It's the stock price, stupid!

Danny Wettreich, a 44-year-old native of London, England, personifies precisely what many find repugnant about American capitalism.

In the 13 years since he moved to Dallas, Wettreich has bought and shut down businesses, shuffled millions of dollars in securities, drawn suspicion from two federal agencies, and thrown people out of work.

"He's the most ruthless businessman I've ever met," says Lila Gill, a private investigator who researched Wettreich's past for Golden Triangle Royalty &Oil, a publicly traded Texas company Wettreich once threatened with a hostile takeover.

A former motorcycle-parts dealer, Wettreich now runs Camelot Corporation, a publicly traded holding company riding the Internet tidal wave. He dismisses the lawsuits, angry partners, and jobless Americans he has left behind. It's not his history of closing businesses that matters, scolds Wettreich; it's the value of shares in Camelot--today. One can sum up his credo like this: "It's the stock price, stupid!"

Wettreich's philosophy is evident in the framed trophies in the windowless conference room at his company's far North Dallas headquarters: four small newspaper clippings from the business section of The Dallas Morning News. The stories chronicle the glorious four-day period in late August when Camelot's stock became the second-most active on the U.S. composite trading index, soaring from $1.97 to $7.03 per share.

The recent slump in high-tech stocks has knocked Camelot back down to $2.75, but that's still impressive for a company that has recorded three straight unprofitable years. It's also multiplied the value of the Wettreich family's beneficially controlled stock holdings to a heady $20.7 million.

None of it has happened by accident. Wettreich has boosted his company's market value by tirelessly touting its showcase product: a computer-software program called Digiphone.

Digiphone is designed to allow Internet users to talk to each other long-distance for only the cost of Internet service. The software wasn't even available for sale until September, but during the months before its release, Wettreich had helped promote it among penny-stock mavens through the computer online service Prodigy as well as on a World Wide Web site.

In Dallas, Wettreich conducted dog-and-pony shows throughout 1995 for the financial press and potential investors. Interest mounted with the news--also touted by Wettreich--that a member of the legendary Hunt clan, H.L. Hunt grandson Clark Hunt, participated in a $1.2 million private placement of Camelot stock.

Camelot hit it really big that week last August because CNBC financial tipman Dan Dorfman--recently sullied by reports of a federal probe into his ties to stock promoters--predicted the company's annual revenues would skyrocket from $1.18 million to as much as $100 million, estimates that even Wettreich had to acknowledge were "pure speculation."

In the past six months, the hype has helped Wettreich's unprofitable company raise more than $7 million through public stock offerings and private placements.

Today, Camelot seems to stand on the edge of the high-tech boom, in control of a sexy new software product and a burgeoning chain of "Mr. CD-ROM" retail software stores; though Camelot operates only five Dallas locations that have been open four months, Wettreich projects an expansion to 100 franchise stores across the country by the end of 1996.

What's uncertain is whether Digiphone will catch on any better than the video telephone among consumers. And what's not generally known among those dreaming about Camelot are the past business failures of their English knight in shining armor.

"I don't want to rehash old, irrelevant information," says Danny Wettreich. The CEO of Camelot Corporation has parked his large, pinstripe-suited frame in an upholstered chair in the company conference room.

He has a similar response when asked about practically anything more than two years in the past. "I must say that all this is old history and totally irrelevant to our present situation. Our stockholders are very pleased with our performances."

Wettreich prefers to talk about the brilliant strategy that has made his company a market darling. In addition to selling a hot product through giant retailers like CompUSA and Best Buy, Wettreich boasts, Camelot Corporation is creating a vertical niche for itself by selling Digiphone on the shelves of its own Mr. CD-ROM stores.

Says Larry Boyd, a Collin County lawyer who sued Camelot and its chairman, "They are clearly in the business of trying to help people get excited about their stock. What is annoying to me is that they never have any [net] income."

With Wettreich, there is often more--and less--than meets the eye.
The "management biographies" section in Camelot Corp.'s 1995 annual report sums up the CEO's British business career succinctly: "Mr. Wettreich was an executive with two London, England, merchant banks in the mid-1970s. Subsequently he was the owner-manager of a private distribution company, and thereafter chief financial officer of a $60 million retailer listed on the London Stock Exchange."

In truth, Wettreich's early years were considerably more colorful than that summary suggests.

