What Happened to Big Idea? (Part 10)
So there you go. That's the story. Once the verdict came in, there wasn't much left to do except get out of the way and let the lawyers argue over who got what. Big Idea was headed towards liquidation. Rather than allow the company to be stripped in the alley like a cheap Yugo, though, we opted to attempt to sell it in one piece in a tricky maneuver called a “363 Bankruptcy Sale.” I'm not sure what the “363” stood for, but it gave the proceedings a nice ring – like a trick football play. (“We're going to run the ol' ‘363.' Johnny, you button-hook around the swingset. Carlos, you fake left and then hide in the dumpster until you hear me yell, ‘Barbara Walters.' Ready? Break!”) The goal was to keep the assets together to allow the company to keep operating, and maybe even allow me to continue guiding it if the new owners saw fit. So over the summer of 2003 we ran the ol' 363, which involved sending out information packets on the company to anyone and everyone who expressed an interest, then sitting back as they all came into town to sniff around, kick the tires, and check Bob and Larry's teeth. To Lisa and I it felt a bit like our children were being put up for auction. Like we'd lost the family farm, and now the neighbors were all coming over to see if they wanted to bid on the kids. It hurt.
One of the “highlights” of the process came early on in a meeting with our bank. Since the sale process would take 3-4 months and the price the bank would get for the company would decrease if the company shut down, the bank needed us to keep the team together. We calculated that Big Idea needed about $4 million to keep operating and keep the staff onboard through the sale. Our bank agreed to lend the money (which would be fully recouped out of the sale price – assuming the company was successfully sold), but then turned to me and asked that I personally guarantee the loan. I gulped. They gave me a few days to think it over. I was in the process of losing everything I owned except my house and the bank was effectively asking me to, in exchange for their assistance in my losing everything except my house, pledge to them my house. It didn't seem like such a good idea to me. I mean, at some point, it seems, you need to stop the bleeding. I drove down to their offices in Chicago's Loop several days later and, very nervously, declined. As I held my breath wondering what would happen next, the two bankers looked at each other, then admitted that they sort of expected I would say that. They would go ahead with the loan anyway. I resumed breathing.
I was on my way to the parking garage to drive back to Big Idea and get back to work, when something remarkable happened. It occurred to me that there really wasn't anything left for me to do. I needed to show up whenever a potential buyer was in town to kick the tires, and I needed to keep the company in a reasonably functional state so a new buyer could pick up where I had left off (with or without me), but there really wasn't any urgent need for me to do, well, anything at that point. This was a very new feeling for me. After six years of maniacally building Big Idea and four years of maniacally trying to keep it from falling apart, I now found myself at a point where I could no longer do either. I was done.
Instead of getting in my car and heading west towards Big Idea, I found myself walking out of the LaSalle Bank building and heading east through the Loop. Four blocks later I was staring at the Art Institute of Chicago. I went in, bought a ticket, and spent the next hour-and-a-half quietly gazing at French Impressionist landscapes. Monets, Pissaros, Seurats. They seemed about as far as you could get from a 363 Bankruptcy sale. When I left the museum later that afternoon and headed back to the bank's parking garage, I felt about 100 pounds lighter. I felt released. Not like someone who has been unexpect-edly let out of prison, but more like someone who, having attempted to pull a very heavy weight up a very steep hill for a very long time, has suddenly been told they can stop.
The rest of the year, although emotionally difficult, wasn't nearly as difficult as the prior year had been. It was clear that God was allowing a chapter of my life to close and that, regardless of what my continuing role at Big Idea might be, nothing would be quite the same again.
