Chapter 16 - The hidden corporate losses
Special committee found Julian had manipulated presentation of several transactions.
Not by inventing all numbers.
By controlling which numbers reached decision makers.
Redwood Components:
Expected EBITDA at acquisition:
$38 million.
Internal downside model:
$19 million.
My executive packet:
$31 million downside.
Why difference?
Julian instructed team to exclude customer-loss scenario he called “speculative.”
Customer left six months later.
Carter lost:
$72 million impairment.
Was acquisition fraud?
Not necessarily.
But board disclosures incomplete.
Then Canton Freight.
Environmental liability at two depots estimated:
$24 million.
Julian negotiated seller indemnity but presentation minimized collection risk.
Later recovery only partial.
Another loss.
These made Carter look poorly managed.
Then did Julian personally profit before North Meridian?
Annual bonuses tied to adjusted EBITDA.
Paradoxically acquisitions increased scale and bonuses initially.
Total additional performance comp potentially attributable:
$3.1 million.
Company considered clawback.
Then emails where Julian described me:
“Emotionally nonfunctional.”
To investors.
Without my knowledge.
He told one lender:
“Arthur signs what we recommend now.”
That sentence hurt because it was partly true.
Then board’s view.
I was not found legally incompetent.
Independent neuropsychological evaluation—requested by me, not court—showed:
No dementia.
No significant cognitive impairment.
Stress and grief-related sleep/concentration issues improving.
No basis for guardianship.
No basis for declaring me incapable.
The entire incapacity narrative collapsed.
May you like
But the governance failure remained.
A CEO does not need dementia to delegate too much.
