With a three-hour drive ahead of us, it was an early pick-up for Dr. Merlot. He was slow getting in the car and did not make eye contact, which in light of his obsession with wine was not all that unusual. As he was struggling to align his safety-belt I got a glimpse of his face.
“Whoaaa dude! Rough night?” I inquired. “Bad wine? You look so bad you might have to get better to die.”
As an oddity, he passed on returning the smack. “No bad wine” he responded in a surprisingly subdued tone. “My sister died last night,” followed by an emotional pause. “As you know she’s been struggling so I cannot say I am shocked but the reality of losing my only sister and being the lone survivor, is a bummer. She was my biggest fan, always encouraging and never critical; and as you know,” finally cracking a smile, “my life has been abundant with opportunities for criticism. She was crazy as I am; my original wine partner, in the grip of the grape. She covered volume and I covered quality. Most siblings can only dream about a relationship such as ours, which too often, I took for granted.”
With a heavy heart, I said, “Sorry Doc. I know you guys were close. Are you sure you want to continue the mission? I can handle these guys. We are just going to discuss the allocation of sales proceeds.” Doc responded, “No, this is a big day and they need us to iron out any wrinkles. It needs to happen and I’m sure Jack is counting on me being there. Who else would he rely upon when his emotions hit overload?” So, Doc and I proceeded on our rather sullen three-hour drive punctuated with off and on tears and laughter as he reminisced his life with his dear sister and described the jostling with her family regarding the final arrangements.
We arrived at the administrative suite of the twenty-two-dealership family, which was a-buzz with accountants, buyer’s reps, brokers, factory reps, bankers, etc. “How’s it going, Missy?” I asked of the daughter of the founder as she buzzed by in search of their CFO.
“Last night my sister died, today you sold this business and I don’t know which makes me sadder.”
She responded, “If I had a gun, I would start looking for Murphy because if it could go wrong, it has. We’ve been at this for two days, with the last two hours arguing over the pencils and bottled water. We should be finished soon and we will gather in Dad’s office.” “OK,” I responded. “We are just going to sit here, out of the way, until you are ready.”
And there we sat in the reception area for an hour or so watching the classic hub-bub of a closing. On the positive side, we knew most of the attorneys, accountants and factory reps and therefore were not in the least bored. Eventually Missy returned and said the eagle had landed and we could now have our meeting. We followed her into Jack’s office where her father Jack, her husband Jake, and her brother, Jack, Jr. were assembled and engaged in hardy debate which was one of their specialties.
“Dad, I cannot believe that you accepted those deducts on the real estate valuation. Since those butts arrived two days ago, all they have done is tell us what we are paying for. Although I was not the biggest fan of this sale, I am glad the closing occurred because if you continued to agree with their deducts, in a couple of days we would wind up owing them money.”
“Jr, why don’t you drink a big glass of shut-up?” responded Missy with her classic smile. “Whine, whine, whine! It is amazing how little you do and how much you find in what’s wrong with what others are doing, mostly trying to please you. Have you ever listened to how little you say that is positive?”
I could tell that today, of all days, Missy was in rare form. Evidently, she had hit the wall with the closing and with her brother. She was taking no prisoners. “Hi gang, can we get started?” I asked looking at the various family members attempting to get them to focus on me. “The horse is dead, time to dismount.”
“Hi Loyd. Hi Doc,” responded Jack. “Welcome to our madness. Apparently, the wire transfers have been completed so I agree, the deal is done. I am glad it’s over. I did not anticipate how difficult it would be to say good bye to all our employees. It is sad to think that I will not be hanging out with some of these guys and gals who have been working for us 20, 25 even 30 years. I guess in a few days I will have to take these wonderful pictures off the wall, throw these trophies in a box and vacate this office. When you guys were babies, you used to play in that big chair Doc is sitting in.”
“Not to worry Dad,” offered Jake, Missy’s husband as patronizing encouragement with his normal fabricated attitude. “We will set up your new office just like this. It will be just as comfy. You need not be sad. We’ll be right around the corner and your friends will know where to find you.”
“Oh, for Pete’s sake, Jake will you give up that Tony Robbins crap? Dad’s bummed, I’m bummed, we all have some sadness about the sale.”
“What’s there to be sad about?” challenged Missy looking around the room. “We just scored millions of liquidity to do whatever we choose and we are leasing the real estate which will provide us terrific income without the market challenges that we all know are coming. This is the culmination of a well-developed plan. And thanks to Loyd and Doc’s efforts over the last 15 years, there will be significantly less estate tax than our life insurance.”
Having been unusually quiet, the Doc stopped the clamoring with the timing of his classic profundity. “Last night my sister died, today you sold this business and I don’t know which makes me sadder.” The room went to absolute silence.
After a protracted pause to absorb the shock, Jack got out of his chair, came around his desk, put his hand on Doc’s shoulder; “Doc, my condolences.” The family joined in their regrets and then Jack continued. “You referred to your sister often, so I know you were close. I share your pain as I still feel the loss of Suzzi. What are you doing here? You should be with your family. Is there anything we can do?”
“No Jack. Thank you for the gesture. I don’t think that her family believes her surviving brother should be part of the planning, so I am in the right place, keeping my mind occupied.” Jack began working his way back to is seat and Doc continued. “But trust me when I say, it is sad for Loyd and I to see this business sold to a public company that might possibly disregard the culture we have all worked hard to create over the last 25 years. I’ve told you many times that the sale of a family business is a viable succession option. I just never thought you would do it considering my arguments about all the relationships you will be severing, capital gains tax and the challenges of reinvesting in stocks and bonds. But I get all your reasons and I acknowledge that they are all good, even right. Your reasons just don’t make me any happier that your legacy may have just gone into the dumper in exchange for admittedly a hell of a lot of money. However, to be fair, it could be the start of a new legacy for you and your family. I notice that you have a bottle Merlot over there ready for a toast to celebrate the sale. After we do that, and before we get to work, can we have another toast to acknowledge the departure of both a wonderful business and a wonderful sister?” “For sure Dr. Merlot, let’s drink to the passing of your sister the passing of this business. Agreed, both are sad events. Junior, man the cork screw and burnish the glasses!”
Regardless of the scenario or event, communication is a critical component in any relationship, family business included. In the end, what we believe to be the right path forward for our family, may not be the popular opinion. However, if you are able to come together, and celebrate as a family, in the end, that is truly all that matters.
Author: Loyd Rawls
Loyd H. Rawls, President/Chairman of The Rawls Group, has specialized in succession planning for closely-held, family owned businesses since 1973. Well respected in his field, Mr. Rawls is a highly requested speaker and has published numerous articles and publications on this subject such as “Seeking Succession: How to Continue the Family Business Legacy” and “The Succession Bridge: Key Manager Succession Alternatives for Family Owned Businesses.”