Free Web NovelAlan Schwartz, whose face had gone completely pale, and Eva, who was looking at him with a radiant smile.
Their reactions could not have been more different.
Eventually, Alan Schwartz let out a deep sigh and put the documents down.
Seeing this, Eva spoke.
“As you can see, our claim is completely legal and fully justified. Is there a problem?”
Alan looked at Robert, and Robert shook his head, signaling that there were no legal issues whatsoever.
When Eva glanced toward David, he pulled out another set of documents and handed them over.
Smiling brightly once more, Eva continued.
“Then shall we discuss the method of payment?”
Realizing there was no way out, Alan sighed deeply and pleaded.
“It is impossible for us to pay that amount all at once. The current situation of our company...”
Seeing that the explanation would drag on, David cut him off.
“That is why we're only seeking payment for ten billion dollars for now. Our clients have already shown considerable consideration for Bear Stearns with this decision.”
“...I understand. But honestly, even ten billion dollars would be difficult to pay immediately.”
“Then we have no choice. We'll have to file a lawsuit.”
Without the slightest hesitation, David began gathering the documents in front of him.
The Bear Stearns executives were the ones caught off guard.
“No, we're talking about negotiating. Negotiation...”
“What exactly is there to negotiate? We're making a legitimate demand for payment. Why should there be any negotiation?”
At Eva's firm response, Alan Schwartz desperately said,
“Please take our circumstances into consideration. We'll pay in installments over three years.”
“Installments? Are you certain Bear Stearns won't go bankrupt within those three years? Because I'm not.”
“......”
“And even if you spread the payments over three years, once all the insurance claims we hold are filed, Bear Stearns will still have to pay at least ten billion dollars annually. We haven't even begun yet, and you're already talking like this. What exactly are we supposed to trust and wait for?”
Eva's demeanor was so cold that not even a needle could slip through it.
Yet Alan did not speak rashly.
For him, a lawsuit had to be avoided at all costs.
Once litigation over insurance payments began, bankruptcy would be inevitable.
Courts only looked at contracts.
“What would it take for you to make concessions?”
“If the installment plan is to satisfy us, Bear Stearns will first have to pledge all of its assets as collateral. Start by using all Bear Stearns shares held by other financial institutions as collateral. And...” freewebnσvel.cøm
Eva's demands were utterly unacceptable.
Leaving everything else aside, there was no way those institutions would agree to pledge their shares for Bear Stearns.
“What about using only the shares owned by management as collateral?”
“With less than ten percent ownership? What kind of guarantee is that? At current market prices, those shares are little better than wastepaper.”
Back in the spring of 2007, Bear Stearns stock had approached two hundred dollars a share.
Now, it was trading at barely twenty.
And Eva wasn't done.
“We do not trust Bear Stearns' current management. Former Chairman and current Board Chairman Jimmy Cayne already stepped down as chairman and CEO to avoid responsibility.”
“That's...”
“If you're going to tell me that nonsense about stepping down to take responsibility, don't bother. Maybe your family would believe that excuse, but everyone on Wall Street knows exactly what it means.”
Alan Schwartz sighed deeply.
“Make a proposal we can actually accept. Otherwise, bankruptcy awaits us either way.”
“Yes. Then let's proceed with the lawsuit. David, let's go. There doesn't seem to be any room for negotiation.”
David nodded and began placing the documents back into his briefcase.
“Tomorrow, we'll begin preparing the complaint. And by then, it won't be ten billion dollars. It'll be a lawsuit over the entire thirty-four point one billion dollars.”
“Wait! You can't just leave like this. Negotiation means both sides have to give and take. If you just force things like this, it puts us in an impossible position.”
Sam Molinaro hurriedly stood up and tried to mediate.
“You understand that your options are limited. Either accept our proposal or meet us in court. And what do you think will happen if this becomes public?”
The outcome was obvious.
Eva's companies weren't the only ones holding CDS contracts.
The parties that had been waiting on the sidelines would naturally rush to demand payment as well.
“I know. I know. Alan, this isn't the time to keep saying no. If this turns into litigation, we won't be able to contain it.”
“Sam, you know why we can't accept those demands. Do you really think other financial institutions would hand over their shares for our sake?”
“Well, if we negotiate...”
“They're the type to demand even more, not less. Wall Street is a jungle. The moment someone shows weakness, they're torn apart. There are no eternal enemies and no eternal allies.”
As if she had been waiting to hear that, Eva smiled.
“Alan is right. We could've been allies. Alan, isn't that true?”
Alan Schwartz frowned.
“What do you mean?”
Eva shrugged and turned around.
“Think carefully. We don't have much time to give you. {N•o•v•e•l•i•g•h•t} David, how long will it take to prepare the lawsuit?”
“A week should be enough to file it.”
“Mmm. Can't we do it faster?”
As they headed toward the exit, Eva and David continued their conversation loudly enough for everyone to hear.
“If we push ourselves, perhaps five days. But the costs...”
“Don't worry about the costs. We won't be the ones paying them.”
“Oh my! In that case, I'll make sure the complaint is filed as quickly as possible.”
The two left the conference room.
The people who remained could only stare blankly at the closed door.