After earning his degree in business services during the early 1970s from the Polytechnic School of London--an institution one tier below a full-fledged British university--Wettreich worked for two years in the corporate finance department of two investment banking houses, Hambros Bank and Charterhouse.

Wettreich launched Zara Securities Group, a business he named after his wife, Zara, who came from a wealthy family. The holding company traded in spare motorcycle parts and invested in real estate. By 1980, Wettreich had taken a job as chief financial officer of Bambers Stores, PLC--his father-in-law's company. (He sold or shut down Zara's holdings over the next three years.)

The 150-store clothing chain, with shops throughout England, had performed quite well before Wettreich came on board. During his three years there, Bambers, which once earned as much as $3.5 million, began running in the red. According to court filings, it lost $7 million in 1983.

Wettreich quit in July of that year, sold all his Bambers stock, and moved to the United States. Two months later, Bambers went into receivership, the British term for bankruptcy, rendering its stock nearly worthless.

As chief financial officer, Wettreich presumably played a limited role in the company's rapid decline, but the timing of his departure was fortuitous--and conspicuous. In an article published shortly after Bambers announced its receivership, The Daily Telegraph reported that Wettreich, the son-in-law of the chairman, had been unable to aid accountants investigating the company's books because he had emigrated to Dallas, Texas.

The company's shareholders later sued six former Bambers directors, including Wettreich and his father-in-law. The suit charged that the defendants and the company's outside auditing firm had breached their fiduciary duties and run up $4.31 million in excessive costs. The suit also alleged the directors had improperly changed the method of valuing the company's stock during Wettreich's tenure. Ultimately, some of Wettreich's codefendants settled, allowing him to testify in later litigation that the case had been dismissed.

By then, Wettreich had long been a resident of Dallas.
Wettreich says his prime reason for moving across the Atlantic in 1983 was to give his three children a chance to grow up in the cradle of capitalism, which he determined was Dallas. "I made a decision to rear my kids in a pro-capitalist environment," he says.

Before moving his family, he had already started a fledgling resorts-development company based in Dallas, named Texas Country Gold, Inc. The company owned a country club called Country Gold on Cedar Creek Lake, 50 miles southeast of Dallas. "When I made the decision to emigrate," Wettreich says, "I started acquiring real estate in Texas."

Low-key and quiet, Wettreich seems the antithesis of the high-powered, polished pitchman. Outside the office, he favors flannel shirts and jeans. He seems to have happily shed the oppressive formality of his birthplace for the more casual style of Dallas. "I didn't like English taxes and I didn't like English weather. I don't want to spend a lot of time worrying about accents and schools."

By 1985, he had set himself up as a financial wrangler in Dallas, selling his Country Gold club and establishing Wettreich Financial Consultants. The new business focused on public companies, and soon began carrying out what would become trademark transactions: merging dormant public companies with fledgling private ventures to allow entrepreneurs to sell stock without going through the expense and hassle of an initial public offering(IPO).

Typically, a businessman who wants to raise money in the public market to expand must pay accountants, printers, bankers, and lawyers to meet the hefty Securities and Exchange Commission disclosure and filing requirements to launch an IPO. On average, those costs run between $100,000 and $200,000, according to Lawrence Steinberg, a Dallas corporate lawyer associated with Jenkens & Gilchrist. Then the entrepreneur must pay investment bankers a commission--usually about 10 percent of the amount raised--to market, or underwrite, the offering.

Wettreich offered entrepreneurs a way to dodge much of that trouble and expense by merging their ventures into existing public companies. Through press releases, Wettreich would promote a company's newly acquired assets, boosting the stock prices and--at least temporarily--the value of the company. According to deposition testimony, Wettreich's firm typically received a fee of $20,000 to $30,000 for such services. Wettreich could also make money if he had invested in the stock and managed to bolster the price.

Wettreich would scan financial reports and classified advertisements to find dormant public companies, concerns that were trading at low stock prices and had few, if any, performing assets. He would then place his own classified ads in newspapers nationally, announcing that he had clean, publicly traded shells to offer.

The practice was an enormous bookkeeping undertaking. Wettreich testified that he cannot even recall all the names of companies he acquired and merged with shells. SEC searches for companies affiliated with his name have yielded lists of more than three dozen.

