Trial by Power

Chapter 4: Leverage

The pitch was in the main hall, the one with the vaulted ceiling and the donor names cut into the wall in letters two feet high. They had set the console at the side of the stage, below the lip, so the person running slides was half invisible from the floor. That was the seat I had been assigned.

The panel sat in the front row behind a long table with water glasses and name cards. Four of them. Two were faculty. Two were outside. Everyone in the group had spent the week talking about the outside two: a managing partner from a Boston fund, and a woman who had sold her health-care company three years ago and now sat on boards.

Nobody had talked about the man in the middle.

He was in a dark gray suit with no tie, collar open. He had the chair tipped back at an angle that would have gotten anyone else a note from the dean. There was a pen in his hand and he was turning it, slowly, between two fingers, and he was not looking at the deck on the screen or at Chris or at any of the rest of us. He was looking at the middle distance, at nothing.

I knew the face. I had never met him.

The screen had given me his name an hour before the pitch, in a single line across my bathroom mirror while I was brushing my teeth. I had read it and gone back to brushing.

Ethan Lu. Boston and New York both. The kind of money that did not need a title because the title was implied by which rooms he was allowed into, and the kind of reputation that made people in those rooms sit up.

Second line, right under it, the same size, the same flat font:

He read one message from your sister two years ago, decided she was a scam, and blocked her number. No reply. Not even a threat.

That was all. The screen never explained itself and it never repeated itself, and I had learned not to stand in front of it asking.

I looked away from him before he could look up.

Chris was already talking. He had the clicker and the polished shoes and the voice he used in rooms where he assumed the room was his. He walked the panel through the deck — the market, the target, the strategic rationale. He landed on page three the way a man lands on a step he thinks is solid.

"The debt restructuring," he said. "As you can see, we've designed an aggressive structure to maximize returns in the post-acquisition window—"

"Page three."

It was Ethan. He hadn't raised his voice and he hadn't leaned forward. He didn't need to. The hall had the kind of acoustics where a dropped coin is an event, and everyone heard him without a microphone.

"The debt restructuring model," he said. "The logic is wrong."

Chris stopped mid-slide.

"If you run that structure," Ethan said, "the first time the market moves against you — and it will, because it always does — the covenants break in the first quarter after close. The whole thing unwinds. You lose the target, you lose the equity, and you lose the relationship with every lender who signed onto it."

He set the pen down on the table.

Chris laughed. It was the wrong laugh, high and quick, and he heard it and tried to cover it with a sentence.

"Well — I think what we're doing here is taking a view on the longer arc. The synergies—"

"Synergies aren't a number."

"The strategic case for consolidation in this sector—"

"Is not a repayment schedule."

Chris's face had gone the color of skim milk. He turned a page back and then forward again like the deck might have fixed itself while he was standing there. He said something about the management team and something about the platform and it did not add up to a sentence anyone could have checked against a number.

Ethan had stopped turning anything. He was watching Chris without any expression at all.

"Does this school still teach the difference between a story and a projection?" he said.

Nobody laughed. Somebody in the second row put their phone face down.

Sitting at the console in the dark under the lip of the stage, I did the arithmetic. The woman from the health-care company was already writing on her pad. The fund partner had his arms crossed. The two faculty were looking at each other. Whatever grade the group was going to get was standing on the same cracked step Chris was.

I stood up.

I picked up the spare microphone from the console, and I walked out from behind it, onto the stage, in front of everyone.

"Mr. Lu."

He looked up. That was the first time he looked at me, and it was a look like being weighed on a scale you can't see.

"The data on the slide is wrong," I said. "That restructuring is not the model our group built. It was changed — the leverage ratio, the repayment structure, the projections — after the analysis was complete, to make the returns look better on paper."

The hall made a sound. Not quite a murmur, more like several hundred people shifting at once. Chris turned his head and looked at me.

"You're out of your mind," he said. His voice had gone up half an octave. "You don't know what the model is. You were never on the model."

"I built it," I said.

I did not look at him again. I plugged the drive into the console.

The screen changed.

