The May Report: 2/18/2013: Pasha: The private life is dead – for a man with any manhood. Zhivago: I saw some of your ‘manhood’ on the way at a place called Minsk. Pasha: They were selling horses to the Whites. Zhivago: It seems you’ve burnt the wrong village. Pasha: They always say that, and what does it matter? A village betrays us, a village is burned. The point’s made. Zhivago: Your point – their village. http://www.moviefanatic.com/quotes/your-point-their-village/ …. For better or worse, here goes! It’s easy to over think things. The story I’ve been tossing and turning over and agonizing about since the morning of October 24th, 2012 is a story like any other, a tale of sound and fury, but it’s about real people, and those people, — yes, including even Eric Lefkofsky, have feelings and emotions. What has held this report up since mid-January is many things, but first among them is that I, your humble narrator (a line I’m stealing from ‘A Clockwork Orange’), am neither judge nor jury nor hangman. My job is simply to report, and the truth will out eventually as it almost always does. “Should I, after tea and cakes and ices, Have the strength to force the moment to its crisis?” [Eliot, Prufrock, http://en.wikipedia.org/wiki/The_Love_Song_of_J._Alfred_Prufrock]] http://www.dailyscript.com/scripts/drzhivago.pdf Yuri: Did you ever love a woman, Razin? 1340 CLOSE UP. RAZIN, A TREMOR OF SORROW, rage — something human in his voice;… RAZIN: …. I once had a wife and four children. 1341 CLOSE UP. YURI. Looks down, looks up again. [They're in a corn field in Eastern Russia where young men from a local military school have just been shot.] …1525 CLOSE SHOT KOMAROVSKY has mounted the first two stairs, his face is flushed and hateful, but oddly, also tear- strained. He bawls passionately: KOMAROVSKY We’re all made of the same clay you know! …. CLAY !!…. So, let’s get started. My plan is to force myself into a corner by printing this now, followed by the usual prosaic and tedious report, then back to the Sturm und Drang http://en.wikipedia.org/wiki/Sturm_und_Drang, soap opera/drama. Just FYI, my last contact with anyone tied to the story was January 27th when Angela Suddarth confirmed with me that they had been ‘served’ the papers as she wrote: “Papers were dropped on our front porch last week …. I assume that means we have been served.” Open the report now….. A few weeks after the sale (mid August 2012) of Shipper Direct in Nashville, TN back in July 2012 to Echo Global Logistics (for $4.1MM in cash and a $4.5MM earn out over five years), Echo “changed its mind” about the acquisition, as Dave Menzel, Echo’s CFO, told me Monday afternoon, January 7th, they had figured $18MM in revenue over the next year, but they decided that the real number projecting the next year’s revenue was closer to $4MM to $5MM, and they wanted money to be paid back from the sale. Even though Echo had done extensive due diligence, pouring over the books for weeks if not months in the person of Kyle Sauers and his staff, they now accused the Suddarths (Billy and Angela, the owners of Shipper Direct) of deliberately misleading them, of keeping two sets of books. The lawsuit filed in mid January claims that Echo was defrauded, mostly by Angela Suddarth, but the timing on that suit bears great scrutiny and is suspect indeed since it seems to be linked to this report. Now here is where we encounter serious differences of opinion: Menzel says that the 12 Echo analysts were told in an October conference call (as of October 2012, that call had been Echo’s only public disclosure of the controversy until the lawsuit was filed on or about January 15th) about 3rd Q earnings that the seller paid back $1.6MM, but Billy’s and Angela’s story is that the money retrieved by Eric Lefkofsky was forcefully TAKEN back through a complex scheme of hook and crook, employing ruse after ruse and trickery galore, including check, wire and bank fraud, and including such techniques as asking for Angela’s dad’s middle name and her mom’s date of birth to get bank account access and on top of the $1.6MM from the company bank account left after Billy and Angela had paid off creditors and others including $135K to the IRS, there was also a brand spanking new Bentley worth at least $100K which Billy had bought with money from the sale, plus $73K or $78K from Angela’s personal bank account, $140K from the so-called transportation account, two pay periods for Angela out of her $150K annual salary, the “bonus” money paid back by Charlie Clem and Rebecca Martino plus thousands of dollars in personal furniture that has yet to be returned; Also, as Mary Neil Price pointed out to me, no 8k was ever filed with the SEC on the contents of that October conference call. At the center of the whole story are threats and intimidation, explaining once again why some people call Chicago Silicapone City: the safety of Angela’s daughter Jessica Chew was threatened and with respect to the Bentley, they were told “You have until 2pm tomorrow to surrender the car” by Kyle Sauers, and the backdrop to that threat was many threats made by Eric Lefkofsky, according to Angela Suddarth who is ‘corroborated’ by her husband Billy and their lawyer for the sale who is now a material witness to the case, Mary Neil Price with all of Eric’s bravado in a room at 600 West Chicago in August 2012 where Eric waited until employees had gone home to unleash his anger (or tirade) at about 6pm and in the room at the time were, I believe, Angela, Billy (who was taken down the hall to another room so that Angela and Billy would be separated), Kyle Sauers, Eric Lefkofsky, Dave Menzel, and I believe Echo’s CEO Doug Waggoner and in that “conversation” Eric told them that: 1. “I have the president of the United States on my speed dial.”; 2. “I have the director of the CIA on my speed dial.”