The transaction that Wettreich does proudly recall produced Phoenix Network, a company now traded on the American Stock Exchange. In 1987, San Francisco entrepreneur Tom Bell saw Wettreich's classified ad offering a shell company for sale. Deeply frustrated, Bell had been trying unsuccessfully for years to raise capital for his business concept of selling trunk-line telephone service directly to companies and then going back and subcontracting the service from big common carriers, including U.S. Sprint.

Bell flew to Dallas to spend time with Wettreich and his family. "I found him to be a very straightforward guy," says Bell. "If he said he was going to do something, he did it."

Bell and Wettreich merged the start-up telephone-service company with an inactive shell company, christened the new entity Phoenix Network, and began selling stock.

It worked. Bell acquired the capital he needed to launch operations and the deal was also profitable for Wettreich. Bell estimates that Wettreich earned $2.5 million by the time he sold his shares and quit his company directorship in late 1989. Although Bell expresses disappointment that Wettreich pulled out so soon, he doesn't complain. Phoenix's stock price has continued to rise. The company is now worth about $105 million. "Danny makes things happen," says Bell. "He is just looking to hit the big home run."

In October 1988, Wettreich acquired the company that would become the predecessor for Camelot. In what the Dallas Business Journal termed "an unusual stock transaction," Wettreich used his children's trust, a stock-transfer company he had established, and the issuance of new shares, to take control of Bolyard Oil & Gas, a struggling Denver-based publicly traded company, from the family members who had held majority ownership.

On paper, Wettreich merged a private stock-transfer company he owned into Bolyard, paying for the acquisition with no cash but by issuing 8 million new shares of stock. He gave the former directors of Bolyard shares in the new company. In practical terms, the deal meant that Wettreich assumed control of the Denver oil company, which traded on the NASDAQ exchange. After the merger, he moved Bolyard's headquarters to Dallas. The family directors resigned from the board. Wettreich promised in press releases to expand and diversify the company, which had reported a $67,785 loss on the previous year's revenues of $100,819.

Within three months of Wettreich's takeover, he had changed the company's name to Camelot Corporation. Wettreich says he selected the name because it had "good connotations on both sides of the Atlantic"--martyred President John Kennedy in America, the legend of King Arthur in England.

With his new company, Wettreich threatened a series of hostile takeover bids, mostly in the oil industry. Three of his targets were: Big Piney Oil & Gas Company, based in Salt Lake City; Golden Triangle Royalty & Oil Company, in Cisco, Texas; and Tyrex Oil Company, based in Casper, Wyoming.

Wettreich did not actually acquire any of the companies. But he didn't walk away empty-handed either. In April 1990, Wettreich bought 1.8 percent of Big Piney's outstanding shares, announced a shareholder solicitation to replace the directors, and filed suit. The company offered him $75,000 to settle. Deposition testimony shows he took the money and backed off.

The Golden Triangle directors got the same result by playing hardball. Responding to his takeover moves, they sued Wettreich and dug up information about his past business dealings. "His general [approach] was to take over a company, strip it, leave the shareholders with nothing," says Golden Triangle director Robert Kamon, president of the company at the time. Kamon says Golden Triangle's tactics scared Wettreich off.

Wettreich denies he was intimidated, and says he quit simply because "the fight wasn't worth the winning."

In 1993, as Wettreich tried to take over Tyrex, his own auditors were complicating his ambitions. Hein & Associates, a Dallas accounting firm, had refused to meet the deadline for submission of Camelot's annual report to the SEC. In August 1993, Wettreich fired the accountants; that month, he also abandoned the move on Tyrex. "All we can do is hire more auditors," he told the Dallas Business Journal. "They didn't complete our audit, and we don't have an explanation for it."

In a letter to the SEC reported in the November 15, 1993 issue of Accounting Today, Hein & Associates said it failed to meet the deadline because of concerns about Camelot's transactions with members of Wettreich's family, as well as the propriety of certain Wettreich deals. The accountants reportedly asked the SEC to look into the company's acquisition of a building and a related mortgage, payable to a trust for the benefit of Wettreich's children; Camelot had issued $175,000 in preferred stock to repay the debt. The deal, the accountants stated in their letter, "caused us to question the economic substance of the transaction."

As a matter of policy, the SEC will not confirm or deny the existence of a pending investigation or one that led to no formal action. There is no formal record of any action against Wettreich or Camelot.

A Dallas partner at Hein & Associates, while declining to elaborate, confirmed that the SEC did make inquiries about the matter. Two former Camelot employees also say SEC investigators interviewed them about Camelot and Wettreich.

