By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
In a biography assembled by the Islanders earlier this year, Spano claimed he owned 10 companies with more than 6,000 employees worldwide. But according to documents filed in the Hughes & Luce case, Dun & Bradstreet, the financial information firm, states that Bison--which Spano considers his principal business--had only 22 employees and assets of $3 million in 1995.
During the early '90s, Spano dabbled in other investments as well. In his deposition, he claimed to be co-owner of Lifesaver Beverages, a fruit-flavored drink company spun off from the candy maker and based in Scottsdale, Arizona. He said he shares partnership in Sebring Capital Corporation, a mortgage company. Spano testified that his partners in Sebring are Jim Leslie, Kay Jones, and Brant Bryant--all executives with the Staubach Company, the former quarterback's 20-year-old commercial real estate brokerage firm. Those supposed relationships would prove to be important as Spano paved his way to the botched Islanders purchase.
Also key in Spano's climb was his 50 percent partnership with a South African firm called Lenco Holdings Ltd. The company manufactures aluminum cookware and cutlery and is publicly traded on the Johannesburg stock exchange. From 1992 to 1994, the company produced Pointerware, one of its cookware lines, in New Orleans, with an eye toward expanding operations in the United States.
According to court documents, Lenco executive Gerald Goot began researching the American market and was introduced to Spano.
"Spano advised plaintiffs that he had a significant net worth, allegedly in the range of $150 million, and that he had numerous business contacts in the United States," states a pleading in a lawsuit filed by Lenco and several of its subsidiaries against Spano on June 27 in the 193rd state district court in Dallas County. By late 1994, Spano had connected with Goot, expressing a desire to form a joint venture with Lenco and build the business in the states.
Pointerware Joint Venture, with Spano, Goot, a partner named J. Watt, and Lenco as investors, was initially begun with $250,000. Each investor contributed $62,500 to the start-up, according to court records. After the joint venture was formed, Spano offered to take over all management, administration, and finances of Pointerware. The South African partners agreed, and a manager at the New Orleans office was let go.
Spano had sole power over the day-to-day American operations for Pointerware. Lenco agreed to pay him $15,000 a month to cover his costs.
Over the next two years, John and Shelby Spano made several trips to South Africa, where his former partners say "a personal relationship of trust and confidence was formed." On December 2, 1994, Spano faxed a letter to Lenco chief executive officer Douglas de Jager fairly dripping with the "can do" enthusiasm of a gutsy young entrepreneur.
"In regards to our partnership, I want to make it clear that if this venture does not produce the returns we all anticipate, John Spano will personally reimburse Lenco for all costs incurred with the USA venture," Spano wrote. "I appreciate your confidence in our 'newco,' but I do not expect you or Lenco to take all the risk for only a share of the reward. While I hope we never have to deal with this situation, it is important to me that the risk always remain equal. That is the only way I do business with anyone."
But according to Lenco's lawsuit against Spano alleging, among other things, fraud, breach of contract, and theft, the risk remained anything but equal. A February 27, 1996, letter faxed to de Jager shows a growing strain in Spano's relationship with the South Africans. The letter details John and Shelby Spano's efforts to establish a business relationship with Nordstrom, the high-end retail apparel and gift chain based in Seattle.
Spano pointedly informs de Jager, who was working on his own to forge a relationship with Nordstrom, to cease any personal contact with the chain's president, James Nordstrom.
"Regarding your request to deal direct, Shelby has spent the last six month's [sic] building her confidence, and that of Jim Nordstrom...If the buyer's [sic] and Jim are comfortable with a direct relationship after their visit, we can discuss that issue. Until your people have met them in person, I do not want any direct contact. Jim and I had this agreement going into the relationship. Any questions you want answered please fax to me and Shelby will respond."
Spano ends the letter by stating, "I have enough money for the next 10 generations of Spano's [sic]. I will no longer make my life miserable over any business dealings."
Spano's defensive posture would prove instructive. Months later, he presented his partners with an October 22 purchase order for cookware from Nordstrom totaling $1.9 million. He counted the order as profit in Pointerware's books. There was just one hitch: The company produced the pots and pans, but the check from Nordstrom never came.
Ted Anderson, a Dallas attorney who is representing plaintiff Lenco and its subsidiaries, says his clients confronted Spano in March 1997 with questions about the validity of the Nordstrom order. According to court documents, Spano assured his partners that the order was genuine, and that the payment would be wired within the hour. It never happened. On April 18, Gerald Goot and Lenco received a check for $1,634,000 drawn on Bison Leasing's Comerica Bank account. Ten days later, the check bounced.