The Samurai Strategy Part 1

The Samurai Strategy.

by Thomas Hoover.

_"A financial thriller right out of the headlines." _Adam Smith

A high-finance, high-tech thriller that correctly predicted the 1987 stock market crash. It was the first fictional treatment of a major international concern of the Eighties. Set in locales as diverse as Wall Street and the offices of j.a.pan's powerful Trade Ministry, THE SAMURAI STRATEGY describes a scenario of murder, worldwide currency manipulation, a revival of j.a.pan's smoldering nationalism, and is set against a background of a new high-tech computer milieu. Matthew Walton, a freelance corporate 'takeover' lawyer is hired by a mysterious j.a.panese industrialist to purchase a New York office building and begin a ma.s.sive 'hedging' in the financial markets. Two weeks later, off an island in the Inland Sea, divers working for the industrialist's organization, recover the original Imperial Sword, given to j.a.pan's first Emperor by the Sun G.o.ddess, j.a.pan's 'Excalibur', and lost in a sea battle in 1185. He forms an '800-Year Fund' and billions of yen flow to his fingertips. He then dumps all the Treasuries j.a.pan had acquired and devastates the American economy.

As the story rushes to its stunning conclusion, Matt Walton goes to j.a.pan and determines that the 'Imperial Sword' is, in fact an unusual antique he once owned himself.

CHAPTER ONE

New York, New York. Friday, early September, dusk. Heading uptown on Madison. Sheets of icy rain washed the pavement, heralding the onslaught of autumn and the miserable winter to come. The city was poised for its cruelest months, that twilight of the spirit when strangers arm-wrestle for taxis, n.o.body has time to hold a door, and you cherish every fleeting human kindness.

Bring on the blizzards, the holiday madness. This winter I was planning something long overdue. To treat my daughter Amy, the Madame Curie of her ninth grade, to a real vacation. Just us. We'd leave at Thanksgiving and stay gone through the Christmas break. She got to live with me three months a year, and December was by G.o.d going to be one of the months. School? She'd already skipped a year; maybe she was a little too fast-track for thirteen.

Since Joanna, my ex, had already lined up her own holiday excursion (Amy the spy claimed it was with some divorced Tishman VP), she hadn't bothered inventing the usual roadblocks. Clear sailing. We'd open the house down in St. Croix and spend a month getting reacquainted. Work on the tan and some postgraduate snorkeling, a strategic move while I still enjoyed a small sliver of her attention, before a certain "totally terrific" skateboard virtuoso finally got around to noticing her. Only a couple of jobs needed finishing, but they'd be wrapped up with weeks to spare.

That night, in truth, had its moments of nostalgia. The destination was Sotheby's auction house, a place where Matthew Walton was greeted by name at the cashier's window. Home away from home for obsessive collectors. I leaned back

against the vinyl seat of the Checker, letting the rhythm of the streetlight halos glimmer past, and reflected on all those happy nights I'd made the trek with Joanna. She'd had no real interest in my collecting hobby, j.a.panese samurai swords and armor, but she was always a decent sport about it. Besides, she had her own pa.s.sions. While I was agonizing over long blades and short blades, she'd sneak off and browse for something French and nineteenth century and expensive. Fact is, I'd usually plan ahead and have something of my own on the block just to pay for that little sketch, or print, she suddenly had to have. Out of habit I'd even shipped up a couple of mistakes for the auction this evening (a hand axe and a lacquered-metal face guard).

Though tonight's sale had only a few odd items in my specialty, the slim offerings actually suited the occasion. It left the evening open, time for the real agenda--getting things rolling with a new client who'd inexplicably handed me a job as simple as it was strange.

The man, name of Matsuo Noda, had rung all the way from j.a.pan Friday before last, introduced himself in generalities, then declared he had a pressing legal matter requiring both speed and confidentiality.

Inquiries had led him to me. Would I have time to help him locate an office building to buy? He claimed he was head of a Kyoto consulting outfit that called itself Nippon, Inc., and he was looking for something in midtown, seventy-million range.

Honestly I couldn't quite believe he was serious at first. Why this job (just a little legwork, really) for somebody he'd never even met? I could swing it, sure, but now that j.a.panese investors were snapping up U.S. property right and left, who needed some ex-Texan turned New York lawyer knocking around? There was no rational reason to engage a corporate attorney.

"Out of curiosity, why aren't you working through one of the Tokyo firms here in New York, say, Hiro Real Estate or KG Land? Surely they could--"

"Mr. Walton," he interrupted smoothly but firmly, "allow me to say I have my reasons. May I remind you I stressed confidentiality."