Wettreich says he is unaware of any SEC probe into any of his dealings, and that no one from the agency has ever questioned him.

While all three oil companies struggled to escape Wettreich's grasp, other businesses embraced him, at least at first.

Kathleen Williams, 48, now works as a professional photographer in Portland, Oregon. When she met Danny Wettreich in July 1991, she owned and operated Business Investigations, Inc., a successful private-investigation firm that concentrated on researching financial institutions and their officers.

Williams' firm was one of 28 nationally to have the approval of the Resolution Trust Corporation to probe failed financial institutions, a growth industry in those days. The year she met Wettreich, she had won the small businessperson of the year award from the Association of Women Entrepreneurs of Dallas. Inc. Magazine had even run her picture. Internal Revenue Service returns show her six-year-old business earned $67,275 before taxes on revenues of $2.55 million and that she employed more than 100 people.

Out of the blue, Williams recalls, Wettreich telephoned her during the summer of 1991 and told her Camelot Corp. wanted to buy her company.

A professional at ferreting out financial bad guys, Williams found Wettreich convincing. "He wined and dined us for six weeks. He came across as real smooth." She says Wettreich promised to help her expand the business nationally, to let her keep running it, even offered her a seat on his board of directors. She knew she could be out-voted by Wettreich and his in-house lawyer, Jeannette Fitzgerald, because they comprised the entire board, but Williams trusted Wettreich.

Wettreich proposed an all-paper transaction. Camelot would purchase her company for $312,000, to be paid through Camelot shares, priced at $3 apiece. Williams received no cash, but she and a partner also received preferred shares in Camelot.

Only days after the deal closed on July 8, 1991, Wettreich fired all but five of Williams' employees, telling her it would be more economical to contract out the work. Williams was skeptical. But "at first," she says, "I tried to tell myself it would work out."

Things went from bad to worse. Though Williams says Wettreich assured her he would expand the company and let her call the shots, he was making all the decisions. She was angry and panicked, but she could see no way out. Wettreich had acquired control of all her company's receivables, which she later valued at $249,912. She says she no longer even had access to the company's accounts. Without notice, Williams says, Wettreich stopped paying her company credit-card bill. "You can't do anything," she recalls, "because you don't have any money."

In December 1991, the Dallas Area Rapid Transit Authority rejected BII's request for certification as a woman-owned business, citing Williams' sale of the company to Camelot. The company's formal status as a business owned and controlled by a woman had been critical in its receipt of work from the RTC. Though the DART ruling suggested the RTC would also conclude that the Camelot purchase constituted a change in ownership--and RTC rules require a contractor to inform the agency of any ownership change--Wettreich decided to say nothing to the RTC, presumably to protect the work it received under the "woman-owned" provisions, according to Williams.

The company continued to work for the RTC.
In March 1992, Williams quit, saying she was unwilling to continue to collaborate in the company's misrepresentations. "BII is continually represented as a woman-owned business, when, in truth and in fact, it is not," Williams wrote Wettreich in her resignation letter. "This violates my personal honesty, my sense of character, and demonstrates a lack of integrity on the part of the company which is intolerable to me." The following month she told the RTC of her concerns about BII's woman-owned status.

While the RTC began to investigate, Williams filed a $3 million suit in Collin County district court against Wettreich and Camelot. She alleged that Wettreich had misrepresented BII as a woman-owned business to win work from the federal government.

Researching Wettreich's past, Williams and her attorney, Larry Boyd, added other claims: that Wettreich converted company assets to personal use; that he violated SEC rules by failing to notify Williams, then still a Camelot director, of a March 1992 private-stock placement; that Wettreich violated securities regulations by failing to disclose Williams' resignation in SEC filings; that he allowed his children's trust and brother to buy Camelot stock at unfairly low prices; and that Wettreich manipulated the company's stock to dilute the value of others' shares while boosting his own assets and those of his children's trust and a company owned by his wife.

On the stock-manipulation allegations, Williams cited Camelot's April 1992 purchase of a building owned by the children's trust; the building was then transferred back through Camelot to another company, Forme, Inc., which Wettreich's wife controlled. (One former business associate pronounces that company's name "for me," insisting that the name reveals the company's true purpose. Wettreich says he cannot remember his inspiration for the name, but that the final "e" is silent.)

Wettreich denies any stock manipulation or confusion of personal and corporate assets. He says he disclosed all material corporate events in his routine filings to the SEC and that Williams' suit, on many points, reflects "an incorrect understanding."

