Divorced the CEO, Chose His Rival

Chapter 009 — The Inquiry from Sorrell

Elias Sorrell had rejected three investment proposals before breakfast, but the fourth made him put down his coffee.

Whitlock Industries wanted his firm to consider financing alternatives following an acquisition that was already performing substantially below expectations.

That alone wasn't unusual. Sorrell Strategic Capital regularly assessed businesses whose ambitious investments had produced disappointing results.

What interested him was the name on the acquisition's financial risk certification.

Nadia Ellery.

He had encountered her work before, although they'd never met. Several executives he'd dealt with over the years had spoken favourably of the restructuring strategies that helped Whitlock recover from its earlier financial difficulties.

Adrian Whitlock usually received the public recognition.

The people who understood the underlying work tended to mention his wife.

Former wife, Elias corrected himself.

Their divorce had recently become final.

He returned his attention to the document.

The certification indicated that Bellwether Industrial Services had satisfied Whitlock's internal investment-risk requirements. It appeared to carry Nadia's professional approval, although Elias was viewing an assembled PDF rather than the original authorization records.

He opened the acquisition's supporting financial summary.

Something about the conclusion bothered him.

A knock sounded at his door.

"Come in."

Reese Navarro entered with a tablet and the expression of a man who had already encountered several problems before nine.

"Tell me you're looking at Whitlock," Reese said.

"I am."

"Then you'll appreciate knowing their board approved the preliminary review because they want independent financing alternatives. Adrian doesn't appear particularly enthusiastic about involving us."

"I'd be disappointed if he were."

Reese took the chair opposite him.

"There's a confidentiality agreement in place. Legal has cleared the initial package for our team."

"Good. Have you examined the acquisition assumptions?"

"Enough to understand why the board is nervous."

Elias turned his monitor toward him.

"Then explain something."

Reese leaned forward.

The financial summary projected substantial growth from Bellwether's customer relationships. Additional revenue from anticipated contract expansions formed a significant part of the acquisition's justification.

However, the supporting commentary described several of those expansions as dependent on further negotiations.

"Management expected the additional business," Reese observed.

"Which is perfectly acceptable as a forecast assumption."

"Provided everyone understands it's an assumption."

"Exactly."

Elias scrolled to the certification.

"Yet this document suggests the material risks were evaluated and found acceptable."

Reese studied the approval section.

"Perhaps management accepted the uncertainty."

"Then I'd expect the decision record to distinguish management's acceptance of risk from the underlying professional assessment."

"Doesn't it?"

"Not in the materials we've received."

Reese sat back.

"That's worth clarifying."

Elias picked up his coffee.

It had gone cold.

They moved to the conference room, where Reese had arranged the financial documents into a preliminary review package.

Whitlock's forty-five-million-dollar acquisition of Bellwether had been financed largely through a forty-two-million-dollar loan from a Morrowbridge affiliate.

The borrowing carried substantial interest obligations, making the timing of Bellwether's expected cash generation especially important.

The company wasn't incapable of recovering from disappointing results. But its original projections had left less room for delays than Elias preferred.

Reese examined the performance summary.

"The latest quarter is nearly thirty percent below the acquisition forecast."

"Yes."

"Some of the integration savings have also been delayed."

"Which means the business is generating less cash while certain expenses remain higher than expected."

Reese gave him a look.

"Thank you. I was struggling with the concept."

Elias ignored the remark.

He returned to the historical risk assessment.

"What bothers me is how confidently this conclusion is presented."

"You're questioning the financial analysis?"

"I'm questioning what the certification actually establishes."

There was a difference between a professionally prepared assessment and an executive decision to proceed despite its warnings.

Elias had seen companies make aggressive acquisitions for defensible strategic reasons. He'd also seen executives treat favourable forecasts as guarantees while dismissing every inconvenient qualification.

The Bellwether documents didn't yet establish which situation Whitlock had created.

"Do we have the original assessment?" he asked.

"We have what Whitlock included in the review package."

"That isn't necessarily the same thing."

Reese opened the document index.

"The certification refers to supporting analysis, but the package contains several summaries rather than a clearly identified original report."

"Then let's establish what we're actually relying on."

He made a note.

Reese glanced at the page.

"You're going to fill another notebook before we've even decided whether there's a transaction."

"That would be cheaper than financing something we don't understand."

"Your stationery supplier must adore you."

"Probably more than most borrowers."

Reese laughed.

Then his expression grew serious.

"There's another consideration. Nadia Ellery's professional relationship with Whitlock has ended. We can't assume she remains authorized to explain confidential company information."

"I know."

"And Adrian may object to us contacting her."

"His personal objections aren't a substitute for proper authorization."

Elias closed the folder.

"We'll have legal confirm what we can disclose and whether an independent inquiry is appropriate. I'm not asking her to reveal Whitlock's confidential records. I want to establish whether the professional approval attributed to her reflects work she recognizes."

Reese nodded.

"That sounds reasonable."

"Your enthusiasm is overwhelming."

