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Don't cry for me, Amarillo

In the annals of business history, what took place in the high-ceilinged ballroom of the posh Omni Mandalay Hotel in Las Colinas late last July surely qualified as a moment: T. Boone Pickens Jr. very nearly cried in public.

The occasion was the annual meeting of Mesa Inc., the oil company Pickens founded 40 years ago. Beneath the ornate chandeliers, with his grandchild and nearly 100 stockholders seated in folding chairs before him, Pickens spoke for the last time as chairman and CEO of Mesa.

In his glory days, the Texas oilman-turned-corporate raider graced the covers of national magazines, scripted his life story into a bestseller, and was lionized in the press as an expert on every imaginable subject, including shareholders' rights and fitness routines. Equally revered and reviled, Pickens ranked atop the pack of fabled 1980s corporate raiders, a group that included the likes of Carl Icahn, Frank Lorenzo, and Harold Simmons.

The raiders and dealmakers captured the public's attention--personifying the greed decade and spawning a whole genre of books and movies. They forever changed the staid corporate world by showing that the threat of a proxy battle was potent enough for a gutsy shareholder to wrest millions from multinational companies and dictate terms to corporate management.

Based in the unlikely locale of Amarillo, Pickens would hop aboard his Learjet, reporters in tow, and crisscross the country--making deals, threatening takeovers, raking in his millions, and setting the nation's business leaders on edge.

But that was a decade ago, and the Learjet Cowboy has been plunging back to earth ever since.

This summer, Pickens belly-landed. For 18 months he had been forced to fight off a hostile takeover of his own company. Ironically, that assault was led by a man who studied the takeover game at Pickens' side--former protege David Batchelder. Pickens had once considered Batchelder a friend. That belief proved to be wrong.

With a hostile takeover looming and Mesa on the brink of bankruptcy, Pickens ultimately agreed to turn over control of his company to Fort Worth investor Richard Rainwater.

About the same time, Pickens' second wife, Beatrice, a woman after whom he had named an oil field and a ranch, filed for divorce. The matter threatened to turn ugly fast. In her pleadings, Pickens' wife cited discord and conflict of personalities for the split, and asked a state judge to bar her husband from "communicating or writing in vulgar, profane, obscene, or indecent language, or in a coarse or offensive manner."

At the Omni podium--dressed in a subdued gray suit, white shirt, and yellow tie--the lean, 68-year-old Pickens appeared exponentially older than he had before his company started its overleveraged slide into near-bankruptcy and his marital strife erupted in court. He no longer exuded the cocky confidence of the man who opened his 1987 autobiography with the assertion: "This is the story of a man who turned a $2,500 investment into America's largest independent oil company...and along the way discovered that something is terribly wrong with corporate America. Mesa Petroleum is the company, and I'm the man."

Now Pickens offered a more melancholy, self-deprecating view of history. "We used to be at the top of this group," Pickens said, gesturing toward an overhead projection that charted assets of Mesa and the nation's other independent oil companies. "I know some of you are old enough to remember that, but if you aren't," he advised, "take my word for it." A few laughed.

Pickens then feebly attempted to put a positive spin on his impending departure from Mesa. Don't worry, Pickens assured his listeners, as if his concerns were their own. After leaving Mesa he planned to start an investment trading company. "I'm very close to leasing office space in Dallas," Pickens said. "I'm excited about the opportunities that exist...If you are going to start a new business, it's better to start at 68 rather than 70."

After his prepared speech, the Mesa CEO entertained questions and comments from the crowd. One audience member seized the opportunity to praise Pickens profusely. "I don't think we will find anybody that will be as beneficial to the company," the man in the third row said, drawing a round of applause.

Pickens, usually one for an arched eyebrow and direct stare, blinked hard, waited a moment, and then quietly responded, his voice cracking and tears welling in his eyes, "Thank you."

In the mid-1950s, T. Boone Pickens Jr. was a gangly geologist toiling for Phillips Petroleum in Bartlesville, Oklahoma, where his father had also grudgingly worked. The junior Pickens could lay claim only to what, at the time, seemed like a pipe dream: creating a successful independent oil company.

But in 1954, after only three years, Pickens quit Phillips. He began driving a brand-new Ford station wagon across West Texas, scratching out his living as a wildcatter in the oil business. Of those times, Pickens wrote in his autobiography: "I...soon became an authority on roadside restrooms in the Panhandle." In his first year as an entrepreneur, Pickens earned slightly less than $12,000, according to his later autobiography. (Despite repeated requests, Pickens declined to grant the Dallas Observer an interview for this story.)

