1980s/Business school case study/Family Business/History of Patent Annuities

MENTOR WANTED!

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The storied history of Olcott International has been covered in detail over the last year and a half.

As you may recall from my post “THE END OF AN ERA,” the company had its origins when the proposed merger between the British patent leader Marks & Clerk and Bernard Olcott & Associates fell apart in 1969.  The partners of the former founded Computer Patent Annuities in St. Helier, Jersey, Channel Islands. My Dad founded Olcott International in Weehawken, New Jersey.  So it was henceforth a battle of the Jerseys.  Think Bayonne versus Bermuda.  (Rodney Dangerfield once boasted of his summer house in the former).

jerseys

Remember how I wrote that it was Dad’s idea that their proposed joint venture be based in the Channel Islands (to avoid Inland Revenue’s excessive tax rates in the late 1960s)?  The aforementioned partners of Marks & Clerk relocated to picturesque St. Helier setting up shop there (to reduce their tax bite).  One of the partners, Ray Chinnery, has a son my age, Martin who informed me that, thanks to my Father, he grew up in Jersey, not his native Birmingham (England, not Alabama).  Rock fever notwithstanding, Martin still lives and works there!

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1980s/1990s/Business school case study/Family/Family Business/History of Patent Annuities/Parents/Real wife

BUSINESS PARTNERS

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The events in my last post, “TWO RABBITS, ONE DEAD,” recount the events of one bleak day in January 1995.

Everyone is entitled to a bad day once in a while.  If those events of 21 years ago had represented just one isolated blip in the story of a triumphal family saga, it wouldn’t have been that big of a deal.

Sadly, it wasn’t just a one-off but was part of a frequently distressing pattern.

It didn’t start off that way, of course, when I began my career at Olcott International a different January a dozen years before that, in 1983.

As I have written in various posts like “SOMETHING ABOUT DAD, PARTS 1 AND 2” and “HEARTBREAKER,” Dad wanted me to join the family business even though various warning signs made me ambivalent toward the idea.  After all, you should always know who your business partners are.  If they’re your parents, you don’t need to do a background check to find out.

As an example, I can perform due diligence in my case by asking a few questions:

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1980s/1990s/Business school case study/Family Business/History of Patent Annuities/Parents

TWO RABBITS, ONE DEAD

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So after glory on trips away, say in London as described last week in my post “ODD THINGS ABOUT TRIPS,” what was life like back in the office in Weehawken?

The following story sums it up.

One day in January¹ 1995, my Dad and Olcott International CEO Bernard Olcott came down to the second floor, where I was working at the time and insisted to Steve², the lead computer programmer that a granted European Patent be placed in a list (actually, a test database) of payable items as an “EPO item.”  Now, please bear with me on the details that follow; they are important.

The problem was, once a European patent is granted and “goes national,” it is no longer payable as an “EPO item” – it becomes payable at each national patent office, like UK, France, or Germany as a British, French, German item or patent.  Only as a pending application in the European Patent Office is it payable as an “EPO item.”

Just the kind of distinction Dad loved to make.  He prided himself immensely on his profound, perhaps photographic, recall of such details for patent renewals among countries.  After all, he wrote the book on patent renewals!

In this case, though, he was oddly off.  It was unusual, bordering on the weird.

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1980s/1990s/Business school case study/Family Business/History of Patent Annuities

ODD THINGS ABOUT TRIPS

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All pictures of holes in hand, Bobby drove us back to Kansas City International Airport for our flight back to Newark.  I remember looking out the window on our descent, seeing only white.  Suddenly, below me, the New Jersey Turnpike appeared in patches out of the murk, looking cloudy, grayish, and flakey.  It was snowing, and it looked like it had been at it for a while.  We were so low over the white roadway, I thought we were going to land on it.

From brown Kansas to white New Jersey.  To be sure it had been a kind of odd-ball trip.  Going to Kansas to take pictures of holes.  More typically, my business trips back then took me to London, which was a very different kind of experience.  For one thing, England (the tourist web site has a page for “things to do on a rainy day.”) is a very “wet” country, and I developed a liking for pints hand drawn from the draught.  No need to buy a membership – everyone was a member!

This post is about England.

