his 85 year old mother who was on the payroll, and even though the bank thought the bull seed was worthless, I held a little auction at which I sold off bull sperm by the gallon at anywhere from $75,000 – $100,000.

When your company is having difficulties, put your hobbies aside and keep your eye on the prize – not your eye on the ball.