But in 1968, when Pickens was 40, he found a way to transform Mesa into a major industry player. It was not a giant oil strike that vaulted Pickens into the big leagues. Rather, it was his first hostile takeover.

Mesa had become a publicly traded company, and Pickens used it to pursue Hugoton Production, a Garden City, Kansas, company that controlled the largest on-shore deposit of natural gas outside of Alaska.

Few in the industry thought a small operation like Mesa could win control of a giant like Hugoton. But Pickens succeeded in outmaneuvering the company's directors. During the Hugoton transaction, Pickens began developing what would later become his signature takeover approach.

He griped about the stodgy, bureaucratic corporate directors running the company. Hugoton's directors were, he wrote in his book, "men who knew very little about the oil business." One director in particular, Pickens wrote with little charity, was "overweight, red-faced, and very arrogant."

Pickens acquired some 17 percent of the company's stock, then turned a key board member into an ally and won control of the company. Since then, the Hugoton field has generated more than $1 billion in revenues for Mesa and made it one of the largest natural-gas producers in the United States. "The Hugoton acquisition is the most important deal we ever made," Pickens wrote in his 1988 book. He could not know that Hugoton would also one day push Mesa to near-bankruptcy and cost Pickens control of his company.

In the mid-1980s, Pickens plunged into the takeover business with a passion, and his targets made Hugoton look like tiddlywinks.

Between 1982 and 1987, Pickens made takeover bids for Cities Services, Gulf Oil, Phillips Petroleum, and UNOCAL. Each of the companies ultimately eluded Pickens' grasp by selling out to somebody else. Gulf, for instance, merged with Chevron in a $13.2-billion deal.

Pickens also made runs on companies outside the oil industry. His list of unsuccessful targets included aerospace kingpin Boeing; and Newmont Mining, a gold-mining company. The October 1987 stock market crash sent him out of the country to bid for a Japanese auto-parts company. Overseas--as at home--Pickens made a lot of noise, but never acquired control of any assets of the companies he targeted.

But he did make a lot of money.
Pickens, Mesa and its executives earned handsome returns for their efforts. Stock they purchased as part of the takeover attempts would invariably rise in value when the targets were acquired by a white knight. Even if they never acquired a company, the raiders could reap the bounty of the pumped-up stock prices. In the Gulf deal alone, for instance, Mesa earned a pretax profit of $518 million.

The high-stakes dealing also won Pickens something else--an international reputation as a savvy and relentless businessman.

An Oklahoma native with a Western twang and a country-boy appreciation of the graphic metaphor, Pickens became a poster boy for the 1980s crew of corporate raiders, appearing on the covers of Fortune and Time.

Pickens wallowed in the attention, seizing the opportunity to sound off about shareholders' rights and the excesses of larger companies' CEOs. He landed a $1.3-million advance for his autobiography. He even explored politics--paying pollsters to conduct surveys to determine his name recognition, and dancing close to a bid for the Texas governor's mansion.

As his star rose, Pickens was able to assemble around him a cast of bright, eager, and ambitious young men. They moved to Amarillo, of all places, to be at the epicenter of one of the hottest takeover games in the country. They stood to make millions and learn from the legendary Pickens himself.

The magazine Financial World dubbed the group "Boone's Boys."

A photograph included in Pickens' 1986 autobiography shows a pack of serious-looking young men, all wearing white shirts and ties, hunched over a table cluttered with documents. They are Boone's Boys, the team of talented opportunists who worked feverishly for Pickens in the mid-1980s, helping plot and execute his headline-grabbing takeover bids. The photo includes Andrew Craig and Sidney Tassin, who have since left Mesa.

Largely indistinguishable from the pack is David Batchelder. But during those heady times, Batchelder was never very far from Pickens--literally, figuratively, or in the financial press.

On the surface, Batchelder was just another of Boone's Boys, and that appellation fit the chummy, schoolyard character of the relationship between Pickens and the young men attracted to Mesa by his forceful personality and high profile. Pickens took "the boys" hunting and played racquetball against them. He invited the bachelors to holiday dinners at his house. At work, Pickens wanted his boys within shouting distance.

