Wed Oct 24, 2012, 02:05 AM
Segami (9,022 posts)
Mitt Romney - The Wanna Be President
Apart from a close friendship, which is no secret, between Mitt Romney and Tom Stemberg, one turns the question over and over why it is that the now Governor of Massachusetts would have ever testified in a divorce case? We speak here of Mitt Romney’s relationship with Staple’s founder Tom Stemberg who is now Romney’s Campaign Manager. He was called, that’s why, and had no choice, but Romney did have a choice and an obligation to be completely forthcoming on the stand. But then, the details haven’t been made clearly public, so in some effort to set the long and very winding road straight (for this is really like going through the looking glass, which may well be as it is intended), Mitt Romney and Tom Stemberg go back a long way – all the way to the very founding of Staples when Romney was working for Bain and felt that Staples was perhaps a good investment and was the first investor to come on board to the tune of $650,000 dollars. It was about a year and half later later, in 1988 when called as a witness by Tom Stemberg’s lawyers for a divorce case that Romney said on record that Staples stock was, essentially, “over-valued. In his own-words, Romney said, “I didn’t place a great deal of credibility in the forecast of the company’s future.” (p. 441, appeals court document No. 95 P 286, Norfolk County) Romney is then asked how many times in the past he has “reviewed these kinds of offerings” (441).
Yet in the early Spring of 1989 Staples went public. So much for undervalued. Either Mitt does not know his figures, or he was dangerously close to perjuring himself on the stand or outright lying. You decide… Of course, as a senior at Bain, the answer can only be many times. Romney goes on to say that Tom Stemberg spoke about the future as if it were today. Tom Stemberg minimized the risk and maximized the high probability of success.” (p. 366 appeals court document No. 95 P 286, Norfolk County). And as Romney says to the attorney, “…and the dream went on.” What is important to note here is that while Romney was giving this testimony, he was also in dealings with Stemberg and Goldman Sachs to take the company public. That is to say, a company of no worth, in Romney’s own words – he was about to carry the “dream” forward. Staples went public through Goldman Sachs but three years after Romney’s initial capital investment. “Mitt Romney says he’s prouder of this investment than any other.” (Mister PowerPoint Goes to Washington, Mathew Rees, December 1, 2006) The issue here, if it is not already clear, is why a primary investor in a company that Romney was about to take public and of which he later says he is prouder than any other, he downplayed in a civil divorce case
As a witness for Tom Stemberg, Romney perhaps wanted to downplay the worth of Staples because if he did this then Maureen Sullivan-Stemberg stood to gain a whole lot less from Staples equity because Romney had just undervalued her ex-husband’s primary asset in a fifty/fifty state. If Staples is not worth very much, if the judge can be convinced of that, then how much can he award in terms of shares? More, if monies and property are communal in a marriage, why wasn’t Staples split fifty-fifty and why was Romney testifying at all, other than the fact that Tom Stemberg, clearly one of Mitt Romney’s best friends and who recently said of Romney, “I have never met a better venture capitalist …I suspect he will be an equally good president.” (Mr. PowerPoint Goes to Washington, Wide Awakes, syndicated). Clearly, the relationship between the two has not ended, and that’s fine: why shouldn’t they be friends. But Mitt Romney is running a bid for presidency on certain values and they are directly at odds with what some of what he has done, and certainly, what his best-friends who support him do. Now, since this article was began, Tom Stemberg has been named Romney’s campaign manager. Let’s look first at Romney’s integrity in 1989 at the time of the Stemberg divorce when he was a major shareholder, the first investor, and a boardmember and as such, had, as with any corporation, if the stock was plummeting and in as bad a shape as Romney had said on the stand, why had he not informed shareholders, in particular, didn’t he inform major shareholders like Maureen Sullivan-Stemberg (regardless that they were divorcing his best friend, for that would be immoral to withhold, right?) who owned at the time approximately 180,000 shares.
If Staples really was going under as Romney said and was not viable, like any corporate shareholder meeting that would be held, his role as the a primary investor and major shareholder would be to inform the shareholders, particularly large shareholders of the company’s future and how he did not “place a great deal of credibility in the forecast of the company’s future” (441, Appeals Court, No. 95-P-286, Norfolk County.” and that they were living a “dream” to use his word. (“and the dream went on…” (ibid) Romney apparently still has what Boston.com reported as a “distinct lack of authenticity.” (http://www.boston.com/news/nation/articles/2008/01/07/romney_tries_to_rebound_on_record/) That Romney in the Sullivan-Stemberg case and for Tom Stemberg, and get what you will from his testimony because to one day say the company is worth nothing, then take it public, make millions, then say it is his “proudest achievement” sounds a lot like flip-flopping which Romney has done on many issues, including abortion when he was pro-choice, pro-gay rights, and so on – he flip-flops, just as when he was nervous, he by some sources used to flip his tie back and forth. How apt.
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Mitt Romney - The Wanna Be President (Original post)
|Angry Dragon||Oct 2012||#1|
Response to Angry Dragon (Reply #1)
Wed Oct 24, 2012, 02:41 AM
Segami (9,022 posts)
2. Hmm, maybe the reason Gloria and the Boston Globe
are in court tomorrow is to have the files unsealed and gag order removed to further investigate if Presidential candidate Mitt Romney is guilty of perjury and fraud. I believe there is definitely some meat to be uncovered within those sealed documents.
Staples went public. So much for undervalued. Either Mitt does not know his figures, or he was dangerously close to perjuring himself on the stand or outright lying.
Response to Segami (Original post)
Wed Oct 24, 2012, 10:26 AM
cojoel (298 posts)
4. Here is what I don't understand
I am not a lawyer. However I did go through an messy divorce once.
If the state is a community property state, then the law requires equal division of assets. So say there were 20 million shares. Then they should have each gotten 10 million shares, and the value of the shares doesn't matter.
If the state is an equitable distribution of property state, then the court has more discretion. However in this case, when the value of an asset is questioned, it is still reasonable for a judge to divide it evenly.
The question of "employee stock options" is different, however, in that there is generally a cost associated with their exercise, and hence the value of the options is the current value minus the cost of exercise (strike price plus any brokerage fees). Then it is more important. In the case of a non-publicly traded stock the value is impossible to set with any certainty, and there may be no market to sell exercised shares. But it still would be possible (I don't know specifics about the law; I am speaking conceptually) to divide the vested at the time of divorce options in a 50/50 manner, with terms allowing them to be exercised on behalf of the non-employee spouse at a future time. I personally do not believe non-vested options should be distributed to the non-employee spouse, since the vesting represents compensation for future work, which would occur post decree. But that is better discussed in a different thread.
The judge in my divorce did none of these things, by the way.