The RTC sided with Williams on her central point. In correspondence with the agency, Wettreich had claimed that his wife, Zara, through her shares in Camelot, owned a majority of BII, Williams' old company. He also claimed that Fitzgerald, his in-house female lawyer, operated the Camelot subsidiary on a day-to-day basis.

On February 22, 1993, Howard Cox, director of the RTC's Office of Contractor Oversight & Surveillance, recommended revocation of BII's woman-owned status. While agreeing that Zara held majority ownership in the Camelot subsidiary, Cox concluded that, from July 1991 through August 1992, Danny Wettreich had run the business, setting its policies and doing the bulk of its hiring and firing. The RTC barred BII from receiving preference in contract awards on the basis of woman-owned-and-operated status.

By the time of the RTC ruling, the decision about BII's status was moot; there was no more promising investigations company.

A year later, in March 1994, Wettreich reached an out-of-court settlement with Williams. The terms of the settlement remain confidential, but her attorney, Larry Boyd, says the deal covered the costs of her litigation and compensated her for her lost business.

Today, Wettreich dismisses the significance of Williams' suit. He paid her, he says, because "the cost of the litigation was horrendous." About Williams, he says, "This was a disgruntled ex-employee"; about her allegations, "Pure nonsense."

Wettreich offers no apologies for shutting down companies. "My function is to do what is correct for my stockholders. If our decision was to close the business down, the result has been positive for our shareholders."

Last summer's spike in Camelot stock price would have benefited those, like Williams, who had received stock in exchange for their businesses; but Williams and several others who parted ways unhappily with Wettreich wanted nothing more to do with him and sold their shares before Camelot's price climbed.

In extracting a settlement from Wettreich, Williams broke fresh ground. Most of the small-business owners who sold their companies to Wettreich and felt cheated never attained any measure of revenge in court.

Linda Blanchard, for example, didn't know Wettreich from a stranger when he first called in July 1992, inquiring about purchasing the real-estate appraisal company Blanchard and her father had built. The Camelot CEO's pitch sounded good. Recalls Blanchard: "He said he wanted to buy my business and put offices all over the U.S."

Given the Dallas real-estate slump, Blanchard knew she needed to expand her commercial and residential appraisal business nationally. Wettreich and his shareholders, she thought, could take on the burden and risk of expanding the company for her.

Wettreich offered to have Camelot buy McKee Blanchard and Associates for $162,500, payable in Camelot stock. By the end of July, Blanchard had agreed, with the understanding, she says, that she would continue to operate the company.

Just days later, Blanchard concluded she had made a terrible mistake. "It was an awful nightmare experience," she says. "As soon as he bought my business, I never talked to him again. I opened and the very next day he got my receivables and my cash."

On October 1, just two months after buying her company, Wettreich walked into Blanchard's office and told her:"Go home." He was shutting down McKee Blanchard.

Litigation is still pending with the landlords of the building Blanchard and her employees had occupied, but Blanchard says she didn't have the energy or resources to sue Wettreich; all her cash was in the business and he had taken it. "I just wanted to wash my hands of him."

Wettreich says he closed the businesses he bought from Williams and Blanchard because they "depended on the individuals who were managing them" and the two women failed to meet his standards as managers. Never mind that both women had run their companies profitably before the companies were acquired by Camelot.

Wettreich contends he shouldn't be faulted for buying companies with bad managers, and he insists his shareholders don't think so either. As evidence, he repeats his management mantra: "The ultimate proof of the pudding is in the stock price."

In July 1993, Camelot Corporation made the leap from real-estate services to wholesale videotape distribution, purchasing 40 percent of New Jersey-based Goldstar Video Corp. Goldstar distributed children's videos, including such titles as Ernie's Big Mess and Dr. Seuss' Hop on Pop, to grocery and drug-store chains.

In exchange for the minority stake, Wettreich gave Goldstar owner Ronald Goldsmith 500,000 shares in Camelot, then valued at $218,750. But in October 1993, three months after Wettreich bought into the company, Goldstar filed for Chapter 11 bankruptcy protection.

Goldstar's death appears to have resulted from a self-inflicted wound. Goldstar acquired its videos almost entirely from Random House, paying the company a $1 royalty on each tape, with a guaranteed minimum annual fee of $1 million. The Random House agreement required Goldstar to restrict its distribution to supermarkets and drug-store chains.