Batchelder recalls spending hours at a time just sitting in Pickens' office, serving as a sounding board and listening to his boss' conversations with other captains of industry. "You wouldn't have believed some of the people I met," Batchelder says in a recent interview, still conveying the awe he felt at meeting the likes of Armand Hammer. "[Pickens] didn't care how old and how inexperienced you were," Batchelder recalls. "If he could have you in that meeting, he would have you in that meeting."

Pickens prized his youthful executives, precisely because of their youth. "They had ideas, initiative, and a lot of energy," he wrote in his book. "In most corporations, people like Batchelder and Tassin are considered too young; they are seen as a threat to their superiors. Over the years, however, organizations lose their aggressiveness when they can't hold their best young people."

At the time, Pickens communicated his appreciation for Batchelder and the others. "One of the beauties of Boone in those early days was that he was a good listener," Batchelder says.

Among the boys, Batchelder, who, like his boss, graduated from Oklahoma State University, stood out. "He was the first among equals," recalls Joseph Nocera, a senior editor at Fortune whom Pickens once hired to write his biography, and then fired. "He would be the one guy who would be in the room when Pickens met with someone important."

Batchelder possessed skills that made him a natural for dealing with the outside world when his boss didn't have the time or inclination. Batchelder had been working as a public accountant in Denver for Deloitte, Haskins & Sells before he started with Mesa in 1978 as $33,000-a-year assistant controller. He does not possess the stereotypical bean-counter personality, but is instead articulate, relaxed, and convivial.

"David is good-guyish," says Robert Lovejoy, a former partner at the New York law firm Davis, Polk & Wardwell and now an investment banker at Lazard Freres who used to work with the Mesa takeover team in the 1980s. "He is very smart and he has great presentation skills."

A people pleaser, Batchelder became the contact man for Mesa with the banks. He was responsible for putting together the multimillion-dollar financial packages needed to make the tender offers of those days.

Batchelder also became Mesa's frontman with the financial press--which was of no small importance to Pickens when he was playing out a takeover battle. "He could talk when it seemed like Pickens should stay above the fray," recalls one former Mesa employee, who worked with both men.

"David became the credible, articulate spokesman," recalls Warren Vieth, a former Dallas Times Herald business writer, now an editor at The Los Angeles Times, who worked for Mesa as a public-relations specialist in the 1980s.

Although Batchelder was clearly a favorite among the boys, his Mesa colleagues did not regard him as a yes man for Pickens. "David was not a kiss-ass kind of guy," recalls a former Mesa employee.

Pickens has told reporters that he considered Batchelder a buddy; at least, until Batchelder tried to take Mesa away from Pickens. "He was my friend," Pickens told Texas Monthly for a story published in October 1995. "But I wasn't his friend. I thought I was, but apparently I wasn't."

During a recent interview at his La Jolla, California, office, Batchelder looked more relaxed than in the earlier photograph of him that appears in Pickens' book. Dressed entirely in off-white, casual attire, the 47-year-old prematurely gray Batchelder remains an accomplished practitioner in the art of obliging (and spinning) reporters.

Barred from talking negatively about Pickens by a legal agreement, Batchelder nevertheless granted a two-hour interview that went through lunch--a shared turkey sandwich. "No question is stupid," Batchelder says kindly when asked about a standard Securities and Exchange Commission filing.

Batchelder insists that, even though he and Pickens spent an inordinate amount of time together, the close working relationship between them never transformed into a friendship. "It was always an employer-employee relationship," Batchelder says, noting that since his departure they had little contact. "I wasn't in his social circles."

Batchelder doesn't deny that Mesa (and Pickens) made him a rich man. Both Pickens and Batchelder benefited from the unusual plan at Mesa that awarded "deal fees" to a team of executives--Pickens, Batchelder, Craig, and Tassin--as if it were an internal group of investment bankers. After the Gulf Oil deal, the company began paying that group as handsomely as any outside investment banking firm would have been paid: 4 percent of each transaction's value. In the mid-'80s, Batchelder made more than $5 million personally from deal fees, while Pickens personally pulled in a whopping $110 million from the same source.

"David came here with a net worth of $35,000 and left with $10 million," says one of the Mesa executives who would later help Pickens fight off the former protege.