"Merely asking." I took a deep breath. The connection was distorted, a high-pitched hum in the background, as though he wasn't using commercial phone lines. "If you want, I can look around and see what's on the market . . . and in the meantime how about sending along a prospectus, just for the file?"

"a.s.suredly," he said, "and I do look forward to working with you."

After a few more polite nothings, he abruptly closed out the call.

Peculiar. That wasn't how the j.a.panese road show usually did business.

From what I'd seen, Tokyo invests very cautiously and deliberately, sometimes "researching" a deal half to death. I momentarily wondered if it wasn't just one of the jokers from my old partnership pulling my leg.

He was real enough. A brochure arrived by overnight air, bound in leather, with a flowery covering letter. Two problems: most of the thing was in his native tongue, and what I could read didn't tip his hand. From the looks of its public disclosures, Nippon, Inc. was merely some kind of money manager for j.a.panese investment banks; it had almost no a.s.sets of its own. All I could find listed were a few million dollars, lunch money for a j.a.panese outfit, mostly cash parked in some short-term Euroyen paper. That, and a head office in Kyoto, was the sum of it. What's more, Noda only worked with j.a.panese banks and firms. No foreign clients.

So why did this man suddenly require s.p.a.ce in New York? An entire building. I honestly couldn't figure it. On the other hand, with any luck the whole deal probably could be put together with a few phone calls.

By way of introduction, let me say that I worked, technically, as a straightforward attorney-at-law. I say "technically" because I was, in fact, a freelance defensive back in the corporate takeover game, which these days is anything but straight. You'd have to go back to the roaring twenties to find so many creative screw-jobs.

Some people are drawn to power; guess I'm more attracted to the idea of occasionally whittling it down to size. So when some hotshot raider found a happy little company whose breakup value was worth more than the current stock price, then decided to move in and grab it, loot the a.s.sets, and sell off the pieces--one of the players apt to end up downfield was Matt Walton. For reasons that go a long way back, I liked to break up the running patterns of the fast-buck artists. It's a game where you win some and lose some. The trick is to try and beat the odds, and I suppose I'd had my share of luck.

Give you a quick example. Back in the spring, a midsize cosmetics outfit called me in as part of their reinforcements to fight an avaricious rape, better known as a hostile takeover, by one of their biggest compet.i.tors. After looking over the balance sheet and shares outstanding, I suggested they divest a couple of unpromising consumer divisions--namely a "male fragrance" line that made you smell like a kid leaving the barbershop, and a "feminine hygiene" product that could have been a patent infringement on Lysol--and use the proceeds to buy back their own common shares. We also threw together a "poison pill"

that would have practically had them owning anybody who acquired more than twenty percent of their stock. Our move scared h.e.l.l out of the circling vultures and reinforced my reputation on the Street (unduly harsh, I thought) as a give-no-quarter son of a b.i.t.c.h.

Another fact worth mentioning is that I worked without benefit of a real office; after selling off my piece of the law partnership, I operated out of my place downtown, with a telephone and a couple of computers. A kindly gray-haired dynamo by the name of Emma Epstein, who had a rent- controlled apartment down the block, dropped by afternoons and handled correspondence, filing, matrimonial advice, and the occasional pot of medicinal chicken soup. The only other member of my staff was a s.h.a.ggy sheepdog named Benjamin, who served as security chief, periodically sweeping the back garden for the neighbor's cat.

That was it.

Oh, yes, one other item. Crucial, as it turned out. I'd always been a collector of something--once it was antique spurs, for chrissake--but about ten years earlier I'd started to get interested in things j.a.panese and ended up going a little overboard about old swords and such. Joanna's unscheduled departure managed to burn out a lot of my circuits, and what had been merely an obsession grew into something a little crazy. For a year or so I became, in my own mind at least, a sort of American _ronin_, a wandering samurai.

You see, the j.a.panese warriors had a code that said you ought to live every moment in full awareness of your own mortality. When you adopt this existential outlook, so they claimed, all regrets, emotions, complaints, can be seen as an indulgence. You're ready to meet life head-on, to risk everything at a moment's notice. That's the only way you ever discover who you really are, and it's supposed to make you marvelously detached.

Almost enough to make you forget how your raven-haired, brilliant, s.e.xy mate packed it in one New Year's Eve twenty

months past . . . when you called late from the office, again . . .

after declaring that that was the G.o.ddam last straw and apparently the only thing you could find worthy of undivided attention came printed on G.o.ddam computer paper and she was G.o.ddam sick of it--which she demonstrated the next day by slamming the door on her way out.

