By the time Berst and Ohlson met on January 31, 1987, Ohlson's determination had driven him to the edge -- and brought him back to his former ally. He told Berst the stress was threatening his health. "Buy me out, John," he said.
Berst softened. He knew no business was worth a man's health, but he also knew by now it was all but over between him and Ohlson. Two weeks earlier, with sales slumping, Berst had attended a sales meeting to buck up the troops. Before Berst returned to the administrative offices, word had gotten back to Ohlson. Berst claims that when he entered the building Ohlson confronted him, demanding to know what right he had to meddle with sales.
On February 3 the four men met. Eme asked Ohlson pointedly what made him think that one of them could simply buy another out when the buy-sell agreement stipulated that any shares sold would go to the corporation, not an individual. That provoked a half-hour monologue by Ohlson about how poorly run ICC was. By now perceptions were so skewed that a meeting of the minds was impossible. The first quarter of the fiscal year had been bad. Ohlson blamed it on excessive spending by the others. They countered that these were justifiable capital expenses, agreed to by a majority of the group, which would yield benefits down the road. As Ohlson got up to leave the meeting his exasperation boiled over into threat. "I can take four or five people out of here and start a company," he warned.
The Breakup
In that last utterance lay the seed of truth, the spark of action. Bob Ohlson was a visible figure around ICC. Production workers saw nothing of the angry, driven man squaring off with his partners behind closed doors. They saw the kindly, caring president, the man with his finger on the corporate pulse. The man was credible. His partners knew he could tear the company apart with a few reckless statements. They knew it was time to separate Ohlson from ICC.
On March 9, 1987, the four met again, but this time the arena had shifted; the stakes had been raised to match emotions. Ohlson maintains that when they sat down in the office of ICC's attorney, the other three owners fired him and that a buyout offer -- for 60% of stock value -- came only later. Berst, Eme, and Dote recall offering that day to buy Ohlson out for $150,000 -- more than 100% of stock value. They offered Ohlson a company car, a consulting contract, and health insurance. Then they told Ohlson they wanted a noncompete clause.
That stunned him. Eme recalls Ohlson sitting expressionless in his seat as though he had just been hit full force in the chest. "I think he truly felt that we would make him a hell of an offer," Eme says. "His delusion was that everything was going to be OK." Offended by the offer, Ohlson balked at signing. He wasn't about to do that when he had his signature on a $700,000 line of company credit. Suddenly, Ohlson was not in control.
His partners then said they had no choice but to accept his resignation, since under the agreement a majority stake could vote a minority holder out. Berst and Dote approached to limply shake their former partner's hand. Dote recalls extending his hand and saying, "Bob, I'm sorry. I never thought it would come to this." Dote assumed this was good-bye.
The next day Dote's phone rang. Ohlson was on the line, asking Dote to meet him for breakfast. Dote, incredulous, acquiesced.
Over breakfast, Ohlson did the talking. "You and I could control the company," Dote recalls him saying. "We could get rid of Jim and John."
When Ohlson started criticizing Eme, Dote cut him short. "Wait a minute, Bob. Two years ago it was me you were jumping on."
Ohlson rejoined: "And Ralph, you're better for it. I made an entrepreneur out of you."
Ohlson's Svengali nature had been evident with people like Ralph Dote. Despite his salesman's bravado, Dote had his vulnerable side. He had married at 22. Eight months later his wife was diagnosed as having cancer. Within two years she died. Soon after that, he started a small business, a grocery store, and it foundered. Two or three weeks after Dote closed the doors of that business, his father died.
When Dote started at ICC he was a young man with few assets. Ohlson lent him $10,000 so he could pick up his stock options. Ohlson interpreted such a gesture as an emblem of the future faith he had in Dote. Others saw his motives differently. Through gestures like that, Ohlson gained control over those around him.
The breakfast meeting was merely the opening salvo in Ohlson's campaign to regain Dote's heart and mind -- and so the company into which he had invested so much of himself. The campaign gathered steam when Ohlson began sending off impassioned, overwrought letters to Dote, commenting on how ICC was about to go down and it wasn't too late for Dote to jump ship. A letter came from a Michigan corporation offering to buy Dote's stake in ICC. This was strange. ICC had never before received an unsolicited offer like this. Moreover, what was the point in buying a minority share? Dote claims that Ohlson's attorney was working through the corporation.
Asked about this, Ohlson replies obliquely that he had found a generous buyer for ICC, and his partners were too dumb to know a good deal when they saw one.
Dote sent copies of the letters to his lawyer. For a month he would not answer his phone. One day when Dote was at work, Ohlson knocked on his door at home and warned his second wife, Jackie, that ICC would go down the tubes if he wasn't let back in. In a few months the Dotes were to move into a new house. Ohlson told Jackie they'd never move into the house. When Dote learned of Ohlson's visit he told his lawyer, "I would have killed the son of a bitch if I had been there."
Working on Dote proved to be one front of a two-front war Ohlson was gearing up to wage against ICC. His rebuff at the March meeting had only quickened his appetite for revenge. That month Ohlson and those most loyal to him started meeting after-hours to plan their shadow company. Salespeople formed the core of a constituency Ohlson knew he needed to broaden if he were to pull this off. That called for a bold strike.
Early one April morning he strode unannounced into the cafeteria, where production workers were gulping coffee before the start of the day shift. His sources had told him that Eme was at a trade show, Berst on vacation, and Dote in the other building. He announced to the stunned workers that he had not resigned, he had been fired. The production manager phoned over to the other building: "Ralph, you won't believe who's over here." By the time Dote got over to the administrative building, Ohlson was gone.