"This is the model we built," I said. "A conservative leveraged structure with staggered repayment, sized to survive a twenty percent revenue shortfall in the first year. The headline return is lower than what was on that slide. It also does not default. The first year generates roughly fifteen percent cash flow back into the deal, and the downside scenarios are on the next slide — three of them, including a rate shock and a demand contraction, with the covenant headroom for each."

I walked the panel through it. I did it the way I would have done it for a professor who hated me, which is to say I did it with numbers and no adjectives. My voice did not shake. I had spent twenty years learning to talk to people who had already decided what I was, and this was, at last, a room where that skill was worth something.

When I finished, I looked at the panel. Three of them were reading the screen. The woman from the health-care company was writing again, faster.

Ethan Lu was looking at me.

He did not look at the screen. He looked at me, and he held it, past the point where people usually look away, thirty seconds of a man doing arithmetic that has nothing to do with the deck. Then he sat back.

"Good save," he said, flatly, the way he might have said the date.

"What's your name?"

I had been asked that in this country maybe a hundred times in the last two months, and every time it had been a hurdle I had to get over, a thing I had to hand to someone in an accent I could hear in my own head. This time it was just a fact.

"Avery Lin."

He nodded once, and reached for his water glass, and that was the end of it.

The panel moved on. Chris said the closing remarks because the rules said the group leader said the closing remarks, and he said them to the back of the room with his hands in his pockets, and he did not once look at the console where I was already sitting back down. Pete stared at the same spot on the wall for the whole thing. The girl who only read what was assigned read her phone.

The fund partner found me by the side door afterward and asked me who taught me to run a downside case. I told him the truth, which is that nobody had. He gave me his card and told me to email him in the spring.

Walking out, I passed the front row. Ethan Lu was already gone.

---

I did not hear from Chris that day. He did not text, and the group chat was silent, and I understood that whatever was going to happen to me in that group would happen later, probably in a small room, probably with a tone of voice I had heard before.

I walked out the side door of the building because I did not want to walk out the front.

There was a black car at the curb. Not idling for anybody else — the driver was standing at the rear door with it open, and the rear window was already down.

"You," Ethan Lu said from the back seat. "Get in."

I stood there for three seconds, which is two seconds longer than you take in a city where people get into cars. Then I got in.

The back seat was the size of my kitchen. Cedar, faintly, and the sealed quiet of a car that costs more than the building I grew up in. The traffic on the far side of the glass was happening to somebody else.

Ethan did not do small talk. He did not ask how I was or say what a coincidence.

"You built that model?"

"I built the model. I ran the stress cases. The other four did the deck and the writeup."

"The other four put their names on a slide that was a fabrication."

"The other four did not build it. One of them changed it. The rest did not look."

He looked at me for a moment, and the look was the same as it had been in the hall.

"I have a branch here," he said. "Midtown, three blocks from the river. I need interns who will not hand me a deck they haven't read." A pause. "Come work for me."

I had heard of Ethan Lu's Boston office the way you hear about a hospital you will never be admitted to. Two people in my program had interviewed there. Neither got a second round.

"Why me," I said.

"Because your group was handing the panel a fantasy and you stood up in front of four hundred people and cut it to pieces, in your second language." He was looking out the window now, not at me.

I did not answer right away. What I was thinking was not flattering to anyone in the car, and I kept it where it was.

"Classes run until early May," I said.

"I know what classes run until."

"I'd be there nights and weekends."

"That's what an internship is."

I looked at my hands in my lap and then I looked up at him.

"Two conditions," I said. "I keep my own work. If a draft of mine goes out with someone else's name on it, I walk."

He turned his head back from the window and looked at me for a moment, the same look as the hall.

"Fine," he said.

"Then okay," I said.

He gave the driver an address I didn't catch, and the door opened, and I got out.

---

The next six months were the hardest of my life, and almost nothing about them was interesting to anyone who was not in them.

I sat in class in the morning and at a desk in the Boston office from five in the evening until the last light in the corridor went out. I ate at my desk. I learned the internal reporting template in a week and broke it in three. I learned that at Ethan Lu's firm a memo with one wasted sentence comes back with the sentence circled and no comment on anything else, and that this was not cruelty, it was just the standard, applied to everybody, including the people who had been there longer than I had been alive.