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Family Business/Investment Schemes

THE HOLEY LAND, PART 2

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Meanwhile, back in Kansas…

After barking orders to Luke and Roy to fix whatever was wrong with the non-working pump jack, Bobby Edwards proceeded to drive me around southeastern Kansas to the other leases.  As it was a half hour to 45 minutes to any of the others, Bobby and me spent the rest of the week in the truck driving around the stark landscape.

Typically, we would arrive at some desolate farmland, turn off the paved road, and then drive around farm roads for a while, with Bobby looking here and there for familiar markers.  Occasionally, we were at risk for getting stuck in the mud in the middle of nowhere.  If the truck started to slip and spin, Bobby would mutter “cocksucker!” in his raspy voice, jam the truck into reverse, slam back into drive, and rock the truck out of the mud.  The mud, thus insulted, would always relent.  (And I survived to write the tale!)

Then, suddenly, Bobby would say, “We’re here!” put the truck in park, and lurch out of the truck.  I would study the outside, quizzically.  Just empty fields, maybe a tree line marking a boundary.  Then I would hop out and walk around the truck to see Bobby pointing downwards at a hole in the ground.  There would be an eight inch well casing or pipe extending several inches up off the ground. Looking down the casing, it would be just a dark hole running towards the center of the earth; the average depth of oil wells in this area would run maybe 1,000 feet.  Bobby would explain how, to start with, these abandoned holes had to be cleaned out due to “kids throwing stones and bottles down them.”  Once cleared and re-drilled to find the oil reservoir, only then could a pump jack and piping be set up to bring up, hopefully, as the Beverly Hillbillies would say, the “black gold.”

The extraction process had not been started for the first hole.  Nor for about 39 others.

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1990s/Investment Schemes

THE HOLEY LAND, PART 1

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Above photo of Kansas highway courtesy of Erik Trautman. 

The following Monday morning, I got up a little earlier than usual in my apartment in Yorkville, Manhattan.  I put on a pair of jeans and my Timberland boots as this here urban cowboy was going to work on the oil field for the week.  Well ok, maybe not exactly.  I was really going to be a tag-along on the oil patch.  To be on the heels of the world-famous Jewish cowboy and oil rustler, Bobby Edwards!

I grabbed a cab and directed the driver to Bobby’s place on East 86th Street.  As we pulled up to the awning on Bobby’s building, he was, of course, nowhere to be seen.  We waited as the doorman called up.  “Mr. Edwards will be right down.”  I wondered if everyone’s workweek on the oil patch started this way.

After a few moments, Bobby arrived at the car, huffing and puffing with his suitcase.  “LaGuardia Airport for TWA Airlines, please,” he barked to the driver in his raspy voice as he staggered into the cab.  We were on our way to an 8AM flight to Kansas City International Airport.  “Wait ‘til you see Kansas, kid,” he laughed and coughed.  “Looks just like 86th Street.”

Doesn’t everywhere?

Once at the Central Terminal (which, at LaGuardia, is Terminal B, not C: go figure), I followed Bobby to the check-in counter at our gate.  He slouched up against it and whipped out a money clip.  On one side were several Gold and Platinum ‘Elite’ TWA Frequent Flyer cards.  On the other side were several Benjis ($100 bills).  Bobby winked at me as he addressed the check-in agent while clicking the clip on the desk.  “Hi Linda, how are you this morning,” he said as if he had played doctor with Linda in kindergarten.

benji

“Fine, Mr. Edwards.  How are you?” she said pleasantly if nonchalantly as the printer spat out two boarding passes.  After handing him our seat assignments, we soon took our coach places towards the rear of the empty aircraft.

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1980s/1990s/Family Business/Investment Schemes

CHIGGERS AND STRIPPERS

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Above: Stripper wells, courtesy of http://www.energyindustryphotos.com/texas_oil_well_photos.htm

East 86th Street figures prominently in The Bernard Olcott Story.  First, my Dad lived on the corner of Fifth Avenue with his second wife and baby, James.  Several years later, he moved further east to Second where he lived with his third wife and baby, Victoria.  (The aforementioned son lived with this growing and eclectic family during summers).

Had you kept going further east, you would arrive at the residence of one Robert Edwards, otherwise known as “Bobby.”  Whereas other residents of Yorkville typically wore suits during the workday, Bobby always looked like he was going to a rodeo.

As introduced in last week’s story, “MR. SWAGGER’S PUMP AND DUMP,” Bobby was probably the most colorful character ever to have enjoyed the select distinction of “Business Partner of Bernard Olcott.”