In bankruptcy-court pleadings, Random House said it had terminated its contract with Goldstar because it caught the company violating the distribution restrictions beginning in May 1993, before Camelot had invested in the company.

The cancellation of the contract doomed the company. In its 1995 annual report, Camelot reported that it had written off its remaining equity investment with Goldstar.

Wettreich says he was unaware how severely the relationship between Random House and Goldstar had deteriorated. "It was not a good investment," he said.

Despite its rocky past, despite its lack of profitability, Camelot would rise to national attention--and make Wettreich's stock worth millions--on the back of a single product: Digiphone.

The Digiphone story starts with the entrepreneur behind it: Kevin Corson, a 38-year-old resident of Portland, Oregon. Corson, who had previously developed and marketed a voice-recognition program called Voice Blaster, met Wettreich in early 1994 when Stephen Froelicher, a Florida businessman, had introduced them.

Wettreich had gone into business with Froelicher in 1993, buying Froelicher's catalogue CD business for $25,000 cash and 202,000 shares of Camelot stock valued at $143,000. Together, Wettreich and Froelicher developed the concept for the Mr. CD-ROM retail-store chain. The two opened a test store in Florida, which they later closed.

Froelicher had known Corson through the CD and software business. When Corson told him about his plans to take public a company based on the new software he had programmers developing--allowing virtually free long-distance telephone calls via the Internet--Froelicher urged him to contact Wettreich.

Corson called, then flew to Dallas. "I hung around for about a month," he recalls. Corson says he recognized, by perusing old SEC documents, that Camelot and Wettreich had experienced their share of financial woes. "He would have a good idea, and he wouldn't get the right marketing," says Corson about Wettreich's past business ventures, "or he'd have the marketing but he wouldn't have a good idea."

Corson, however, was undaunted. Wettreich struck him as a cool cookie. "He seemed like he could handle bad stuff. He said things with an air of confidence," Corson says. He believed Wettreich had learned from the weathering he had endured. "He's young," says Corson, "but he has been humbled."

Corson and a partner decided to sell their rights to Digiphone to Camelot--and Wettreich. "We knew he would work harder than others because he has more to lose," says Corson. "His image as far as running a company was lagging. Danny has been through hell and high water."

In exchange for his interest in the Digiphone prototype, in February 1994 Corson received royalties, cash, and a spot on Camelot's executive ladder. Corson won't disclose the total value of the package, but says it could amount to more than $1 million, depending on how well the product sells.

By July 1994, Wettreich had begun putting bulletins on the Public Relations Newswire about his new vision for his company: "Camelot announces that it has discounted operations of its remaining two financial services subsidiaries which completes the restructuring undertaken by Camelot during the last 12 months. We have closed or sold all of our businesses to concentrate on exciting new ventures such as CD-Rom software ."

By February 1995, Wettreich revealed more about his plans about both the Mr. CD-ROM chain and Digiphone. Though the software was not yet available, Wettreich was touting it to investors through all the public-relations channels he could find.

His dispatch led to some embarrassing moments.
In an April 3, 1995, demonstration of Digiphone for a Dallas audience of bankers and other potential investors, Corson telephoned a colleague in Eugene, Oregon, using the software. The connection was made, but the Internet provider in Eugene unexpectedly disconnected the local user. Wettreich and Corson, red-faced, had to explain the snafu. "It was an eye-opener," recalls Corson, who termed the showing "disastrous." "We had only a three-minute window of opportunity," he says, "and some guys walked out of there thinking it didn't work."

Stan Bunger, then an anchor for KRLD-1080 radio, attended the event. "It was pretty funny," Bunger recalls. "You could hear people jeering in the back of the room: 'Buy a Mac.'" Bunger recalls an angry investor marching up to Corson, who was busy performing the demonstration, and demanding to know what the hell was wrong with the software.

Amid the chaos, Wettreich's performance impressed observers. Recalls one financial reporter in attendance: "As the presentation went down in flames, he was very cool."

In the long run, the embarrassing demonstration did little to dampen investors' interest in Camelot--and its hot new product. In June 1995, Clark Hunt, a grandson of H.L. Hunt and son of Lamar Hunt, along with partner Barrett Wissman, agreed to put $1.2 million into Camelot and to keep that investment in place for at least 12 months. Wissman declined to go into details about the decision, offering a comment that explains the gee-whiz appeal of Digiphone: "If there is a product [with which] you can make free long-distance calls, it's fascinating."

