The next generation of brothers and sisters growing up in America takes different directions. Michael the youngest son forms M. Nash Investments to invest and put deals together.
Michael's story involves corporate takeovers, proxy battles, legal issues, Court room and Board room intrigue and drama.
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The Dream MasterBaghdad to Wallstreet The Rise of a Hollywood Mogul
By Joseph Mazin
AuthorHouseCopyright © 2011 Joseph Mazin
All right reserved.
Chapter OneIt was a wonderful and lavish party, a celebration of yet another triumph for Michael Nash in the corporate world. It was finally his—he had done it. All the months of careful strategy planning had borne fruit. The takeover of World Wide Communications was accomplished, and Michael was now officially its chief executive and chairman of the board.
Michael had always desired and dreamed of being involved in an enterprise in what he considered the "glamour fields." Now, with the multilevel operations and numerous subsidiaries of World Wide Communications, he would affect not merely one glamorous field—but many! He, Michael, would produce and distribute theatrical productions, television shows, and motion picture films; he would be a major influence in the music and record industries, character merchandising, toy manufacturing, book and magazine publishing—he'd even operate a chain of restaurants! He would also develop high-quality resort, residential, and business communities. This certainly was reason to celebrate!
He laughed, he toasted, and he danced. His wife and best friend, Rebecca, was there by his side as he congratulated himself and the officers and deputies of his organization for a job well done. With this acquisition, his empire was truly a vast conglomerate. Michael keenly felt the thrill of reaching a goal, of seeing his plan all the way through from its very conception to the final takeover of World Wide Communications.
It was in the fall of 1990 many celebrities were in attendance—political and sports figures, including Charlton Heston, Jack Lemmon, Tony Curtis, Barbara Streisand, Wilt Chamberlain, a former governor of California, Jerry Brown, and former president of the United States, Ronald Reagan with his wife, Nancy. An abundance of security personnel guarded the festivities.
The party was still in full swing at 1 a.m., but Michael needed time to himself, a moment to savor this night of victory—and to think. He was too excited, however, just to go home and retire. He knew where he'd go—the perfect place—his office on the seventh floor of the World Wide Studios Tower. It was both a place of aggressive production of ideas, strategies, plans, action, and also a retreat—ideal for moments, like now, where he could savor the quiet around him. He lost track of time as he sat there, on his leather chair, looking out the window, lost in thought. But now he saw city lights flicker off, one by one.
Dawn. Where had the night gone? Time seemed to have slipped away from Michael, as it often did when he gave into one of his reveries. He loved to think ... to use his mind ... to create ideas and to put them into action. He was good at it and he knew it. He had just proved himself again to the entire corporate community. He was liked and respected. Some called him the Ajax Knight, the Champion of the Shareholders. But most knew him by his nickname, the Wolf of Wall Street.
Michael smiled to himself as his mind drifted back to the time, many years ago, when he had been called the Wolf in a mocking, sarcastic way. It had been meant to put him down in his place, to diminish him, make him feel insignificant. Franklin Burger, the president of Franklin D. Burger & Company, an investment-banking firm, was the one who had dubbed Michael "the Wolf of Wall Street," never dreaming that Michael, indeed, would, one day, become a power to be reckoned with. To Franklin, the sixty-five-year–old seasoned and accomplished businessman, Michael, at twenty, was just a boy—a mere child.
The late 1960s had marked an era in stock market history with stocks moving to new heights, stirring excitement among investors and making the environment ripe and conducive for the success of new issues. Many private companies were being brought public by investment baking firms such as Franklin D. Burger & Company through initial public offerings (IPO's).
IPO fever continued to spill over into the early 1970s. Stock prices of these newly minted public companies sky rocketed sometimes doubling and tripling in a single day. Michael Nash had desired to be part of this exciting niche in the stock market.
He was only twenty years old then, freshly discharged from the US Navy after two years of active duty. He had served aboard a supply ship stationed off the coast of Vietnam as a disbursing clerk, a job where he had gained expertise in accounting and learned to manage a payroll.
When Michael was out of the Navy, a civilian again in need of employment, he'd pounded the pavement for a while, writing numerous resumes and going on interviews, before he landed a position with a car insurance company as an underwriter. He soon settled into the routine: up at six, fighting traffic at seven, in the office by eight, poring over files all day. No, this was not Michael's style. He felt stifled and stagnant—not that he did not do an excellent job of evaluating applicants and making decisions on whether to issue automobile insurance—he did.
