Reborn in America, I am a legendary short seller on Wall Street.

Chapter 152 20% Stake in Ford Motor Company

At 6 p.m. the following evening, Henry Ford, carrying the blueprints of the "Ford Model A" and some necessary supporting documents, pretended to be a resident of the Astor Hotel and fooled the waiter at the door before leisurely walking to the bar area on the first floor where the signing was to be arranged.

As soon as I reached the door, I saw Mr. Gore and two other well-dressed gentlemen chatting in the booth aisle.

Henry Ford smiled and hurried a few steps closer, bowing and greeting Mr. Gore.

Mr. Gore's face also showed a look of surprise, and he looked at Henry Ford as if he were looking at a stack of walking dollars.

“Mr. Ford! Please have a seat!” Gore smiled and led Henry Ford to the seat opposite him in the booth, his expression much more polite than yesterday.

Henry Ford was somewhat flattered and quickly said with a smile, "Mr. Gore, I'm sorry to have kept you waiting!"

Mr. Gore waved his hand and said, “It’s alright! It’s alright! Let me introduce you. This is a lawyer from the Hawkins Law Firm, and this is my friend, Mr. William Wallace!”

Henry Ford first greeted the lawyer politely, then looked at the tall man named "William Wallace" and greeted him again.
"It's a pleasure to meet you, Mr. Wallace. It's a great honor to meet you."

Wallace smiled and shook Henry Ford's hand, then sat down next to Mr. Gore.

Gore glanced at Mr. Wallace, gave him a polite smile, then turned to Henry Ford and said,

“Mr. Ford, why don’t we begin now? I’ve had my lawyer draft a nominee shareholding agreement, and there’s also a share purchase agreement between the two of us. You might want to take a look at both of them first.”

Henry Ford straightened up, took out a pair of glasses from his pocket, solemnly accepted the contract handed to him by the lawyer, and began to read it carefully.

The contract is explicitly titled "Equity Trust Holding Agreement".

Mr. Ford continued reading; the client was Freeport Cornerstone Holdings...

“Wait a minute, Mr. Gore!” Henry Ford frowned and looked at Mr. Gore, asking, “Shouldn’t the client be listed here as your name? Why does it say Freeport Cornerstone Holdings?”

Mr. Gore was well-prepared and said frankly, "This is my family company. Do you think I can afford to invest alone? Of course not. I am also looking for ways to cooperate for the family fund. When we talk about specific shareholdings, the family company will naturally provide the funds. You understand the logic, right?"

Henry Ford nodded. These days, it wasn't uncommon for family companies to make investments. Since Mr. Gore said it was his family company, then it must be true. Besides, there was no reason for the other party to deceive him by using the client's name.

Mr. Gore waved his hand and said, "Keep reading!"

Henry Ford nodded and continued reading the contract.

Party A: Freeport Cornerstone Holdings.

Party B: Henry Ford, nominee shareholder, identity, business partner.

Following the identification of both parties is the detailed section on the nominee shareholding arrangement.

Target company: Ford Motor Company, registered in Boston.

Equity Ratio: It is specified that the original investment amount corresponding to 20% of the shares is US$30,000. Party B shall deliver the paper stock certificate to Party A after actually holding the equity.

Holding period: 3 years.

Regarding specific rights and obligations, during the period of stock holding on behalf of another party, Party A enjoys the right to dividends and ownership of capital gains from 20% of Ford's equity, while Party B is required to vote in accordance with Party A's written instructions.

Three years later, Henry Ford, the second party, shall transfer 20% of his shares to Freeport Cornerstone Holdings, the first party, and the first party shall pay a one-time holding fee of 10% of the total value of the shares held on his behalf.

Party A has the right to require Party B, Henry Ford, to sign the equity transfer agreement as soon as the equity becomes transferable.

Regarding the specific profit distribution: Party B, Henry Ford, shall deliver the company's profit distribution to Party A, Freeport Cornerstone Holdings, within 3 days of receiving it. Any overdue payment shall incur a late payment fee of 8% per annum.

Tax liability: Party A shall bear the relevant taxes and fees, and Party B may be reimbursed after making the advance payment.

In addition, the contract also stipulates the legal handling of special circumstances, namely, if the company issues new shares, Party B shall subscribe on behalf of Party A to maintain a 20% equity ratio, otherwise Party B shall compensate for the loss of equity dilution.

If Party B passes away, the shares held under the nominee agreement will automatically be transferred to Party A's name and cannot be divided as part of the estate.

After both parties sign the contract, it must be witnessed by a notary and filed with the Zhou government.

Henry Ford spent a long time reviewing the documents and found that they were largely similar to the nominee shareholding agreements he was familiar with. He clarified a few points he didn't understand by consulting his lawyer. In addition, there was a "Share Purchase Agreement," which was relatively simple. It stated that Freeport Cornerstone Holdings, the first party, purchased 20% of Ford Motor Company's shares from Henry Ford, the second party, for $3.