(at that time General David Petraeus) but that account is disputed by Eric’s personal PR guy (who supposedly flew to Chicago from Los Angeles to meet with me on the morning of January 15th and he’s asked to remain anonymous) who told me that Eric was referring to the director of the FBI, not the CIA; 3. An extortion threat had been made to Eric (it is true that Eric was subject to an extortion threat, along with Harvey Weinstein); 4. He, Eric, said that he “can make people disappear,” and here he was supposedly referring to Billy and Angela’s daughter Jessica, but he putatively made this threat with the intent to drive home the point that a guy who attempted to extort him ended up in the fed pen in Virginia and that part is true; 5. Eric repeatedly referred to “his money” saying that “nobody f***s with me”; 6. Eric told Billy and Angela that “You have until 5pm tomorrow [Thursday, I believe August 16th] to put every f***ing dime of my money back into my account.” The theme of the boss town or the mafia culture runs deep here, I told Angela several times, and more on what Eric said in a minute; meanwhile, Kyle Sauers, SVP Finance – Controller, Echo Global Logistics told Angela “Don’t lawyer up here. We don’t have $600 an hour lawyers on retainer for nothing.” Two people who did not play the Eric/Kyle game and who did not return their “bonus money” which was really a pre-payment of money they were expected to make over the next 5 years from the fuel allowances, the transportation allowance, expense accounts, etc., were Darlene Demumbra and Jim Hall; at least where Jim is concerned, strange cars were sitting outside his house and I’ve been told by a few sources that he was being stalked; Darlene is hiding away these days to avoid harassment and Jim has taken a clerical job after being disparaged by Echo to Billy’s and Angela’s clients when he had been a $100K+ transportation executive with many years of experience; so where do things stand now? Billy and Angela are trying to operate by rubbing two wooden nickels together; their lawyer, Mary Neil Price, http://nashvillenawbo.com/2012/08/17/mary-neil-price-dickinson-wright-pllc/ who handled the initial transaction, is, as of late last year or early this year, no longer their lawyer, but she is a material witness to much of what has gone on; Dave Menzel seemed surprised when I told him about the SEC investigation of Echo based on alleged SoX violations along the lines of pumping the stock with false press release claims and the July 2012 press release is exhibit A, plus alleged violations of the whistle blower protection provisions in SoX; a hearing was held in Nashville on December 19th, 2012, Kyle Sauers continues to try to siphon funds, according to Angela, by telling clients of the Suddarths to send their checks to Echo and not to Billy and Angela; so we finally come to the $64,000 dollar question: Why on earth would Eric Lefkofsky, by hook or crook a real billionaire, and Echo, an $800MM annual revenue company, piddle around for a couple of million bucks? Interesting question, don’t ya think? Now for more detail on that soon to be infamous conversation involving Eric Lefkofsky and Angela Suddarth here in Chicago, which is really a minor part of the story, if not a footnote, but I, like Borges, http://en.wikipedia.org/wiki/Jorge_Luis_Borges love footnotes: “What the f*** do we know about this?” the man said sternly, in a very calculated controlled manner…”Don’t f*** with me. Nobody f***s with me.”… “You stay right there” [referring to Angela]….”Take him down the hall.” [Orders from Eric referring to Billy]… “You don’t leave until we get this done.” [Looking at Menzel, "You come with me. Shut the door."] Kyle and Angela are in the room with Eric and I believe Menzel and Billy is down the hall with strangers. With respect to the Asset Purchase Agreement, Kyle and Dave dictated to Billy, “Here’s what you’re going to admit to,” as told to me by Angela. Angela told me that “Eric was the driver, Kyle was the executor, and Menzel was the mouthpiece.” “They got us in a room to see who the weaker of the two of us was,” she told me. They decided that it was she. The story has so many labyrinthine twists and turns, it will make your head spin … and so many unanswered questions. Do you realize that Echo is still paying rent on the building to Billy and Angela?, We also have what Angela calls “red neck law” involving an alleged assault by Kyle on a woman named Sherri in a room in TN on August 29th or 30th and the Hendersonville cops. Angela says she was “scared s***less.” She was isolated physically, the employees in the building at 600 W. Chicago had gone home already which appears to have been part of the staging. As Mary Neil Price told me “She [Angela] may not have been literally locked in the room, but there was a hostage mentality that had taken over.” In Angela’s mind was the physical safety of her daughter Jessica. She found herself in a strange city, in a building that intimidated her, and as she later said “I was wondering if I was dealing with the mafia.” “I can make people disappear,” Eric had told her. Eric then proceeded to tell the story of a person who had tried to extort him and who had threatened his family, “and now he’s in the federal pen in Virginia,” he said. Angela got home to Tennessee on that Friday, August 18th and first thing Saturday morning, after she knew her daughter was safe, she called their lawyer Mary Neil Price to tell her what had happened. Clearly, to be continued with many documents and much more of the story and analysis to come, plus maybe I’ll turn this into a screenplay.
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END OF REPORT