He was well liked and respected by his coworkers and the Auto Port Insurance Company was not a bad place to work. The problem was that the job did not even begin to tap Michael's vast creative ability and mental capacity. He realized that the stock market and high finance had been his first love. Even in high school, he had not let a day go by without reading the Wall Street Journal or some other financial publication. He had also visited several brokerage firms, watching the action live as the ticker tapes were rolling—and wishing to be part of it.
Well, his job as an insurance underwriter did provide him with some of the means to invest in the stock market. He needed that, even on a small scale, to make his work at the insurance company bearable. Even as a young man, he was more than willing to put his small savings on the line and take the risks, just for the chance of reaping the rewards that the stock market might bring. There were those who called him a gambler, but Michael, and people close to him who truly knew him, did not see it that way. Gamblers taunted their luck, equating the stock market with the roll of the dice, making investments on the basis of a hot tip overheard at a bar or social gathering. To Michael Nash, the workings—the mechanics and the behavior—of the stock market were a science to be studied with patience and care. He was not just a chartist or market technician; he relied heavily on fundamentals. Michael Nash had a great deal of faith in the human factor too. He believed that the ability, dedication, and even the charisma of management could have a profound influence on the behavior of the stock of a given company, as well as its work force. The general economy, public interest, and type of enterprise or industry were important factors too.
Soon, all of Michael's energies after work hours went into studying the new-issue market. Michael remembered a particular June day to be particularly pleasant, sunny, smog-less, with a temperature in the low seventies. He had had a good feeling that day, as he'd decided to stop by the Franklin D. Burger brokerage firm to see what was up, to talk with the brokers, and to peruse the most recent literature.
"Good afternoon, Michael, what brings you our way this time?" asked Mark Hemmings, the young rookie broker who usually stayed in the office after hours.
"Hi, Mark, got any interesting new issues coming up?" Michael had responded with a smile.
"As a matter of fact, yes, there is one. I read the prospectus on it just a little while ago."
"What's special about this one, Mark?"
"Well, for one, the dilution factor is very small; it's coming out at a little over book value—which is unlike some of the others we've seen recently."
"What is the insider interest?" Michael asked, his attention and curiosity rising.
"The insider group consists of twenty-one people with shares divided more or less evenly among them—each director has 1 to 3 percent of the stock."
Great! No single large, inside shareholder. That meant the outside shareholders would get a good break, thought Michael excitedly.
"What's the name of this company?" asked Michael.
"Allbrite Corporation," responded the young broker.
"Mark, may I take a copy of the prospectus with me?"
Michael could hardly contain himself as his imagination, as usual in these circumstances, began to race ahead. If Michael liked the prospectus as much as he thought he would, he could put enough money together for 2 or even 3 percent! Since this was a small company, that percentage might even afford him a seat on the board of directors! Imagine that ... and maybe then ... even more influence!
Michael did not know it then, but that day was a turning point in his life. He would meet Brian Steele, a rising young attorney, who became Michael's lifelong friend, and together they would rise to fame and fortune.
As a young boy of ten or eleven, Michael's favorite pastime had been going to the movies. He saw them all on the silver screen: Friendly Persuasion, Casablanca, Some like it Hot with Marilyn Monroe and Tony Curtis, Hollywood or Bust with Jerry Lewis and Dean Martin, The Ten Commandments with Charlton Heston and Yul Brynner, Ben Hur, and many others. That in itself, a boy going to the movies, wasn't too unusual. But with Michael it was different—he would daydream after seeing a film; he would go behind the scenes and speculate on the actualization of a motion picture: the production, the money, the casting. And he dreamed of someday, somehow being a part of the movie-making world.
Michael's attention had turned to the stock market as he watched his father, Samson Nash, make investments in stocks. Michael knew that someday, when he had enough money and the right opportunity presented itself, he, too, would buy stocks. He might even invest in a motion picture company or studio.
Many changes occurred in Michael's life during his boyhood. For one, he and his family moved from New York to Los Angeles. Michael's father, Samson, had a hard time financially and could not make ends meet. The family had moved several times and finally settled into a very small, two bedroom, one-bath apartment in Hollywood. Michael's parents had slept in one of the bedrooms, while his sisters took the other bedroom. Michael and his brother Abe slept in the living room.
