One of the curses of being a deal attorney and really liking what you do is that sometimes it is hard to turn off the transactional mind. In the middle of a large deal it is difficult to shift to loving, caring husband and father the moment you walk in the door at home. Frequently, I find myself either negotiating with my family over family matters or regaling them with details of transactions that mean absolutely nothing to them. Usually my wife calls me on it and I turn off the deal maker mind and slip back into family mode. Those little snippets are the only exposure my family has to what I do on a daily basis. As exciting as this work is to me, it is technically difficult and hard to find interesting if it does not directly impact you.
That all changed on January 10, 2014 when the St. Louis Business Journal ran a multi-page article entitled “Bidding Down: Ivey-Selkirk under fire as sales slip, customer complaints mount.” The article described several lawsuits against Ivey-Selkirk, the successor to an auction business that operated in St. Louis for more than 180 years. My wife, Susan Kime, started working in the business with Bruce Selkirk more than 20 years ago and was still employed there the day the article ran in the St. Louis Business Journal.
That day was seminal in our family and professional lives. It was our own familial “where were you moment.” I will always remember where I was when I read that article and the events that followed that day. It was the first time my wife and her fellow employees learned that clients of Ivey-Selkirk where not being paid for items and were suing the firm. The company’s owner had concealed this information from employees. Learning that several of their valued contacts and clients were now in litigation against the firm shook the employees to the core. That Friday afternoon after the article ran a group of employees met at our house and we started to develop a plan to save the auction business in St. Louis. My wife became my client.
That weekend I did not have to turn off the business lawyer at home. I got to put those skills on full display. Saturday morning we got up early and did a three year set of projections. I followed her around the house asking…how much do you pay for catalogs, where do you advertise, how much does insurance cost and all the other details I needed to know about the business. By the end of the day we had a business plan and projections ready to go.
Sunday was spent looking at real estate and running numbers on different pieces of property. It is amazing how many old schools, churches and other similar structures are available to rent or purchase in the St. Louis area. I think we looked at them all in 12 hours. By Sunday evening we had identified our dream property, the former St. John’s United Methodist Church in the Central West End, but we needed to find a partner to purchase and develop the property. Fortunately serendipity was our friend throughout this project.
Pete Rothschild, Aegis’ first landlord and a long-time client of the firm, had set a meeting with my wife, Susan, for the next Monday afternoon. Pete is an avid collector of art and antiques and formerly owned Rothschild Antiques. He wanted to meet to commiserate on what was happening at Ivey-Selkirk, but had no idea that Susan and her fellow employees were considering leaving and starting a new business or that I was coming to the meeting. Susan, a co-worker, and I showed up with a full business plan and set of projections, Pete looked at the plan for 10-15 minutes, reviewed the projections, picked up the phone and put our dream property under contract. Susan and her team were off to the races now. Ultimately, the business would take its name, Link Auction Galleries, from renowned architect Theodore Link who designed the building.
For me the next steps were relatively easy. It is what I do every day. My tasks were to put together organizational documents for the business, arrange the financing to fund the business, foreclose on the assets of Ivey-Selkirk and set up all of the contracts Link Auction Galleries would need to operate. These are all things I had regaled my wife with concerning other businesses only to be met with a blank stare in the past. Now as we discussed promissory notes, guaranty agreements and the other documents she needed, she hung on every word asking questions like can you limit the guaranty, how long does a vesting provision need to be and what is the tax impact of issuing profits interests. This may sound boring and uneventful to most people, but to me this was nirvana. Working with my wife in such a meaningful way and having her see my professional skill set on full display will always be a highlight of this project to me.
For Susan and her team, this was a new and sometimes scary world to enter. This team is accustomed to researching collectables, fine silver, art and antiques, the prospect of dealing with city inspectors, software vendors, insurance agencies and setting up all of the other necessary elements to get a business off the ground was daunting at times. So we turned to our client base at AEGIS Professional Services.
Our firm is fortunate to have a diverse set of clients with thriving businesses and many of them were able to help get Susan’s new business off the ground. For Human Resources, payroll and benefits needs, the business used Jay King at Simploy, one of AEGIS’ first clients. Jay took over the entire process and saved the business an immense amount of time and expense in the process. The company’s IT needs were handled by Rubi Professional, another client of AEGIS.
The most daunting task of all was to prepare the building, a 46,000 square foot abandoned church that had been vandalized and stripped of all core systems ready to pass inspection and host an auction in three-four months. The tale of how this occurred is a separate story on its own, but the short answer is that Sitelines Construction, another long-term client of our firm, saved the day. Kelly and his team at Sitelines did yeoman’s work. The building permit to open the business issued at 1:45 pm on the afternoon of the grand opening that was scheduled for 6:00 pm that evening. Link Auction Galleries would not have received the permit that day and the work would not have been completed on time without Sitelines taking over the project at critical times.
With a lot of assistance from clients, friends, and family, Link Auction Galleries opened its doors to the public on June 26, 2014. The grand opening was attended by more than 1,200 people, about six times the number that we expected to be there. The inaugural auction, held July 12 and 13, vastly exceeded expectations.
The day after the auction, I pulled out the projections Susan and I prepared that first weekend and compared them to reality. Operating expenses are twenty percent lower than projected, revenue is fifty percent over what was projected, but most importantly Susan no longer rolls her eyes when I prattle on about structuring an acquisition. I think she has even grown to like doing deals.