With Friends Like These...

CompUSA and Latin America's richest man get a $450 million lesson from a Dallas jury: Friendship and business don't mix.

No question, Slim's and Halpin's lawyers had a paper record--or rather the lack of one--in their favor. McBride and his partners could not produce any signed contract that showed they owned exclusive franchising rights. Any agreements that CompUSA had made with McBride's team had, on paper at least, expired by the time Slim bought CompUSA. Even one of McBride and his partners' own transaction lawyers testified in a videotaped deposition played at trial that the document the plaintiffs had submitted as proof of their proposed deal was never completed.

But arguments about documents and contracts pale when they must compete against the emotional tug of a deceived friend. The defense lawyers have asked District Judge Carlos Lopez to dismiss the verdict, and if they fail on that front, they say they'll ask to have the case retried. But, for jurors, the contrast between Halpin and McBride made the pickings easy. The contrast between Halpin and McBride was great. The former CompUSA CEO propped his foot up on a chair while testifying, as if in his living room in front of a television set, and referred to his former friend McBride as a "puppy dog."

McBride grew emotional and choked up on the stand.

Dallas partners Lawrence McBride, left, and Roger Cunningham were the faces plaintiffs lawyers wanted the jury to see in their case against CompUSA.
Mark Graham
Dallas partners Lawrence McBride, left, and Roger Cunningham were the faces plaintiffs lawyers wanted the jury to see in their case against CompUSA.
On the stand, Slim said he favored hard work over Harvard.
AP/Wide World
On the stand, Slim said he favored hard work over Harvard.

The irony is that a Dallas jury stuck the Mexican owner of CompUSA with a whopping verdict because of the arrogance of an American CEO who claims he never really believed a Mexican market existed for his stores in the first place.

"In spite of all the time it took, it really was a pretty simple case," concedes Harrison. "But something got under the jury's skin."

When Scot Scher, the lawyer who filed McBride and his partners' lawsuit, speaks of Halpin, he quickly turns to what he calls "the personal incident in the elevator." During one of the days of the trial Scher found himself returning from a break riding in the same courthouse elevator as Halpin and some of his lawyers. Scher recalls that as he entered the elevator, Halpin turned to his counsel and said in a clear voice, "Something smells in here." Offended but undeterred, Scher greeted the former CompUSA CEO by name. "How are you, Halpin?" he asked.

When Halpin didn't reply, Scher says he joked to the defense lawyers, "I'm going to have to object to your client as non-responsive."

"Fuck you," Halpin blurted out, stunning everyone into silence.

The son of a Chicago fireman, Halpin started work sweeping floors 40 years ago at the age of 12. Though he did not graduate from college, he rose from being a worker on the truck dock to a top management position at Zayre Corp., a Chicago-based discount retailer, earning $300,000 annually at the age of 36. He subsequently took chief executive officer positions at BJ's Wholesale Club, which operated on the East Coast, and then HomeBase, a chain of 85 home supply stores based in California. At age 41, having accumulated roughly $15 million in net worth from executive stock options, Halpin retired. He returned to the executive suites in 1993, when CompUSA, then a 45-store chain on the verge of bankruptcy, recruited him to become its president and chief executive officer.

With the boom PC market of the '90s, Halpin expanded CompUSA to a 225-store chain. In 1996, a local business magazine identified him as one of the two highest-paid corporate executives in Dallas, earning $21 million annually in compensation and stock options. In 1998, Business Week honored him as one of the 25 top managers worldwide.

In the retail industry, Halpin was the go-to guy when layoffs were coming. He cut 1,900 jobs in 1999, his last year at CompUSA. "Halpin is a tough guy. But he also has a big heart," says Theodore Daniel, a lawyer representing CompUSA.

Certainly, Halpin's bark is loud. McBride's partner Roger Cunningham, a commercial insurance broker, compared talking to Halpin to spending time with bored hunters in a duck blind: The language is always coarse. Halpin himself described the culture at CompUSA under his reign as "a cross between a college fraternity and a boot camp."

On the stand, Halpin seemed unaware of any gaps between his and the jurors' incomes. When Werbner asked about his lucrative parachute, Halpin complained, "I don't get $21 million. Just like everybody else in the world, you see $21 million, then you see what Uncle Sam gets, and then you see what you get afterwards, and it's nowhere near $21 million."

Halpin first met McBride in the early '90s. A newcomer to Texas who commuted to Dallas from his farm in Boston, Halpin joined the local chapter of the Young Presidents Organization, an exclusive group that offers membership to company presidents between the ages of 40 and 50. For rising young executives, YPO offers a chance "to get together and get advice from folks," Halpin testified. The organization has hundreds of members who are divided into smaller groups, called forums, of 10 or so executives.

Halpin joined the same YPO forum that McBride had been invited to enter less than a year earlier. An Abilene native and graduate of the University of Texas at Austin, the 49-year-old McBride owned an irrigation systems sales company. He didn't have the stature of Fortune 500 executives such as Halpin or Dallas Stars and Texas Rangers President Jim Lites, a member of the same YPO forum. But McBride, whose market included Mexico, had served as chairman of the North American Free Trade Task Force, a presidential appointment and prestigious post.

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