"I'm preserving it for when we find something encouraging in the numbers."

By Tuesday afternoon, Sorrell's legal department had confirmed that a narrowly framed inquiry could be made without disclosing protected transaction details.

Elias reviewed the proposed letter.

It identified the Bellwether acquisition, explained the general purpose of Sorrell Strategic Capital's preliminary review and requested clarification concerning financial assessments attributed to Nadia during her former advisory engagement.

The draft was accurate.

It was also unnecessarily long.

He removed two paragraphs that repeated the same explanation and adjusted the final request.

He wasn't interested in asking Nadia to defend Whitlock's acquisition.

He wanted to know whether the document carrying her professional identity represented conclusions she'd actually reached.

Reese entered as Elias finished.

"Have you found a reason not to contact her?"

"No."

"Then send it."

Elias glanced toward him.

"You seem remarkably eager."

"I'd like us to finish this review sometime before Whitlock decides to acquire another company."

Elias smiled faintly.

He signed the letter electronically and approved its delivery through the professional contact listed on Ellery Strategy Systems' website.

Then he returned to the financial package.

The certification remained on his screen.

He examined the approval paragraph once more.

There was nothing inherently suspicious about an adviser approving a risky transaction. Competent professionals could reach different conclusions from the same information.

But the supporting figures raised enough questions that Elias wasn't willing to rely on the certification without understanding its origin.

He added it to the list of matters requiring verification.

Across Manhattan, Nadia was reviewing the services page on her consultancy website when the inquiry arrived.

The sender was unfamiliar.

The company wasn't.

Sorrell Strategic Capital.

She stopped typing.

Adrian had mentioned Elias Sorrell on several occasions during their marriage, usually after returning from an investment conference in a particularly unpleasant mood.

According to Adrian, the man had an irritating habit of asking questions everyone else considered settled.

Nadia had always wondered why that was supposed to be a criticism.

She opened the message.

The attached letter was addressed to her as the principal of Ellery Strategy Systems.

That small detail pleased her.

For years, important correspondence had arrived at Whitlock addressed to Mrs. Adrian Whitlock, even when its contents concerned her own professional responsibilities.

This inquiry used her name and company.

Then she began reading.

Her pleasure disappeared.

Sorrell Strategic Capital was reviewing financial information concerning Whitlock's acquisition of Bellwether Industrial Services.

The firm wanted clarification about historical assessments attributed to her professional work.

Nadia sat upright.

She remembered the acquisition far too well.

Bellwether had possessed valuable customer relationships and genuine opportunities for growth, but the proposed price depended on ambitious assumptions.

She had questioned those assumptions repeatedly.

Adrian had been frustrated by her caution, and Lydia had insisted that the company's potential justified the investment.

Nadia had eventually delivered her written recommendation.

Management proceeded with the acquisition.

Now an outside investment firm wanted to know about her role in assessing it.

She continued reading.

The letter referred to documentation indicating that the transaction had received appropriate internal financial-risk approval.

Nadia frowned.

She had participated in the review, but she hadn't possessed authority to approve the acquisition itself.

Perhaps Elias was simply asking for confirmation of that distinction.

Perhaps Whitlock's records were less clear than they should have been.

Either way, she wasn't answering substantive questions before understanding exactly what documentation the firm possessed.

She forwarded the letter to Jessa.

Her friend called ten minutes later.

"Is there something about Bellwether we haven't discussed?"

"I warned against the acquisition at the proposed price."

"And management proceeded?"

"Yes."

"Did you approve a later assessment supporting the transaction?"

"No."

Jessa was quiet for a moment.

"Then we should ask what document Sorrell's firm is referring to."

"That's what I thought."

"Don't send your historical files or discuss confidential figures informally. We can clarify the purpose of the inquiry and arrange a properly limited conversation."

Nadia looked at the letter again.

"Adrian won't like me speaking to Elias Sorrell."

"That isn't a legal argument."

Nadia smiled.

"No, I suppose it isn't."

They agreed that Jessa would review the proposed scope before Nadia discussed her former work.

After the call, Nadia returned to the message.

She recognized the professional value of asking questions before relying on another company's financial statements. She'd built much of her career around that principle.

What she didn't understand was why Elias needed to contact her personally when Whitlock should already possess the assessment she'd delivered.

She drafted a reply acknowledging the inquiry and requesting identification of the specific documents requiring verification.

Then she sent it.

A few minutes later, she closed the Bellwether notes she'd begun searching for and returned them to their protected archive.

The original recommendation was available if a properly authorized review became necessary.

For now, she intended to let the lawyers establish what could be discussed.

She was about to return to her website when another message appeared.

It came from Sorrell's office.

Elias had proposed a professional meeting later that week, with counsel welcome to attend.

Nadia read the invitation twice.

She had never met the man Adrian considered one of his most aggravating rivals.

Soon, apparently, she'd discover whether the description was justified.

More importantly, she intended to find out why a financial approval was being attributed to her when she had never agreed that Bellwether was worth the price Whitlock paid.