By the early 1980s, Dad already had experience in investing in oil and gas exploration.  It was one of the best tax shelters in that the entire investment could be written off as an “intangible drilling” deduction.  Then, later on, after you would have drilled for oil, found some (there are no guarantees), extracted it via a pump jack into a tank, and finally have Enron come buy it from you, you could claim it as income at reduced capital gains rate.

Potential problems?  Of course there is always the possibility of a fly in the ointment.

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1980s/Business school case study/Family Business

MR. SWAGGER’S PUMP AND DUMP

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Although my office was on the lowest of three levels, during that first year on the job, I would occasionally hear strange noises filtering down from the top floor. Often these indistinct sounds would mimic fanciful imagery like, I kid you not, cattle rustling with an occasional hoof stomp. Other times, the herd would be in full stampede. A cowboy could be heard running after them, shouting and hacking from a bad cough.

Quick reality check: the office was in Weehawken, New Jersey with a glorious view of the Manhattan skyline and the giant double helix of the Lincoln Tunnel. The latter emitted the roar of machinery, the giant soul crusher as featured in my post “THE NIGHT IS DARK AND FULL OF TERRORS.” It was very far from Marlboro country, campfires, and cowboys yodeling ah-hee-ho!”

The bumps, shouts, and herd noises were discordant and weird.  What the fuck was going on up there? Sometimes, I would climb the stairs to snoop around. At first, doors would be closed as soon as I reached the top. Sometimes, I could see out of the corner of my eye,  through a partially open door, something resembling a nose, or maybe some wrinkled skin. It was as if the stable master had asked the illegal stallion to settle down in his stall so as to hide from a passerby.

Nose and wrinkled skin? Was Dad hiding an elephant from me? Wouldn’t it fall through the floor of our ramshackle building?

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1980s/Business school case study/Family Business/Foreign Adventure/Investment Schemes

PANOPLY OF SWAGGER

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Pictured above, beautiful Stockholm.

Last week in my post “OF GIANTS AND DWARFS” I took you, the dear reader, back to 1966 to meet Lenny the check-forger.  But Lenny turned out to be a mere piker.  Compare him to Herby Fischer¹ – the stockbroker from American Express who churned Dad for over a million in the late 1980s.  Now that guy had a plunger.  A big one.

Strange thing was, after Dad took him to court and won, inexplicably, seeking no one’s advice but his own, Dad reinvested with Herby!  Everyone can get taken once.  But to go back to the same guy afterwards?

But Herby was ultimately not the biggest plunderer.  More about him later.

Neither gentleman made it to the letterhead of Olcott International, my employer as of 1983.  Based on the amount of cash they carried away, however, they should have — at least as cost centers.

Steven Sites¹, however, did make the letterhead.  He was on the famed pantheon of “Associates” thereon.  That meant he was a BIG, the real deal.

Soon after I started my first job, I mean, not simply a first job but one at the family business with Bernard Olcott as CEO, efficiency expert, attorney at law, certified engineer in three states, computer consultant, construction foreman, automotive engine and air conditioner mastermind, ladies’ man, and unfortunately, easy mark, a pudgy man waddled over to my desk on the lower level.  He extended his hand.  “I’m Stevie Sites,” he said.  I recognized the name immediately and stood up.  A giant had graced my stoop!

I told him that I recognized his name from the letterhead and asked him about his accounts.  I had no idea what he was about to tell me.

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Family Business/History of Patent Annuities/Horatio Alger/Nostalgic New York

OF GIANTS AND DWARFS

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Special note: Today is Dad’s 98th birthday!

As related in my last two posts, “THE NIGHT IS DARK AND FULL OF TERRORS,” and “FIRST TEST,” my full-time entry into the family business was marked by both gloom and doom on one hand, and affirmation on the other.

You could say it was a study of extremes. Like my Dad.

The location of the office was, well, anything but standard.  It was close to my home in Manhattan — five miles as the crow flies.  Just across the river, the first stop.

Yet, it was hideous from the point of view of public transportation.  Two subway lines to Times Square; a bus from the New Jersey Embassy (otherwise known as the Port Authority Bus Terminal); and then a quarter mile uphill slog.  This was a tough commute of one hour’s duration, each way.  It was the Goddamn bus that took the longest, inching its way through hellacious traffic to and from the Lincoln Tunnel.  If I could have walked on water, I could have hoofed the whole thing in just about the same amount of time.

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