On the surface, Batchelder's departure from Mesa in 1988 evidenced no bitterness. With his youngest child finishing high school, Batchelder wanted to keep a pledge he had made to his wife by leaving Amarillo--a claustrophobic, West Texas town that he has compared to a truckstop. He and his wife preferred sunny La Jolla, Batchelder told Pickens.

Batchelder planned to set up a boutique investment banking firm. At first, Pickens and Batchelder discussed working out some sort of long-distance arrangement that would allow Batchelder to continue working for Mesa from the West Coast. But that never happened, Batchelder says, because Pickens needs to see people's faces daily to work well with them.

But the parting appeared amicable, and Batchelder gave Pickens plenty of advance notice before he left Mesa. "I told Boone one year before I was leaving that I was leaving," he says. "You have to have a pretty damn good relationship to do that."

When it finally came time for Batchelder to pull out of Amarillo, however, Pickens was suffering a wave of bad news and publicity. Mesa's earnings had dropped 55 percent from the year before (never to rise again, until this past quarter when Rainwater had already taken over).

In Amarillo, Pickens had gotten into a row with the local newspaper, The Amarillo Globe-News, after it reported about embarrassing cost overruns in one of Pickens' pet philanthropic projects, a $1.5-million mansion for the president of West Texas State University, where the Mesa founder was chairman of the board of regents.

Pickens reacted poorly to criticism, urging Amarillo businessmen to stop advertising in the local paper. When the newspaper's editor, Jerry Huff, left amid the fuss, Pickens hung a celebratory banner across the top of the Mesa headquarters building. It said: "Good-bye Jerry."

But when national reporters caught wind of Pickens' hometown fracas, they had a field day. On April 5, 1988--two weeks before Batchelder's effective departure date--The Wall Street Journal published a caustic front-page story about Pickens entitled: "Cranky Cowboy."

"The Texas oilman is obsessed with enemies. He is as thin-skinned as the chief executives he is always attacking," the Journal writers asserted in the second paragraph.

During the next few years, matters would go from bad to worse for Pickens and Mesa. The company's earnings and stock price tumbled--from a high of $65 in 1988 to a low last year of $5. The company's losses from 1989 to 1994 ranged from $60 million to $200 million a year.

In 1986, Mesa had borrowed $715 million to buy Tenneco reserves. Pickens, who bragged in his autobiography that he had never been scared of debt, opted to wait on paying off the banks and instead to distribute shareholder dividends even though gas prices were dropping.

Warm winters and low gas prices translated into losses. Pickens borrowed money in the late '80s and early '90s to pay out more than $1 billion in shareholder dividends, a decision that appears disastrous in hindsight. Meanwhile he sank all of Mesa's assets into natural gas only to have the commodity's price plummet.

By 1991, Pickens moved Mesa's corporate headquarters away from the maelstrom of Amarillo to Dallas. He described the year to shareholders in his annual report as "another year of new lows for Mesa."

By 1992, with debt payments strangling the company, Pickens finally bought some time from the banks. He delayed interest payments on the debt until 1996 and agreed to meet a balloon payment of $620 million in 1998.

That gave him an opportunity to go back to the equity markets, which he did in 1994. But Pickens had trouble raising capital, and ultimately had to turn to his friends for money and buy more Mesa stock himself, raising his stake in the company to about 7 percent.

Pickens had to go through the dog-and-pony-show routine, pitching Mesa stock to potential investors in meetings. One professional involved in the stock offering recalls that it became apparent Pickens had lost some of his appeal with the young people who typically manage institutional investments.

"It was kind of sad," the professional says. "It was the old Boone against a new audience, a bunch of 33-year-olds. They didn't know what he had done."

While Pickens was trolling for cash, though, the West Coast was proving more hospitable for his former protege.

At his new investment banking firm in La Jolla, David Batchelder was faring quite well. Two billionaires--the flamboyant Marvin Davis in Los Angeles and the dissimilarly reclusive Dennis Washington in Missoula, Montana--had hired him to give investment advice. Batchelder made them big money--$150 million for Davis--going after the parent company of Northwest and United Airlines. Washington, working with Batchelder, bought shares and ousted the management of the off-price retailer Pic N'Save.

As a freelance investment and takeover adviser, Batchelder wasn't getting any assistance from Pickens. The two rarely talked, Batchelder says. And if investors called Pickens for a reference on the former star of Boone's Boys, Pickens would "damn him with faint praise," says another former Mesa employee.

