Arbortext Accounting Fraud #42: The Extraordinary Fear of Arbitration

Chapter Forty-Two

The Extraordinary Fear of Arbitration

 

I went outside when Mary got on the phone for the Arbitration conference call. I didn’t want to screw her up with some goofball facial or bodily reactions.

Besides, the phone call would go faster if I wasn’t listening in. It was like grass. If you watched it grow, it wouldn’t. Or your favorite football team. If victory was improbable, it could only be achieved it you turned off the TV and didn’t watch it happen.

It was a tip about life I would have passed on to my son if I’d had one. JohnPaul was my stepson, but step tips didn’t work. They lacked the blood bond that could make a kid actually believe some total horse malarkey idea from his old man. Step kids always rolled their eyes at step tips. It had been kind of disappointing to me to find out that being a stepdad didn’t carry any automatic powers that made a kid your own personal totally gullible disciple. It was probably a relief, though, too. He couldn’t blame anything in his life on a misplaced trust in me.

Mary came outside after the phone call. She had a tossed salad face. I couldn’t tell if there were too many carrots or not enough tomatoes.

She walked over and sat down next to me on the swing. It wasn’t as good a swing as the one we had at Court Lane, but it was good enough. It was a swing. They were all good. Except the ones that were tires hanging from a tree limb by a rope. Those were torture chambers you stuffed fat kids into when you were feeling really mean.

She adjusted her legs four or five times, and stared off into space.

“Well?” I asked finally. Mary liked to make me sweat a little before delivering news. It was the cat in her. She liked to toy with my brain like it was a ball of yarn. It had taken me awhile to learn to be patient with my impatience. She was always happier after a little harmless toying around. And my brain didn’t work any better or worse whether it was raveled or unraveled.

“It went okay, I think.”

“Great. Did they apologize profusely and put the check in the mail?”

“Palizzi dropped all his counter claims and reduced it all to one. He wants Humphrey to dismiss the whole case since the one year statute of limitations in the contract has expired on our complaints.”

“So Cimino’s assurance that the stockholders would want Parametric to pay us if we were owed any money was a crock of beans. They don’t even want to find out if they owe us anything. They just want to cover up the whole mess. No surprise there. The higher up you go in a company, the bigger the liar you’ll find. There seems to be some sort of direct correlation between power and baloney.”

“Palizzi even told Humphrey point blank he would appeal her decision if she ruled against him.”

“He threatened her? Whoa. Did she give him the finger?”

“She was a little cheeky. She asked him what about the other nine points he had made in his filing. He stuttered around and said, well, you know. Right, she said. Then she said she wasn’t born yesterday. She asked Palizzi if she granted his motion was he saying that there wouldn’t be anything left to deal with. He said no. She sort of mused out loud that it could be argued that this was all an on going thing. I said that at least a year existed under the contract for us to have arbitrated, so how could the whole case be dismissed. I also reiterated that this was indeed an on going dispute, not a one time event several years ago. It happens every time they send us a Royalty Report.”

“What’d Palizzi say to that?”

“He just kept saying, nope, nope, none. Pretty cocky.”

“What happened to the nice guy with twins?”

“I guess that was off the record. He’s just doing what Parametric wants him to do now. It’s his job.”

“Wonderful. Hi Mary one minute and erase you the next. Do these guys have an on/off switch for human versus ruthless mode? What did Humphrey decide?”

“She asked me if I understood what he was asking. I told her yes, he wanted to file a motion to dismiss the case and that I’d anticipated that this might happen. I said if he was going to do that, I would need to see the Plante Moran audit Working Papers from Mark Robinson in order to properly respond. I don’t know where the inspiration for that came from. It just popped out of me.”

“Didn’t you and Palizzi already discuss getting those papers?”

“Yeah, but he refused to cooperate without the Arbitrator okaying it. Humphrey asked me if I thought Palizzi would be enlightened by the Working Papers. It was kind of a weird remark. I said I didn’t know what was in them, so I couldn’t say.”

“What do you think is in them?”

“Hopefully, some explanation to the difference between what Robinson told me on the phone and what he wrote in his report. The “significant discrepancies“ between the Sales Database and the License Key database. Humphrey said she tended to agree with me and asked Palizzi what he thought. He started stammering like mad and said it might be boxes and boxes of stuff that would take forever to go through and it would cost his client a lot of money for his time.”

“You’ve got to be kidding. He wants mercy for Parametric’s poor billion dollar wallet?”

“Humphrey laughed at him and said she hardly thought it would be boxes and boxes. She okayed it, Steve. It was a huge win for me.”

”I told you you’d do great.”

“It’s all so weird. We have a contract governed by Michigan law, using Michigan lawyers, and arbitrated in Michigan, and I’m not even a lawyer.”

“And we’re in a trailer park in California, roughly two thousand three hundred and thirty-seven miles from the scene of the crime.”

“You’ve been MapQuesting, I see.”

“Google Maps. I love that program. You can use the Satellite view and see our RV sitting here with cigarette smoke wafting out the window. If I could find out when the satellite photo gets taken, I could climb on the roof and bare ass the world.”

“You would think of that. Thirty years ago, you’d have put a Peace sign up there.”

“Ouch. You’re right. I’ve been degraded by life.”

“I don’t think you can blame it on life.”

“So what’s the next step?”

“Palizzi gets two weeks to file his Motion to Dismiss. Then we get two weeks to file a reply and he gets two weeks to file a reply to our reply and two weeks later, on April 3^rd, we have another phone conference and she announces her ruling.”

“He gets two filings and we only get one?”

“That’s the way it works.”

“When do we get the audit Working Papers?”

“Right away. I’ll send an email to Mark Robinson tomorrow.”

“So if Humphrey denies Palizzi’s Motion, he doesn’t have any cross complaint left?”

“Yep. Nothing. The next step would be Discovery. We’d give her a list of all the things we want to examine and she’d decide how much of it to allow.”

“Then what are you worried about?”

“What makes you think I’m worried?”

“You’re talking too slow, there’s a wrinkle over your eyebrow, and you’re looking over my ear top when you speak.”

“Your ear top?”

“Yeah. You know, past me. The old out of focus deal.”

Mary laughed. “Okay Sherlock, you’re right. I am worried. About Humphrey. How can she entertain a motion to dismiss the whole case, based on a clause in the contract when that same clause clearly gives us the right to arbitrate at least for a one year period. I guess I could have argued against allowing the motion, but that would have led to having to argue the technical points on the spot with Palizzi, which I might have botched without some legal help at my disposal. By allowing him to argue it in writing, I got Humphrey to okay me getting the Working Papers.”

“Parametric is having the same fear of arbitration as Arbortext did of audits.”

Mary changed the subject. “I ran across an advertisement for a PTC User World Event schedule the other day about the user group conference concerning Parametric and Arbortext. Sterken’s partner Paul Grosso is a Doctor and still prominently around, even a featured speaker at the event, but Sterken was just lumped in with some other leftover Arbortext personel and did not appear to be a speaker of consequence.”

“He’s becoming de minimus.”

“I’d say so. Actually, that’s been happening since the venture capitalists broke out their wallets in 2000 and immediately replaced him as the CEO.”

“Smart move. They’ve gone from a failing business to a big winner since that decision.”

“Blueberry had something to do with that. And some creative bookkeeping.”

“Let’s hope the Arbitrator manages to grasp that.”

To be continued . . .