Chapter 11 - THE ROLLINS DEAL
Rollins Coastal was a real company.
Good company, actually.
Eight beach resorts.
Strong occupancy.
Weak debt structure.
Underinvested properties.
Bellamy Lodging could improve operations.
Independent valuation:
$28–33 million.
Lorna’s proposed purchase valuation:
$31 million.
Reasonable.
That surprised me.
No inflated fake purchase.
The conflict lay elsewhere.
Her brother’s consulting agreement after sale:
$3.8 million over three years.
Independent fair range:
$1.2–1.9 million.
Excessive.
Lorna’s family interest would receive favorable debt repayment ahead of other sellers.
Problem.
The $8 million reserve contribution structure also favored Rollins insiders.
Review improved terms.
Her brother resisted.
Then accepted after lenders pressured.
Final Bellamy investment:
$17 million, not $20.
Independent financing for remainder.
Consulting agreement:
$1.5 million.
Standard performance metrics.
No special household reserve contribution.
Estelle trust approved.
Arthur explained to me:
“The point was never to say no.”
I nodded.
“Review.”
“Exactly.”
The deal closed nine months later.
Profitable within three years.
May you like
Lorna had almost destroyed a good transaction by trying to avoid the process that made it better.
Control often mistakes speed for competence.