Last November, Wettreich raised another $5.3 million with a private placement to institutional investors.

The advertising copy touting Digiphone--part of a $1 million campaign--states its message simply: "Join the Digiphone revolution. Call anywhere. Talk forever. Never pay long distance." The print ads include an unusual feature: CAML, Camelot Corp.'s stock symbol on the NASDAQ exchange.

"I've never seen a company put its stock symbol on product advertising," sneers Daniel Nissan, marketing director of New Jersey-based Vocaltec, Inc., which offers Internet Phone, the only product competing directly with Digiphone.

In truth, both Vocaltec and Camelot have a long way to go before giving long-distance carriers sleepless nights.

Camelot is a step ahead of Vocaltec because it already has a product that promises full "duplexing," meaning both sides of a conversation can talk at once, giving the Internet telephone chat a more natural feel; but both software products suffer from what is known as Internet delay--brief but annoying gaps in conversations that last for parts of a second for U.S. calls and as much as a second and a half for international calls.

Product backers contend that the savings from Internet calling will far outweigh these minor annoyances, but they also suffer from the absence of an industry standard, making it even less likely that two Internet users will have the compatible software necessary to talk long-distance. The prospect also remains that Internet long-distance telephone calls will go the way of video phones--a much-ballyhooed concept yet to hook consumers.

It's hard to tell how Digiphone, priced at about $50 in most stores, is moving so far. In September, the month Digiphone became available, Camelot reported that it had $2 million in preliminary orders. The company has reported no subsequent sales figures.

Also unclear is how the Mr. CD-ROM stores are faring. Though only five are open now, Wettreich has raised expectations, predicting a phenomenal rate of growth: 100 franchise locations by the end of 1996.

At the company-owned Mr. CD-ROM store on the corner of Preston and Forest Roads, business seemed brisk one pre-Christmas afternoon. In an aisle marked "EDUCATIONAL" in bright red lights, a mother bemoaned the dearth of offerings for her child's Macintosh computer, but at the cash register, the line was three deep. Each customer held two or three CDs, most priced at more than $10 each, with the more expensive titles running as high as $100.

For a December 4 article published in Computer Retail Week, Wettreich said that the prior weekend for Mr. CD-ROM "was very good...basically what we had expected." He offered no specific sales figures then--and declines to offer any now.

Numbers from the quarter ending October 31--the most recent available--show Camelot Corp.'s performance remains underwhelming. The company reported a net loss of $798,696 on revenues of $527,144.

Though Camelot remains unprofitable, Wettreich exudes confidence about its future. For the first time, this past year he reported at least part of his own compensation in the company's annual report. In the past, Camelot's filings have always stated that Wettreich earned no salary directly from the company. Instead, Wettreich acknowledged in depositions, he was paid indirectly, through Wettreich Financial Consultants, which Camelot hired.

The most recent annual report shows Wettreich has entered into a 10-year contract with an annual salary of $250,000 and a cash bonus equal to 5 percent of the company's annual pre-tax profits. The climb in Camelot's shares from a 52-week low of less than $1 per share has boosted the paper value of Wettreich's stock holdings by millions. With the stock price closing on Wednesday at $2.75 a share, the value of his family's 43.5 percent stake in Camelot equals $20.7 million. That total of beneficially held shares includes unexercised stock options Wettreich maintains as well as the holdings of his wife, her companies, and their children's trust.

Wettreich, who for years operated on the edge of mainstream financial circles, also clearly now fully appreciates what favorable coverage from the business press can do for Camelot. At a recent computer-industry trade show in Las Vegas, Wettreich says, he conducted interviews about his company and its software for at least five different television crews, including one from Germany.

This story is another question. "I would only want to express a raised eyebrow about its relevance," he says about discussions of his track record. His concern: dwelling too much on his distant past--a period he defines more than two years ago.

"I would love to see a story that is 20 percent about yesterday and 80 percent about today," Wettreich says. About his battles and bankruptcies of earlier days, Wettreich concedes: "The more inventive a company is about creating its public structure, the more it tends to invite litigation."

How should one judge how well Camelot--and Danny Wettreich--is performing its job today, in Dallas, Texas, a seat of American capitalism?

It's the stock price, stupid!
By that measure--if by few others--it's still doing pretty well.

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