"At the end of the conversation, just in case they didn't get it, Pickens would say, 'Go ahead, ask me if I'd hire him again.'"

Asked, Pickens would respond, "No," says the former Mesa employee, who overheard Pickens reiterate the conversations.

Batchelder, in fact, had encountered something that others who left Mesa had seen; after departing Pickens' employ, they became the target of his bitterness. "It is very tragic. There is a part of Boone that won't allow someone to leave," says the same former employee. "There is something about him that wants to take it back."

Pickens has never been timid when it comes to criticizing or chastising. Verbal attacks on other businessmen, in fact, are part and parcel of the Pickens method for taking a run at somebody else's company.

For the better part of the past decade he has roundly and regularly criticized other corporate chieftains at Cities Services, UNOCAL, Gulf Oil, and Phillips Petroleum while making plays to seize control of their companies. He once told reporters, "Tom Thumb, Pluto, and Mickey could have done a better job of running Texaco Inc. than its board has." In his book, Pickens wrote: "I decided I could outthink, outwork, and outfox the big boys, and that would beat all the money in the world."

Nothing personal, Pickens always asserted after lambasting a CEO, it's just business.

But when Pickens found himself in a battle to retain control of his own company, he seemed to forget much of what he once preached. The fight for Mesa Inc. was nothing if not personal--a battle between Pickens and his onetime protege.

In 1994, Pickens' prospects weren't bright by any measure. He had bet heavily on natural gas and bet wrong. He had some $1.2 billion in loans about to come due at the banks. Gas prices were still in the basement. He became--the irony starts here--a takeover target himself.

And the man orchestrating the hostile takeover threats was Batchelder.
When Pickens had increased his personal stake in Mesa to 7 percent in 1994, Batchelder sniffed opportunity. Every year since he had left Mesa, Batchelder says, he systematically reviewed Mesa as a potential investment.

"Batchelder saw [Pickens buying more Mesa stock] and he thought, 'Either Boone is going to fix it or sell it. Boone must believe it's worth it, so I will follow right behind him,'" says an investment professional who has done business with Batchelder.

Although Batchelder, as an outsider, wasn't privy to the details, his intuitions were right. Pickens was beginning to think about selling something to pay off his debts. But not the whole company.

In November 1994, Pickens had received an offer for the Hugoton Properties. His plan was to sell off Hugoton--the crown jewel of the Mesa assets, representing about one-third of the company's holdings--use the cash to pay off the debts, and preserve the rest of Mesa.

Contour Production of Houston, a private oil and gas company headed by former Shell Oil president John Bookout, had offered $900 million for Hugoton Properties. But in a move that seems utterly mistaken in hindsight, Pickens rejected the offer as too low.

In December 1994, Batchelder told Pickens that a Batchelder client--Dennis Washington--was about to acquire more than a $15-million stake in Mesa. At that same meeting--the first face-to-face encounter between the two men in seven years--Batchelder told Pickens he should sell the company. Pickens reacted with alarm.

"Hell, David, that isn't even being considered," Pickens said, according to an account of the conversation from court documents published in Texas Monthly.

With the increased pressure from Batchelder's investors, Pickens began systematically shopping for buyers for the Hugoton property, and in January 1995 announced that Mesa would auction off the huge gas reserve.

Initially Pickens expressed confidence about his prospects. He didn't bother, for instance, to hire investment bankers to market the property. "He didn't think he needed them, and he wanted to control the deal," says a Mesa shareholder who follows the company closely and talked to Pickens at the time. He remembers Pickens was heard bragging immediately after the auction was announced, "Hell, I got 40 calls on my desk."

But the buoyant mood was short-lived. The auction kept dragging on as Pickens scrambled to find someone who would offer $1 billion for the property.

In the meantime, Batchelder's group gained ground.
The group connected with a powerful ally, Marvin Davis, a dealmaker with a reputation for fierce fighting. With the auction going poorly and Batchelder threatening to go to shareholders for a vote, Pickens agreed reluctantly in March 1995 to give the outsider group two seats on the Mesa board--one to Batchelder and one to an executive working for Washington's company.

Then came worse news for the Mesa founder. On June 9, 1995, Pickens had to announce that the auction had been a failure. The highest bidder, Mobil Oil Company, had offered only $750 million, not enough to pay off a significant amount of the debt and save the rest of Mesa.