* * *
A day passed after Eva's negotiations with Bear Stearns collapsed.
[Bear Stearns Faces Difficulties in CDS Insurance Claim Negotiations]
Wall Street giant Bear Stearns is facing an unprecedented financial crisis.
News spread through Wall Street that five investment firms were preparing to file claims totaling $34.1 billion under Credit Default Swaps (CDS).
The amount far exceeds Bear Stearns' assets and threatens the company's very existence.
According to multiple sources, the rights to those insurance claims have been entrusted to the CEO of a Hong Kong-based investment firm.
Yesterday, renowned Wall Street attorney David visited Bear Stearns and held talks with CEO Alan Schwartz and senior executives.
(Excerpt omitted)
While the results of the negotiations have yet to be disclosed, an anonymous participant stated,
“Their negotiation tactics were downright violent.”
After describing them as “cold, rational, and uncompromising,” the source declined further comment.
The incident is seen as an extension of Bear Stearns' liquidity crisis.
As mortgage-backed securities held by Bear Stearns plummeted in value, the CDS contracts held by investment firms were triggered.
Financial experts are worried about the impact this could have on the entire financial system.
Professor John Coffee of Columbia University warned,
“If Bear Stearns cannot meet these obligations, a domino effect could put other financial institutions at risk.”
Meanwhile, the Federal Reserve Board and the Treasury Department are reportedly watching the situation closely.
A senior government official stated only that “all options are under consideration.”
This crisis could develop into an event that reshapes the entire Wall Street landscape.
It would not be an exaggeration to say that the fate of Bear Stearns and the direction of the financial industry itself depend on the outcome of these negotiations.
After reading the article in The Wall Street Journal, I lowered the newspaper.
This wasn't the article I had intended.
Information must have leaked somewhere.
It couldn't have come from our side, which meant Bear Stearns had deliberately leaked it.
“So they're playing it this way.”
They were probably trying to shape public opinion and delay the insurance claims.
The anonymous interview made that obvious.
The use of the strong and instinctive word “violent” was proof enough.
Still, they hadn't openly revealed Eva's identity.
“Eva, I guess you really are good at negotiating. They're writing articles like this.”
Eva, sitting across from me, smiled brightly.
“Of course, Boss. Who do you think I am?”
“That's my Eva.”
“By the way, what are we doing now?”
“Well, if they accept the card we put on the table, we might give them more time...”
As I trailed off, Eva shrugged.
“You know better than anyone, Boss. It's a card they can't accept. Unless the government steps in, there's no way other financial institutions will put up their shares as collateral.”
“That has nothing to do with us. If they're desperate, they'll find a way. Right?”
“Ugh... Boss really is terrifying when he sets his mind on something.”
Just then, Manager Ma entered.
“Boss, Alan Schwartz has requested a meeting.”
“He must be desperate.”
“I dropped a hint. Looks like he had no idea.”
“Honestly, unless he paid attention, he wouldn't know. This was probably the first time he'd even heard your name.”
“For someone hearing it for the first time, he sure made me famous.”
I chuckled at Eva's surprised expression.
“Because we're the ones holding all the cards.”
“Holding all the cards? What does that mean?”
“It means we're in the superior position.”
“Oh, I was wondering. What are you going to do? Meet him?”
“Of course. Eva, you head back and wait.”
“All right. Call me later.”
After sending off Eva, who made a telephone gesture with her hand and waved, I turned to Manager Ma.
“Tell him to come here.”
“Yes, Boss.”
Several hours later.
I stood looking out at Manhattan's night view.
“Boss, Bear Stearns CEO Alan Schwartz has arrived.”
I closed my eyes for a moment before opening them.
“Send him in.”
Soon, Alan Schwartz entered the penthouse with Manager Ma.
Gone was the confident man I'd seen at the charity party.
Instead, he looked exhausted and utterly worn down.
“Charlie, I'm sorry to come so late.”
Instead of exchanging pleasantries, I simply nodded.
“Please sit down, Alan. What brings you here?”
Alan sat down and let out a deep sigh.
Without any room to spare, he immediately got to the point.
“To be honest, please delay the insurance payments a little longer.”
“Insurance payments? What insurance payments?”
“I already know. President Eva is your representative, Charlie.”
Expressionless, I answered.
“So you've finally approached the truth.”
“May I ask why you're going this far?”
“Why? What other reason does an investor need? Money. That's all. That's why Wall Street exists. And that's why Bear Stearns managed to survive for decades. Isn't that right?”
“But this goes beyond...”
Alan trailed off.
I chuckled and finished the sentence he couldn't say.
“Why? Do you think I'm trying to bankrupt Bear Stearns?”
“......”
“Whether Bear Stearns survives or dies doesn't matter to me. All I want is the money we're owed.”
“Our financial condition has weakened too much to pay those claims.”
“That's not our problem. That's your company's problem.”
“Charlie!”
Alan was the one shouting, yet he was also the one growing increasingly anxious.
Unbothered, I crossed my legs and tilted my head.
“What are you trying to say? Stop struggling so hard and consider getting off the sinking ship while you still can. James' offer is still valid.”
The penthouse fell silent.
