The Lay-Off Monologues

How I Fell Off the Fast Track

Episode 1: Character - The First C of Credit By: Thomas Hobbes

Once upon a time in a galaxy far, far away I was hired by one of the world’s largest money center banks. It was the beginning of the career I felt destined for.

Initially things went swimmingly. Top of my class in the credit training program, rotations through several divisions of the bank, VP at age 27, one of six elite aides to a major division’s EVP for credit, senior credit authority for all large deals generated by more than 600 account officers. Then things started to head south.

A customer of (one of the up and coming districts)   Company had been an iconic name throughout the thirties, forties and fifties. Unfortunately, as is too often the case, they had allowed time to pass them by. In an attempt to regain relevance the company had entered into an aggressive acquisition and diversification program.

My initial exposure to the client was a request for an $80 million Letter of Credit to guarantee a performance payment as part of a new acquisition. After analysis if the performance criteria were meet it was a money good transaction. If the goals were not achieved the Letter of Credit would not be called. I heartily approved the deal as a reasonable credit risk.

In the course of my review I did note a troubling memo to the file concerning potential conflicts of interest and possible appearance of self-dealing on the part of the company’s CEO. On two prior occasions my bank had financed purchases by the CEO of assets from his company. According to the file he had been strongly warned to not do it again.

Less than six months after approving the LOC I was called to a meeting with the account officer, his boss, the district head, and the district credit officer. The client was requesting a new loan. The meeting started in good spirits, I knew the players and the client and was favorably disposed to all.

Then I heard the request. In a misbegotten attempt at diversification the company had acquired a casino. The proposal was to fund a purchase of this casino by the company’s CEO. When I heard the deal I was dumbfounded. This was exactly the type of thing the client had been warned against.

Once I picked my jaw of the floor I said “We should not be talking about a new deal with these folks. We should be asking if we should be doing business with them at all. I will not sign off on this ticket.” You could have heard a pin drop. The meeting quickly adjourned.

Having a weak bladder and low tolerance for stress I immediately headed for the men’s room. As I sat down I heard the door open and in came the three proponents for the deal. I pulled back my shoes so as to be unnoticed and to listen to their conversation. The gist of the exchange was to initiate a campaign to discredit and destroy me.

The next day I went to see my immediate superior. He was already getting huge blow back from the meeting. After a lengthy and at times heated discussion, I still refused to sign off on the ticket. My fundamental concern had to do with the old saw, “Do you want to read about this transaction on the front page of the local tabloids?”

Eventually my boss signed.

Twelve months later Forbes ran an article with the headline “With Friends Like This Do the Shareholders Need Enemies?” It was accompanied by a photo of the CEO leaning against his gold colored Rolls Royce.Within six months the customer had been totally booted from the bank. Unfortunately it was too late for me.