Twice I got called into his office for a draft that was frankly bad. He did not raise his voice either time. He slid the page across the desk and said, "This is not analysis, this is feelings with a chart on top," and I went back to my desk and did it again, and the second time it came back with a single word in the margin, which was "better."

By November the numbers had stopped being a subject I studied and had become the language I thought in. I was fast. I was getting good, and I could feel it, the way you can feel a cut healing.

The last week of November the rain did not stop. It came down for three days straight, hard and cold, and the gutters on the street outside the office backed up and the glass in the conference room shook a little in the wind.

I was the only one left on the floor. It was past eleven. I had been on the same acquisition for a week — a mid-cap target, a deal the firm had been invited into, and I was on the diligence and I had a feeling I couldn't shake about the target's overseas segment. The numbers were consistent, which was exactly the problem. Nothing in a real company is that consistent.

I pulled the subsidiary filings, and the filings in the country where the subsidiary was registered, and I read the two side by side until my eyes hurt.

The overseas assets were not what the parent company had told anyone they were. They were structured to look like revenue. Somewhere in there was a shell company wearing the right address.

I was still staring at it when the door at the far end of the floor opened.

Ethan came down the corridor with his jacket off and his sleeves rolled to the elbow. He stopped at my desk and looked at the screen for a moment over my shoulder, and I could feel him doing it, the speed at which he took the whole thing in.

"You found it," he said.

"I think so."

"You found it on Thursday." He straightened up. "I found it on Monday. We're calling the deal off in the morning."

He looked at his watch.

"Pack up. I'll drive you."

"I can take the T."

"It's three days of rain and the T is flooded at Park. Pack up."

I packed up.

---

The car was quiet and the rain moved across the glass in sheets. I sat with my bag on my lap and watched the streetlights smear.

"You don't do this with anyone," he said.

I turned my head.

"In six months you've been in that office every night and you've spoken to the analysts twice." He was watching the road. "You eat at your desk. You don't come to anything. It's not shyness. You're not shy, you proved that in the hall. It's something else. You keep everybody at exactly one arm's length and you never let them get a hand on you."

I was quiet for a while. Outside the glass, the city was doing what it does in the rain, which is to look like somewhere else.

"I was raised as a spare part," I said. "In my house. There was somebody else who mattered and I was there in case something happened to her. Not for love. For use." I heard myself and tried to make it lighter. "So I learned not to expect anything. It's easier. If you don't expect, you're never disappointed. That's all."

Ethan didn't say anything.

We came up to a light and the car stopped. He looked over at me in the green-and-red of the intersection, and he did not do the thing where you soften your voice.

"Then they were stupid," he said.

"Who?"

"The people who raised you." He turned back to the road. "You were in a house full of people who couldn't see past their own nose, and you got out anyway. Everything you've done since you landed in this city, you did alone — nobody handed you a thing. I've watched you for six months."

The light changed and the car moved.

I did not say anything, and he did not say anything else, and he dropped me at my door in the rain and waited until I was inside before he pulled away.

---

It was not a thing that happened. It was a thing that kept happening.

He never said another word about that night in the car. He never asked me anything again about my family, and I never volunteered anything.

But there was a box on my desk one Thursday — matcha, a small one, from a bakery I had mentioned exactly once, weeks before, in passing, to nobody, in a conversation I had forgotten.

There were messages that arrived at four in the morning Boston time, when he was in a hotel somewhere in another time zone between meetings, that said things like *is it cold there today*, and nothing else, and I would answer with a number and he would not answer after that.

And late on the day I closed my first deal on my own — a small thing, a client nobody in the office wanted, an earn-out negotiation that took me nine days — a glass of champagne was sitting on the desk by his office door when I got back to the floor. Ethan Lu walked past me on his way to a call.

"Nice work," he said, and kept walking, and went into the room and shut the door.

I stood there in the corridor and drank it before I went back to work.