By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
"Truthfully, I said Lawrence was having some financial problems that were affecting his marriage, and I was giving him an opportunity that could help him. And his answer to that, 'So you're helping a friend.'"
In a brief interview with the Observer, Elias said that he thought Halpin was being "nice" when the CompUSA executive explained his reason for selecting McBride for the franchise operation. Asked if the CEO's comment didn't seem to be a betrayal of his friend McBride, Elias shrugged and suggested that no one would hold marital difficulties against a prospective business partner. "If I didn't do business with all the people who are divorced, I wouldn't be doing much business."
Shortly after that September 1999 car ride, however, as far as the Dallas partners were concerned, Elias dropped out of sight. In the months following his September visit, COC could not get Elias to answer multiple letters, faxes and phone messages.
"You also seem like a very courteous man...I'm just a little confused about why you ignored call after call and letter after letter and Federal Express after Federal Express?" Werbner posed to Elias during cross-examination.
"I think I did a bad job on letting them know that we not able to continue the negotiations and things happen and I'm sorry," Elias conceded.
But Elias' contrition only presented opportunity for Werbner.
"Did you ever [apologize] before doing so for the benefit of these 12 people? Did you ever say you were sorry to those people?"
"No," Elias acknowledged.
Not one to worry about overkill, Werbner also asked the father-in-law about the unanswered calls to the COC partners.
"Well, I think that when you are looking for a girlfriend and you talk with her and you have meetings with her and she decides not to go with you and you call and call, you need to understand that she doesn't like you anymore," Slim testified.
"But we are not talking 13-year-old people calling for a date. We are talking about grown businessmen who spent time and money with experienced business people discussing a major business transaction," Werbner scolded as the defense team stayed inexplicably mum.
Frustrated with the truncated communication with Slim's people, Cunningham and McBride went to Halpin in late October 1999 for help. The CompUSA CEO's response to them also relied upon a metaphor about unrequited love.
"You know, if you are trying to get a pretty girl to go to the dance, to go to the prom...if she won't go with you, then ask out a prettier girl. If I were you, I would send those guys a notice and tell them you're not going to continue discussion with them and that you are going to begin talking to other people about bringing CompUSA to Mexico," Halpin told the COC partners, according to Cunningham's testimony.
Halpin said he never told the Dallas partners explicitly to terminate the deal.
Nevertheless, believing they were following Halpin's advice, the COC partners sent what Werbner coined "The Prom Letter." In it, the partners terminated their deal with Slim's company and told Elias they were looking for another investor. No question, the Dallas partners' termination of Slim's obligations could have been perceived as helpful to Halpin if he wanted to ensure that he was not interfering with that contract when he negotiated the CompUSA buyout.
On November 4, 1999, Halpin flew to Mexico to discuss with Slim what Halpin insisted--during one of his most disingenuous moments at trial--was the "valuation" of the company rather than a price negotiation. In plain English, Slim was offering Halpin $7 a share for the company, about $1 more than its trading price, and the CompUSA CEO wanted more.
Halpin was not in the best bargaining position. CompUSA's stock had been battered that year, a reflection of the losses the company had suffered, including $12 million in the previous quarter.
For Halpin, the most personally lucrative scenario would have been a change of control at the company before his contract expired in August 2000. If the company was sold before then, Halpin's contract called for him to receive $21 million.
Mystified by his so-called friend's secretiveness about his trip to Mexico, McBride decided to follow Halpin. At the time, McBride was already under pressure from Beneke. The Dallas real estate investor, speaking regularly about the COC franchising deal with his lawyer Scher, was convinced that something was amiss. "You're getting hosed," Scher says he had warned Beneke.
On the same day as Halpin, McBride caught a flight to Mexico City and registered at The Four Seasons Hotel, where the CompUSA CEO always stayed. Halpin was not happy about the tail. He testified that McBride was following him around like a "puppy dog."
The evening after Halpin met with Slim, McBride found the CompUSA boss at the hotel bar. Halpin told McBride that he was talking to Slim about CompUSA's start-up Internet provider service.
McBride knew when Halpin's flight was scheduled and, troubled overnight by a growing sense that he was being duped, he went to confront Halpin at the Mexico City airport.
Halpin brushed him off.
With Halpin in Mexico and stories in The Dallas Morning News as well as the Mexican press about plans to open CompUSA in Mexico, McBride was the only one among his partners who held out hope that the deal might still work.