By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
Lipscomb Industries had been having problems with NationsBank ever since the paperwork was signed on June 22, 1993, for the $40,000 loan that had enabled Al Lipscomb and Roger Hoffman to go into business in the first place. Lipscomb and Hoffman believed that their loan officer, bank vice president Chris Newtown, lacked the confidence that they would ever pay the money back.
"The attitude of Chris was just terrible dealing with minorities," Hoffman told me the morning Chambers turned up at his office. "And why he was over in the Oak Cliff office I have no idea. I think they've been taught all their lives that these are unsuccessful people, and they're lazy, and they're stupid and don't know how to run a business. Right after we signed the papers, he kept looking at me and saying, 'You make sure you keep good records.' And he told Al that they don't do this. And depending on how well this goes, it will decide if they ever do this again. Can you imagine them ever doing this to Jews? 'You fail this loan, and we won't give any more Jewish people loans?'"
It's possible, though, that Newtown simply looked at Lipscomb and his sidekick and saw reality: two grown men with no steady jobs, no incomes to speak of, no assets to put up as collateral for a loan, and less-than-sparkling credit histories.
It's possible that Newtown had done a little research on his clients. Perhaps he had seen what a miserably run company Merit Laboratories was, or that Hoffman had been sued in 1991 for damaging and then vacating an apartment.
Or perhaps Newtown had run across another case in the courthouse--this one against Al Lipscomb and his wife Lovie for stopping the payments on a brand-new car they had purchased in 1984, shortly after Lipscomb first joined the council.
Yes, Chris Newtown at NationsBank had good reason for his reluctance to approve a $40,000 loan for Hoffman and Lipscomb. But, unfortunately, he didn't have a choice. The loan had been authorized at the top--by NationsBank chairman Bob Lane, who, according to Lipscomb and Hoffman, had received a call on their behalf from former Mayor Annette Strauss' husband Ted, who is senior managing director of corporate finance for Bear Stearns, a prestigious Dallas brokerage firm.
Lipscomb had been close to the Strauss family for years. He had served with Annette Strauss when she was a council member and later when she was a two-term mayor. Over the years, Strauss--when asked--had given Lipscomb money to tide him over when he was short of cash.
"When we went to talk to Ted at Bear Stearns, he basically said to us, 'This is a gold mine, and the collateral is the business community,'" Hoffman told me, recalling their initial meeting with Strauss during which he and Lipscomb laid out their ideas. "He said we'd both be driving a green Mercedes in a year. Strauss called...the head of commercial lending and Bob Lane."
Lane declined to be interviewed for this story. Ted Strauss confirmed that he had met with Lipscomb and Hoffman--and that based on their assertions that they had a number of business leaders committed to buying products, he recommended that they go to a bank. "I may have called [Lane]," says Strauss. "I just don't remember."
Whatever Strauss did, it was a one-time involvement. The bank took over from there. According to Hoffman, NationsBank officials--in an attempt to confirm that the business community was indeed going to buy products--called Herb Kelleher, Pete Schenkel, and Liz Minyard, among others, before they would make the loan.
Now it was September. It had been a mere three months since Hoffman and Lipscomb had been handed their $40,000, and already it was gone--which was a problem since they hadn't landed any business yet.
So Lipscomb and Hoffman went back to Chris Newtown and asked for more money--a $25,000 float just to get them over the hump until they landed these really big accounts that were in the pipeline from the Norman Brinkers and Robert Decherds.
"We went to him, and he just said no," Hoffman told me back then. "He just said no. That they don't do that--that type of financing. And that's the answer that 99.9 percent of small businesses are getting. Not just minority. The problem if you're minority is that you couldn't even get the appointment. So Al has enough reach there that the senior vice president of NationsBank gets involved, and the deal gets done. But who could do that? I couldn't."
When Chambers made his visit to Lipscomb Industries that day, he approved a $15,000 float--a new note that Lipscomb Industries soon defaulted on--along with the original $40,000 note the bank had executed three months earlier.
Two months ago, on March 18, 1996, NationsBank quietly sent a letter to Lipscomb and Hoffman asking for its money back.
"The purpose of this letter is to inform you that your above-referenced account with NationsBank is in default under the terms of the original promissory note," wrote Larry Furr, a NationsBank officerwho specializes in troubled accounts and who is based at the bank's North Carolina headquarters where, you can be sure, nobody gives a damn how valuable Al Lipscomb has been to the Dallas power structure. "Please remit $65,494.56, which is the balance in full and the amount needed to cure the delinquency, within 10 days from the date of this letter."