By July 1995, Pickens began constructing his corporate defenses. Ironically, he employed the very tactics--like poison pills and golden parachutes--that had once earned his scorn when other CEOs were running from him.

Pickens directed Mesa to file suit against Batchelder and his investors--always a good stalling tactic in a takeover battle. In the suit, which cost the company at least $1 million in litigation fees, Mesa alleged that Batchelder's investors had disregarded SEC rules and failed to disclose their joint holdings. Batchelder's investors, the Mesa suit contended, had been secretly working together without disclosing their cooperation.

Three days after filing that suit, Mesa's board adopted a poison pill. It called for any party's acquisition of more than 10 percent of Mesa's stock to trigger a provision allowing other shareholders to buy stock at half price, diluting the value of all the shares. The board also approved golden parachutes for Mesa executives. Initially, even Pickens was scheduled to get a double-salary deal if there were a change in control. But when Batchelder and other board members squawked about that, Pickens quickly took his name off the list.

Batchelder's group returned the fire by filing a countersuit to invalidate the poison pill.

In September 1995, the two sides settled the litigation--a move that bought Pickens some time. The pact called for Mesa's board to do something--find a buyer, find cash, or whatever--to resolve the debt issue. In return, Batchelder's group pledged not to conduct a proxy fight. Batchelder also agreed to resign from the Mesa board and send his partner, Joel Reed, to the meetings instead. Banishing Batchelder was a Pyrrhic victory for Pickens, and both sides pledged to refrain from making disparaging comments to the press.

"[Pickens] just didn't want to see Batchelder's face," says one former Mesa employee.

For Batchelder's investors, the settlement set a date by which Pickens had to make a deal to improve Mesa's outlook or face the renewed threat of a Batchelder-led takeover.

On February 27, 1996--two days before that deadline--Pickens found a way out. Pickens presented his board with a plan offering Richard Rainwater effective control of the company, giving Rainwater 33 percent of new Mesa stock for $2.26 a share, about a 25-percent discount on the market price. In exchange, Rainwater made a $265-million cash infusion--which subsequently helped Mesa line up lower-cost financing for its debt.

Pickens, as he has grudgingly conceded, had run out of time. He did not want his company's fate determined by Batchelder. And Rainwater was there waiting.

Ken Hersh, Rainwater's right-hand man, says his boss and Pickens "had ongoing discussions" during the years that Mesa was sliding toward insolvency.

A former Mesa employee who heard Boone describe those encounters remembers the talks as extremely one-sided.

"Boone had always seemed to like Rainwater because of the energy around him," the former employee says. "But he also had reservations about him. He would complain after visiting with him, 'God, you don't get any talk time with that guy.'"

The employee remembers that Pickens never wanted it to look as if Mesa were desperate, but the terms Rainwater offered to help Pickens out were always those acceptable only to a desperate man. The former Mesa employee remembers Pickens would return from a trip and say, "Those guys are crazy. Why did we waste two hours going out to Fort Worth?"

But ultimately Pickens was desperate enough, and Rainwater was his only salvation.

The Mesa board was convened for a meeting, and Pickens sat patiently for six hours as Hersh told the Mesa board what his boss was prepared to offer for the company. (Rainwater did not even bother to attend the meeting, instead sending Hersh, and keeping in touch by speakerphone.)

The whole scene must have gotten under the skin of a competitive guy like Pickens.

"Here was Boone," recalls a participant at the meeting, not in the Pickens camp. "A guy who fancied himself as near the top of the industry, and here was a young guy [Hersh]. There were just points where [Hersh] didn't treat [Pickens] with the deference that you would have expected." It seemed, the participant recalls, as if Pickens "was biting his tongue."

Pickens was in a hurry to get the deal done, and asked his board to approve it that day. Batchelder's allies balked at the rush, and the board decided to wait overnight.

But in a telephone conference call the next morning, the board approved the deal over the objections of the two members from Batchelder's group.

Joel Reed, one of the directors representing Batchelder's group, recalls conducting a 30-minute monologue about why the deal was overly rich for Rainwater and shorted the shareholders. He argued then--and later in a letter of dissent--that Rainwater was getting a 70-percent discount on the market price of the stock, and that the board had failed to search adequately for a better alternative. But Reed recalls that Pickens cut him off.

"All right," Reed remembers Pickens said, "I think we have heard enough. Let's vote."