As a senior in high school, Michael made a stock purchase in a motion picture company. Even though he did not realize it at the time, it was his first successful purchase—a thousand shares of National Artists for $1.50 per share. The price of his stock would eventually rise to $18 a share. There. Michael was now a part of the motion picture industry as a shareholder. National Artists was, in comparison, a tiny company but definitely involved in movie production. Even though the company's role in the motion picture industry was small, as it only released a few films, the films themselves were giants—box office gold mines: Man and a Woman, Friendly Persuasion that Michael saw himself, El Sid, 55 Days from Peking, The Last Summer, and, in later years, Cabaret, Papillion, with such stars as Gary Cooper, Frank Sinatra, Steve McQueen, Liza Minnelli. With the success of the films, Michael's stock began to rise. Michael held on to his stock all through his years of college and all through the time he spent in the United States Navy on active duty.
To get capital, Michael sold his stock when it hit $18. He followed the progress of the company, though, and watched the stock begin to topple down. Michael bought the stock again. He became disenchanted with the management, however, and that disappointment was shared by other shareholders. There was gross negligence. Although a lot of money was being made on the successful motion pictures, the profits seemed to evaporate with management's wild spending habits and exorbitant salaries. Michael knew some restructuring needed to be done if National Artists were to recover and develop into a great entertainment empire. He launched a campaign against management on behalf of the common shareholders in Daily Variety, an entertainment trade publication. Because of his efforts, an article appeared stating:
"A number of National Artists common shareholders, representing a large number of shares, are currently waging a campaign to hold a special shareholders meeting. The purpose of the meeting is to return control of the company to its common shareholders."
The article went on to say: "Because the company still owes the Internal Revenue Service monies due for fiscal years 1949-1957, it has been prohibited from paying out preferred dividends until the IRS debt is cleared. A lump sum estimated at about $800,000 would have to be drawn from company coffers before voting control would revert to common shareholders. The effort to revert control back to the common shareholders was spearheaded by Michael Nash. This coincided with a recent drop in the company's American Stock Exchange Listing. Almost every day since then, the stock has fallen at least 1/8 and it hit another low yesterday ..."
As Michael Nash leafed through Daily Variety a month later, he came across another article, headlined, "NA Stockholders Suit Alleges Illegal Election, Conspiracy." It seemed that a young attorney and shareholder of NA had filed suit against the company's chief executive and members of the board of directors. Brian Steele, the attorney, on behalf of himself and other stockholders charged that the board of directors of National Artists Pictures Corporation was elected illegally and that directors had used their authority improperly, causing a very real possibility of financial chaos.
The article further stated, "the suit charged that defendants had deliberately refused to pay debt owed to the IRS and dividends to preferred stockholders for the sole reason of perpetuating their control of the company. Mr. Steele, in his complaint, asked that the illegal election of the board be ruled null and void and that a trustee be immediately appointed to supervise a new election and such trustee remain in control of firm until a new board is elected ..."
As Michael Nash became aware of Brian Steele through the Daily Variety article on NA, so, too had Brian Steele become aware of Michael Nash by reading the first article in Variety regarding the National Artists matter. Michael was intrigued with Brian and decided to contact him. He looked up the young attorney in the phone book and dialed.
"Hello," said a man's voice.
"This is Michael Nash. Have I reached the residence of Brian Steele?"
"This is his parents' house but you can reach Brian at his apartment. The number is 257-4968."
"Thank you very much. Good-bye."
A couple of days later, Michael reached Brian at the number given to him by Brian's father. The two men, Michael and Brian, took to each other immediately. That was the beginning of a lifelong friendship that enabled them to join forces to work on projects together.
In the meantime, Albert Zeller, the president and chief executive of National Artists, was puzzled and slightly annoyed at the lawsuit. It was a nuisance he had little patience for; on the other hand, he really didn't know what to think of those two troublemakers he'd read about in Variety. How strong were they? They certainly weren't significant as shareholders—they didn't own too many shares. But what was behind this suit? Were these two men influential in the film industry? Thinking about this matter made Al slightly uneasy, and finally he decided to take a trip to Los Angeles. After all, it had been some time since he had felt the California sunshine. He told himself he needed a vacation. Four days later, Albert Zeller and his entourage of attorneys and advisors checked into the Beverly Hills Hotel in Beverly Hills, California.
At 8 a.m., two days following Al's arrival, George Salzman, the manager of the West Coast office of National Artists, received a call. When George realized who was on the other end of the phone, he breathed a word of thanks to fate, which took credit for his being in the office at this early hour. He usually arrived at a more leisurely 10:30.
Excerpted from The Dream Master by Joseph Mazin Copyright © 2011 by Joseph Mazin. Excerpted by permission of AuthorHouse. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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