Add to which, she used my momentary disorientation to get custody of Amy. So while I was battling corporate Goliaths, I let her walk off with the only thing I would have given my life for. The more time went by, the more I wanted to kick myself. Alex Katz (of Walton, Halliday, and Katz--now minus the Walton) read the custody agreement the day after I signed it, sighed, glared over his smudgy half-lenses, and announced that this kind of unconditional surrender should only be signed on the decks of battleships. What did he have, a law partner or a f.u.c.king schlemiel?

He was right, for all the wrong reasons. Not long after, I cashed in my piece of the firm and went independent. Win or lose, it's best to sort things out on your own. I was then forty- three, six one, and weighed in at an even one eighty. There were a few lines on the face and several more on the psyche, but the sandy hair was mostly intact, and I could still swim a couple of miles if absolutely essential. Maybe there was still time for a new start. Part of that therapy was going to be our trip.

Perhaps I should also add that I'd had a brief "rebound" fling, for what it was worth. The lady was Donna Austen, a name you'll recognize as belonging to that irrepressibly cheerful "Personalities!" host on what Channel Eight likes to term its Evening News. She'd called about a segment on the subject of the cosmetics company takeover, then very much in the local press, and I'd said fine. She ended up downtown, and soon thereafter we became an item. She was the closest I'd had to a girlfriend, and at that it was mostly an on-again, off-again thing-- which terminated in an event reminiscent of the Hindenburg's last flight. In the aftermath I went back to chatting with Amy every day on the phone, putting together stock buyback packages, and collecting j.a.panese swords.

Anyway, while the cab waited for a light, worn-out wipers squeaking, I fumbled around in my coat pocket and extracted the _meishi_, the business card, one side in English, the other j.a.panese, that had been included with Noda's letter. He'd

personalized it with a handwritten note on the side with English print.

Now, I'd kept track of the new j.a.panese investment heavies in town-- Nomura, Daiwa, Nikko, Sumitomo--since you never know when a corporation might need some fast liquidity. They were starting to play hardball, and these days (with all that cheap money back home) they would underbid a nine-figure financing deal before Drexel Burnham could spell "junk bond." But Nippon, Inc.? Never heard of the outfit.

Well, I thought, you'll know the story soon enough. The driver had just hung a right on Fifty-seventh and was headed east toward York Avenue.

I'd called that afternoon to lower the reserve on one of my lots and had been told that because of some union squabble the preview would continue till just before the sale, now scheduled to kick off at eight- thirty. It wasn't quite seven yet, so we would have at least an hour to run through my list of prospective buildings.

As the cab pulled up next to the chaste gla.s.s awning, I took a deep breath, shoved a ten through the Plexiglas panel between the seats, and stepped out. While the battered Checker (lamented remnant of a vanishing species) squealed into the dark, I unb.u.t.toned my overcoat and headed up the steps. A few grim-faced patrons milled here and there in the lobby, but n.o.body looked familiar. There was even a new girl at the desk by the stairs, ash blond and tasteful smoked pearls, pure Bryn Mawr art history. A cla.s.s act, Sotheby's.

It appeared that most of the j.a.panese crowd was already upstairs, undoubtedly meditating on their bids with the meticulous precision of the Orient. I was headed up the wide, granite steps myself when I decided to check out the downstairs one last time.

Hold on, could be there's a possibility. Waiting over by the coat check, thumbing the catalog, was a distinguished-looking guy, retirement age, wearing a light, charcoal suit. Italian. Unlike the usual j.a.panese businessmen, he clearly didn't a.s.sume he had to dress like an undertaker and keep a low profile. No, probably just some Mitsubishi board member thinking to diversify his portfolio with a few _objets d'art_.

Abruptly he glanced up, smiled, and headed my way. I realized I'd been recognized.

"Mr. Walton, how good of you to come." After a quick bow he produced his card, a formality that totally ignored the fact he'd already sent me one. As convention required, I held it in my left hand and studied it anew while I accepted his hearty American handshake. "It's a pleasure to meet you. At last."

At last?

I let that puzzler pa.s.s and handed over a card of my own, which he held politely throughout our opening ritual, then pocketed.

Noda had a mane of silver hair sculptured around a lean, tan face, and he looked to be somewhere between sixty and seventy. Though his dark eyes were caught in a web of wrinkles that bespoke his years, they had a sparkle of raw energy. He moved with an easy poise, and the initial impression was that of a man eminently self-possessed. He had that st.u.r.dy, no-nonsense a.s.surance usually reserved for airline pilots. If you had to entrust somebody with your wife, or your life savings, this man would be your pick.