In addition to the main contract, the rights and obligations of both parties and fair terms were also specified.

After reviewing the two contracts, Henry Ford removed his glasses and solemnly stated, "Mr. Gore, I would like to add a clause. If I am unable to transfer 20% of the shares after three years, I will pay a penalty of double the amount!"

Mr. Gore did not reply to this, but instead turned his gaze to his "friend," Mr. William Wallace.

William Wallace coughed lightly, a slight smile playing on his lips, and said calmly,

"Mr. Henry Ford, if I'm not mistaken, what you're implying is that three years later, or when the company's shares become transferable, you can pay double the penalty to avoid giving up those 20% of the shares! Is that what you mean?"

Henry Ford blushed and quickly explained, "No, that's not what I meant!"

William Wallace looked at Henry Ford, raised an eyebrow, and said, "In fact, that's exactly what you mean! If your shares are worth something in three years, then consider it a loan with a 30% annual interest rate to repay my friend Mr. Gore $6, and that's it..."

“No, no…” Henry Ford muttered softly.

Henry Ford's point was essentially this: if the car company failed, or even went bankrupt, fine, you want equity? Take it. Don't just say 20%, take all 50% of my shares. They're worthless anyway.

But if the company really succeeds, then I'm sorry, I'll just put in $3 to compensate you for your losses, and you can forget about your 20% equity stake.

In the end, it really was just as William Wallace said: he treated it as if he had borrowed a loan with a 30% annual interest rate.

If the car company could really succeed, Henry Ford wouldn't care about the extra $3.

He had already calculated based on the car production volume that if the designed production volume could be reached by the third year and the cars could be sold, he would not feel any pressure paying the $6.

Henry Ford originally intended to include this clause as a backdoor to quietly reclaim his shares in the future, but little did he expect that his carefully crafted breach of contract clause would be immediately seen through by the other party.

William Wallace glanced at Henry Ford, a smile spreading across his face, and said to himself,

“I advise you not to get involved in that scheme. My friend values ​​your car company; even if your car company goes bankrupt in the future, he is willing to use $3 to buy this 20% stake. That shows his confidence in you, doesn’t it?”

As he spoke, William Wallace glanced at Ford and continued,
"This project is led by you and is of great importance. If you don't have confidence in yourself, why are you selling your shares here?"

Henry Ford thought for a moment, then sighed and said, “That’s not what I meant, but I think… there has to be an unexpected clause. Besides, how can you have so much confidence in my company? To be honest, I don’t have that much confidence myself.”

Mr. Gore didn't speak, but kept looking at William Wallace.

Mr. Wallace said solemnly, “Mr. Ford, you must have confidence in yourself. To be honest, my friend is determined to have your 20% stake. He doesn’t care about the fines; he just wants the shares!”

After listening, Mr. Gore nodded vigorously and said, "Yes, I want the shares! Even if those shares become worthless pieces of paper, I still want them. Isn't that enough sincerity?"

Henry Ford thought for a long time, then sighed deeply and looked at Mr. Gore with a mournful expression.

"...Sir, that's too cheap! My shares! That's 20% of my shares! Are you really going to throw them away for just $3? I'm not willing to accept that!"

Hearing this, Mr. Gore also frowned and said loudly, "Mr. Ford! How dare you say this... You betrayed your partners and bought shares here in secret. Do you believe I will expose this to your partners if you don't sell me this 20% stake?"

Henry Ford turned pale and slumped back into his seat.

William Wallace, seeing this, smiled and thought to himself that it was time to offer a reward. So he said,
"Alright then, Mr. Ford, there's no need for such lamentation. I suggest Mr. Gore offer another $10,000, making it $40,000, for 20% of your shares. How about that? Although it's less than the $50,000 for 15% you previously mentioned, I suggest you accept this offer. Otherwise, if my friend tells your partner about this, you'll be in deep trouble..."

After speaking, William Wallace looked at Henry Ford and said in a seductive tone,
"Sir, add another ten thousand dollars! That's quite a lot, isn't it? Besides, as you said, you're not sure if this company can really succeed. We might spend 4 dollars and end up with just a piece of waste paper, wouldn't we?"

Henry Ford thought for a long time, then sighed deeply and said resentfully, "Sigh... what can I do? I'm just short of that $5000..."

He then turned to look at Mr. Gore and Mr. Wallace, held up five fingers, and said, "Alright! Just as you said, I'm really selling this 20% stake. I won't take it back even when it expires, but you'll have to pay an additional $5000!"

Mr. Gore listened and turned to look at Wallace. The latter smiled, nodded slightly, and said...
"Deal! My friend, I'll buy your 20% stake in Ford Motor Company for $45,000! No backing out."

　I'm sorry, there's really no time, so I'm sending this first and will revise it later. I've been too busy these past few days.

　　
　
(End of this chapter)