In April, the Rainwater proposal was unveiled to the public for the first time. At the press conference held for the occasion, Rainwater and Pickens presented a picture of warmth and cheer. The 51-year-old Rainwater, dressed casually and sporting a deep tan, recounted how the two had struck the deal on the golf course. He joked that Pickens was still the better golfer.

Superficially deferential at that moment, Rainwater would show in short order that he was undoubtedly Pickens' new boss by committing the ultimate act of an employer: firing Pickens.

On June 13, Pickens announced that he was retiring from Mesa. The company's stock price gained 12 cents that day. Nearly a week earlier, Pickens had met with Rainwater for an hourlong meeting in a New York City suburban airport. The two had decided, Pickens told the press, that it was best for Pickens to leave.

But well before the formal announcement, it was clear, to anyone who cared, that Pickens was on his way out. In an SEC document filed in May 1996, the Rainwater group had written about an "orderly transition" of the management at Mesa.

(Less than a month after the annual meeting at the Omni, Mesa announced that Rainwater had indeed found Pickens' successor. Jon Brumley, an oil-industry veteran who had defended Southland Royalty against a Pickens-led raid, would take the helm at Mesa.)

Nowadays Rainwater's group must walk a fine line, careful not to gloat too much or trample over Pickens and Mesa shareholders. The Rainwater team is sensitive, for instance, to charges that it stole Mesa. "Bankruptcy is worse," Hersh asserts. "Our deal made the stock durable."

About Pickens, Hersh uses kid gloves. "We made him part of the process," he says. "He was CEO of the company."

But the new management team at Mesa already has unraveled much of what Pickens had sewn. The Rainwater team immediately laid off 10 percent of the Mesa work force. Pickens' top executives have left. "I didn't come here to work for a $200-million-a-year oil company," explains Andrew Littlefair, the departing vice president of public affairs. "I came here to work for Boone Pickens." Rainwater has halted Mesa's investment in one of Pickens' pet projects--research into natural-gas-powered vehicles. And he has sold Pickens' corporate jet.

As for Pickens, he has on his own disassembled much of his high-profile life.

He has resigned from the boards of other major companies and reduced his public speaking engagements. His name isn't getting bandied about this time as a potential gubernatorial prospect. And in Dallas district court, his marriage to a woman whom he described in his book as his "best deal" is disintegrating.

Beatrice Pickens, 65, is seeking $28,035 in total monthly expenses from her famous husband. The couple's Neiman Marcus account, now part of the court record, helps explain some of that. She paid $1,266 for an Ungaro dress, and her balance at Neiman's one month totaled $14,729.

It would be easy to draw a picture of Pickens as a man besieged--first betrayed by his former protege, now being sued by his wife.

But however his divorce plays out, Pickens refuses to accept any suggestion that he was beaten by Batchelder.

"Batchelder...bagged his old boss," Forbes magazine reporter Seth Lubove wrote in the July 15, 1996, issue shortly after Pickens' resignation from Mesa was disclosed.

Batchelder succeeded in dragging his former mentor into an ego-driven and emotional fight--with diminishing financial returns for both sides. (Batchelder concedes he may have made a mere $20,000 profit for his client Dennis Washington on the Mesa battle.) Viewed through the prism of his final bout with Batchelder, Pickens' principled past stances on shareholders' rights suddenly appear dim, at best. Burning bright is a sad picture: one of Dallas' most renowned businessmen bungling critical business decisions and littering his life with embittered endings.

In the old days Pickens and Batchelder used to squeeze a game of racquetball in at least once a week. Typically, Pickens and Batchelder held the first and second slots in the racquetball rankings that Mesa kept as a matter of corporate policy. Usually, Batchelder concedes, Pickens beat him and held the top slot. But Batchelder's losses did not reflect a lack of effort.

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"I tried to beat him," says Batchelder, who explicitly remembers that when he left the company he was--for that week--ahead of Pickens in the racquetball standings.

Strangely, Pickens recalled those matches, too, standing under the chandeliers of the Omni Hotel for Mesa's annual meeting two weeks after Forbes had proclaimed Batchelder's victory over his old boss.

The published connotation was still eating at Pickens. Though he still declined to be interviewed for this story, he took time to clear the record about the Forbes account.

"To say David Batchelder bagged me--that was a joke," Pickens insisted. "He never beat me at racquetball or anything else. Time beat me.

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