Trying to keep the peace sometimes meant avoiding each other during the day--or coming in on days when the other wasn't there. As a result, seemingly innocuous decisions, such as updating software, took forever. Heather Maylander, an 11-year employee in ALC's list-brokerage services, says deciding how big a party to throw at a trade show became a polarizing issue.
Innovation and growth began to suffer. "They had had such synergy that when they put their heads together they came up with great ideas," says Witwer. "And the opportunity to put those heads together just ceased."
Managers found themselves in an awkward position. "As a director, it became more difficult to take a stand against somebody," recalls Fran Green. "The company had always had very, very direct and open communication, particularly at the top. The spirit of being able to do that with Donn and Liza was definitely not the same during that period. They'd take things personally. They'd think I was taking sides rather than making a good business decision." And though the pair had always fought passionately about the business, their arguments now grew more volatile, clouded by personal issues. Monthly managers' meetings went nowhere, with Rappaport pitching acquisitions and Price talking about maintaining a 15% growth rate. Regular attendee Stecher says, "It was very difficult. You could see the stress between the two of them. It became more difficult for them to come to agreement. Meetings were becoming very uncomfortable."
In the industry, word traveled fast that the golden couple's marriage had tanked, leading some anxious customers and prospective customers to shop their business elsewhere. "We lost some clients," admits Green. "They never said, 'I'm leaving because Donn and Liza are splitting up,' but I think we all believed that. It was difficult. Clients move around all the time. But if you know someone's thinking about it, you go out with all guns blazing to keep them. And it was difficult for us to make a case. Clients didn't want to put their businesses in jeopardy waiting to see what was going to happen with ALC." Rumor had it that competitors were using ALC's vulnerable state to capture deals. "I think anytime a company's undergoing a transition, competitors are going to say, 'There's a certain amount of instability there. Why don't you come with us, to a more stable environment?" says customer Cindy Still, who recalls being on the receiving end of competitors' pitches while at The Atlantic Monthly.
While Price and Rappaport continued to go through the motions at work, the lens through which each viewed business decisions changed. Although the two had always been at loggerheads over growth issues, there had been an underlying trust throughout their sparring. Each had the other's future well-being in mind, since the two shared a nest egg. Virtually overnight, suspicion replaced that security. "When you're separated and working on your divorce and working out property distribution and all kinds of things like that," says Rappaport, "all of a sudden you're not quite so confident that the other person has your best interest in mind." What had once been constructive disputes over growth became loaded issues. "When things were going well, we were able to talk about the decision to take on some new business, to do an acquisition, to expand into a new area," he says. "When things were not going well, it was the same discussion, but the outcome was very different." Price found her soon-to-be ex-husband's push for growth unbearable. "It actually was OK until this whole business about doing acquisitions and going public and getting bigger, bigger, bigger became the most predominant thing," she says. Rappaport admits, "I got caught up in how fast we were growing, how big we could get. I think we became a little polarized in a lot of ways."
To make matters worse, things Price and Rappaport took for granted as a married couple no longer applied. They had often made alone what should have been joint decisions, knowing they'd discuss them later at home. "There were a few things that started making me realize that if we weren't married, he wasn't going to be such a great business partner," says Price. "When you trust the person and you know you're going to see them later on, some things you do are OK." Take, for example, an event that Price says transpired in May 1994. Price, Rappaport, and Tomlinson were negotiating with Vinod Gupta, founder and CEO of American Business Information, to sell Zeller and Letica, the New York City-based business-data-compiling service they had bought back in 1984. Price claims she had agreed to the proposal Rappaport had written, but he had signed her name to it--which he denies--and sent it out without showing it to her. The next day Gupta called to discuss the proposal. Rappaport was out golfing, so Gupta spoke to Price. Caught off guard, she put him on hold while she grilled Rappaport's secretary about the agreement. Price says she didn't care that Rappaport had signed her name. She simply wanted to see final agreements before they went out. "These are not big issues," says Price. "The point is that I saw the handwriting on the wall.
"Finally," Price says, "I just said, 'Look. I can't work with you anymore. You either give me an offer that works or I'm going to execute our buy-sell." Rappaport still thought it could work. On August 15, 1994, wanting him out, Price put into play what she believed to be her only option--the buy-sell agreement. Offering more money than she thought Rappaport would pay for ALC, she set a price she could live with if he did. "I came up with what the company was worth to me to sell my half of it to him," explains Price. "And I executed it because at that point I was willing to take the money and leave rather than have to work one more day with him. He had to either match the amount I came up with or leave in 45 days. We were at an impasse. If we hadn't done that, we could have destroyed the company." Price put up her half of the proceeds from the sale of Zeller and Letica and lined up a key supplier to invest the rest. The buy-sell agreement included a stiff seven-year noncompete clause. Assuming the business would be hers, Price had little problem with the provision. She had created it. "I didn't want my former husband taking millions of dollars from me and then surfacing again, trying to start a company to compete with me," she says. Price confidently bet the farm.
