To Zurich
So on Monday, December 26th, after a taxi to Heathrow, and an early Swissair flight, Owen and I checked into the Baur au Lac Hotel, where I had earlier reserved a two-room suite. Switzerland’s weather, which can be disappointing in the extreme for summer visitors, is often at it best during winter. For us Zurich was dry, with even some weak winter sunlight. The lake view from this fine old hostelry is quite attractive. We both explored the Old Town before dinner then retired early.
Now anticipating my meeting with the recalcitrant Dr. Lauder, the next morning I telephoned his office to confirm our 10:00 a.m. appointment. Then with a suggestion to Owen that he go off and explore the town of Lucerne, and to ask the concierge where to catch the train, I promised to meet him back at the hotel for lunch. Lauder greeted me at his office with stiff reserve. In his late fifties, well tailored and manicured, a stereotypical Swiss businessman - who also had investments in Sao Paulo, Brazil. He had been advised that I was a senior officer of Union Bank and that I wished to discuss the problem of the Penn Central notes. Polite but haughty indifference would best describe his attitude as he bade me take a seat.
With concise brevity I explained the current situation and how, "if the notes are not restructured the company will go into bankruptcy and many innocent investors --- widows and children --- will suffer." His response was immediate and direct. "I really don't care. I was lied to and cheated by Pressprich and the Penn Central. So let them all go to hell."
I was grateful that his English was excellent because my circa WWII German was limited. I outlined how Union Bank had invested $3,000,000 in the same notes and that I would sell our notes today for $300,000 (if I could find a buyer). But if he were prepared to go along with the restructuring, I was authorized to pay him $150,000 and he could keep his restructured notes and the free warrants, which were sure to be worth a lot of money in the future.
Aware I could always offer to pay up to 100 cents on the dollar, I first wanted to get a feeling of how tough a negotiator he was. I quickly found out. "You can pay me 100% for my position. I am still not interested. I was lied to and cheated, and they will just have to suffer.”
So far he was proving obdurate but this was still Round One. The art of negotiation requires time before the little windows of opportunity appear. "Do think, Dr. Lauder, of the thousands of people who will be hurt if the company goes under."
"Ich interessiere mich nicht für sie." was his response, which I took to mean, “I don’t care about them.”
Now it was almost one o'clock, when I was due to return to the hotel to meet Owen for lunch. With a sad smile and a brief shrug of resignation I indicated I was prepared to leave.
“Dr. Lauder, this is my first trip to Zurich and I have my son with me. We are at the Baur au Lac and I wonder if you would consider joining us for dinner this evening? Your wife too, of course, if she is with you.”
Lauder considered this request. “You are staying at my favorite hotel, you know.” Perhaps confident all business between us was now over he finally acceded that he and Frau Lauder would indeed be able to dine with us at 8 o'clock. With an air of quiet resignation I departed. At least another meeting had been established.
At lunch, Owen described his trip to Lucerne; how helpful the concierge had been; that his still limited French had sufficed in this German speaking canton. I was mindful how this nice-looking boy, tall for his age, had a quiet maturity in advance of his eleven years. Then I described my morning meeting. During the flight over I’d briefed him on what I was here to accomplish. This evening’s dinner with the Lauders, I explained, would be an opportunity to show them we were both decent, right-minded Americans, so “just be yourself, Owen.”
That afternoon I needed to visit the bank where the funds had been deposited. Not that for a moment I doubted I would be able to withdraw them; I just wanted to be certain. Directing Owen to ask the concierge for suggestions on what he could do until we met again at 4 o’clock, I too availed myself of the concierge for directions. He suggested a taxi. Next I telephoned the bank to inform them I would be visiting that afternoon. I was told, “Zwei dreizig Uhr, mit Herrn Schmidt, danke.”
Swiss banks are unique; one doesn’t casually amble into them from the street as one can in America. A porter greets you outside, to whom you state your purpose, the door is held open, and you are then ushered inside to a small conference room. At this bank I was taken to a miniscule sitting room, replete with over-stuffed chairs and a table with pots of both coffee and tea.
A few minutes passed before Herrn Schmidt joined me. He handed me a sheet of blank paper upon which I was asked to write the number of “my” account. Leaving the room for a few moments he then returned with another sheet of paper.
This showed the present balance in the account. “Would you like to make a withdrawal?” he asked. “Not at this time,” I replied. “Perhaps during the next few days.”
Back at the hotel I met Owen and we called London to find out how Mom and Erin were faring then opted for a nap before the evening ahead. Refreshed, Owen teased me that no matter how stern the Lauder’s might prove as dinner companions, nothing would spoil his appetite tonight.
Waiting near the entrance to the hotel’s Restaurant Francais, I reflected on my chances of getting Lauder to sign off on the exchange given his opinion of the Penn Central and its methods. Before I was able to foster any likely strategies, he was before us, introducing his wife. Although they would be our guests at dinner it was immediately apparent who were the principles in this establishment. The Maitre d’hotel stepped forward to greet us:
“Doktor, Frau Lauder, ein Vergnugen! Ihr ublicher Apfellkuchen heute nacht?”
I had caught the word “Apfellkuchen” and Doctor Lauder explained that he and his wife always ordered their own special apple cake.
Lauder not only knew the menu by heart but the wine list as well. I insisted that the dinner would be on my expense account, but adroitly deferred to his expertise by asking him to assist me select something fine from the Sommelier.
At a table for four Frau Lauder sat opposite me, with Owen on my right and Lauder on my left.
Light conversation began between us, all in a pleasantly inconsequential vein. Since their English was excellent the exchanges were easy and swift. The insouciant Herr Doktor, playing ‘mein host,’ suggested Lake Fish for starters followed by a restaurant specialty, Wild Boar in wine sauce. The best Swiss wines accompanied each course.
As the evening progressed I initiated a quiet side conver- sation with Lauder, asking him about his business interests in Brazil. With one ear, I absorbed some of the conversation between Frau Lauder and Owen, discerning a few exchanges in French. She inquired about his school subjects, about his mother and sister in London, what he thought of Zurich. She seemed surprised that he was only eleven, and that he actually enjoyed school and reading books. It seemed she had expected American children to be somewhat ill mannered and lacking all interest in Europe.
When we reached the cheese course, I related a story of an earlier trip I had taken to Europe as a typical American businessman, spending two days in Paris, two in Rome, two in Stockholm, then back to the states. Sud Aviation’s head had invited me to lunch at a famous restaurant in the Bois de Boulogne. From course-to-course my host talked about how beautiful the trees were at this time of year, the renovations at the Tuileries, and everything but business, which I was most eager to do. Finally I was driven to say, “Monsieur Dalliet, don’t the French ever talk business at lunch?” He replied, “Oui, Monsieur Prell, but only between the fruit and the cheese.”
“So is it permissible now, Doctor Lauder, for me to spend a few minutes talking business – between the cheese and your special Apfellkuchen?” That was when the crisis ensued. He became very upset, expounding in an agitated voice how he was lied to, cheated and wronged by all. He would not agree to any proposal I might make and he certainly didn’t want to hear about the poor widows who would lose their investment. It took Frau Lauder's inter- cession to quiet his tirade.
Before the evening ended, I overheard Frau Lauder ask Owen if he had purchased something to take back to his mother in London. She then suggested collecting him from the Baur au Lac the next morning to take him shopping, adding, “Remember to ask your father for his credit card.”
Returning to our room later, I thanked Owen for his contribution to the evening and for entertaining Frau Lauder. While it certainly did not look as though the trip would be successful I was still happy we had made this excursion together.