The rest of the year went something like this: A 363 sale requires something called a “stalking horse bidder,” which is a buyer who makes an offer for the company in question that the bank finds acceptable. This offer, then, sets the terms and the starting price for a court-directed public auction to follow. (Throughout the process I was never quite sure if it was “stalking horse bidder” or “stocking horse bidder.” Neither made any sense to me, frankly.) Classic Media emerged as the stalking horse bidder, primarily because they were the first interested party to make an offer that included no contingencies. (In other words, no conditions like “subject to signing Phil and Mike into long-term employment agreements” or “subject to successfully renegotiating distribution agreements,” etc. Banks hate contingencies.) Notices now ran in the newspaper announcing a mid-November public auction. Of the 40-50 parties that expressed interest in the company, seven showed up in Chicago for the auction, checkbooks in hand. Several Christian companies were there who had expressed great interest in having me continue to guide Big Idea. Another Christian bidder was there who told me, as a matter of Christian principle, that my role in the failure of Big Idea should preclude me from any future involvement. Several non-Christian companies showed up as well, primarily looking for an opportunity to buy an undervalued media asset. And at least one Christian billionaire was in the running, hoping to ensure Big Idea's survival as an independent ministry. I was familiar with all of the bidders – except one.
A week or two before the auction, a tiny Christian company from Minnesota turned up at our door. “God told us to buy Big Idea,” they said. While they were marginally involved in media, their experience was shallow and they lacked even an inkling of a plan for what they would do with Big Idea once they had purchased it. At one point, in fact, they confessed that their plan was to “buy Big Idea, and then wait for God to tell us what to do with it.” Given that there were already multiple qualified Christian bidders in the running, this new presence wasn't entirely comforting. I told myself it wasn't an issue, as I doubted they had the wherewithal to last long once the bidding got going. Boy was I wrong.
The public auction was a one-day affair. Show up in the morning, walk home with Bob & Larry. By mid-morning all the bidders were present in a conference room at our law firm in Chicago. Back in Lombard, we huddled in our conference room with the bidders listed on a whiteboard. To break the tension we tried guessing the outcome – “handicapping” the horse race, if you will. Much of the day progressed slowly, as various bidders threw out offers, then took long breaks to collect their thoughts and calculate their next moves. By late afternoon the process was still creeping along and no one had yet left the room. Then something happened. In just an hour or so, a bidding war had erupted with two players driving the price up surprisingly high. The bidders? Classic Media, and – you guessed it – the little guys from Minnesota. Opening at Classic's initial bid of $9 million and rising to $14 million over 8 painstaking hours, the price had now shot from $14 million to past $19 million in less than sixty minutes. Both parties were clearly determined to walk away with Big Idea. All other bidders had now gone silent – several packing up and heading home.
The bank and the creditors representatives were excited, but nervous. Who were these guys from Minnesota and did they actually have that kind of money? Fearing the newcomers would win the bid but be unable to finance the deal, the bank stopped the auction and asked both parties to substantiate their ability to close the deal at these levels. A representative from the venture capital fund behind Classic, present in the room, simply nodded. Not a problem. But the guys from Minnesota protested the move. “That wasn't supposed to be part of the process!” they said. With the Minnesotan's unable – or unwilling – to get anyone on the phone to verify their financial wherewithal, the bank and the creditors decided to halt the auction and declare Classic Media the winner. Final purchase price: $19.6 million. The next day in Chicago bankruptcy court the judge approved the sale, dismissing the Minnesotan's last minute offer to bid the assets “well over $20 million” if the auction were to be reopened.
Standing before the judge that day were no less than 17 lawyers, all dressed in fancy suits and all arguing as to why their respective client was entitled to some piece of Big Idea. None of them noticed me sitting anonymously in the back of the courtroom, quietly chuckling to myself. It had just struck me that the last event requiring so many grown-ups to dress up on my account was my wedding.
The auction was over. Bob & Larry had new parents and a whole host of new siblings, including Lassie, the Lone Ranger, Rocky & Bullwinkle, Underdog, Rudolph, Richie Rich and, more curiously, Casper the Friendly Ghost, Wendy the Witch and Li'l Hot Stuff, a cute little devil in a diaper. In their divinely ordained but ultimately unsuccessful quest to buy Big Idea, the mysterious late arrivals from Minnesota managed to spark a bidding war that knocked every other Christian bidder out of the race. A curious episode punctuating the curious resolution of a curious tale. As the leader of the Minnesotans left the courtroom that day he noticed me sitting in the back and whispered, “God's will will be done.” Looking back on the events of the last year, I believe he was correct. But more about that later.
Continued in Part 11 >