“Really? There’s a way?”
At my question, Frederick lowered his already deep voice even further and said,
“Remember when the co-op canceled its guarantee last year and tried to strangle me? Back then, I had to repay two million dollars, and I even got help from you.”
“I know that well. Ah, that’s right. That means you’ve secured equity.”
“Exactly. It was hard, but ironically enough, it means the mortgage on the land—our farm’s most crucial asset—was completely cleared.”
Hearing that, I realized Harris Farm’s collateral power was in better shape than I’d thought.
“Oh, then you’re not in that difficult a situation, are you? No matter how conservative banks have become because of subprime, that applies to new loan standards. They’ll be relatively lenient with loans backed by prime assets that already have zero debt.
On top of that, the record of having repaid two million dollars in a lump sum during a time when everyone’s struggling because of subprime will work as a significantly positive factor.”
The bank would probably evaluate Harris Farm as one of the rare prime clients with tremendous cash mobilization capacity.
“Right. And since the burden of monthly principal and interest repayments is gone, our available cash flow is in much better shape than last year.
So borrowing a few million dollars through a loan wouldn’t be too much of a burden. Of course, all of this is because cherry prices have risen tremendously.”
That was true. The reason all of this was possible was because cherry prices had skyrocketed. The moment they handed fifty tons over to Itochu Corporation at $8.50 per pound, they would have about $950,000 in cash in hand.
If they had handed them over to Redwood, they wouldn’t even have received $300,000, so it was possible to roughly guess just how much Harris Farm would benefit from this cold-weather damage.
Frederick, beaming with delight, continued.
“First, I’m thinking of taking out a loan with the land as collateral, then getting a letter of commitment from Itochu and using that as collateral to pull in a short-term bridge loan from the bank.
With Wells Fargo, even at worst, we should be able to arrange about two million dollars. With that much... we can purchase around a hundred acres.”
“Ah, will that be enough?”
“Haha, it’s incredibly cheap compared to Napa Valley, isn’t it? Normally, when it’s a farm with well-irrigated cherry trees of good age, it trades at around $25,000 to $35,000 per acre.
A farm in good condition would naturally be more expensive than that, but if it’s a farm up for a quick sale, it’ll be hard for them to get much more.
If things go well, we might be able to do it in the two-million-dollar range, but that depends on the farm owner’s circumstances. Any slight shortage can be covered with the additional cherry payments that’ll come in.”
The man’s confidence had a basis. So, since I was already there, I enjoyed a brief date with Chloe, then returned to the farm with an easy heart.
A few days later, the Brentwood Cherry Growers Cooperative office was wrapped in a gloomy silence.
The farmers who had once tilted glasses of whiskey in celebration of a bumper crop were now slumped at the shoulders, exhaling only cigarette smoke.
The auction notice lists posted on the office wall looked like lists of war dead.
When Frederick and Chloe entered, Samuel, who had been sitting in a corner, lifted his head. A shaggy beard and hollow eyes.
The pride of a man who had tended cherry orchards for generations over several decades had already been washed away by the massive waves of the worst cold-weather damage in a hundred years and subprime.
“Frederick... I heard your farm was safe. What brings you all the way here? Did you come to bid on my farm equipment?”
At Samuel Reed’s self-mocking question, Frederick sat down across from him without a word. Chloe quietly took a bundle of documents from her bag and placed it on the table.
“Samuel, if your farm goes to auction, the bank won’t recover even sixty percent of the land’s value. Not a single penny will be left in your hands. But I’ll make you an offer. Of your 1.5 million dollars in debt, I’ll immediately refinance the overdue interest and part of the principal.”
The gazes of the other farmers in the office gathered on them. Samuel looked at Frederick with eyes full of humiliation.
“You weathered the frost damage all by yourself and monopolized the wealth of cherries, and now you’re going to swallow up farms?”
“Wasn’t your farm already up for sale anyway?”
When Frederick glanced at the auction notice list posted in the cooperative office, Samuel’s face twisted even more.
It was bad enough that his own land was included on that auction notice list, but he had never imagined that the buyer would be Harris Farm, which he had believed without a doubt would go under not long ago.
That was why his pride was being crushed all the more.
“How much did you sell them for? Five dollars? Six? I even heard rumors that some places paid seven.”
“Roughly around there.”
It wouldn’t matter much even if he told him, but there was still no reason to expose the unit price to outsiders exactly as it was.
“Hmph! You must be thrilled.”
“I know it’s hard. I know how much the bank must be harassing you right now. From what I hear, your situation is the most urgent.”
Even before Frederick had come here, he had already decided in his mind whose land he would buy. A tract of land almost attached to Harris Farm, with a fairly large parcel as well, amounting to roughly 110 acres. It was impossible not to covet it.
On top of that, he had heard that the loan amount was as much as 1.8 million dollars. If he had taken out a 1.8-million-dollar loan on 110 acres of land, then not only had he maxed out the loan limit using the land as collateral, there was a high possibility that accounts receivable and other collateral had also been attached.
That was likely why the bank had posted the auction notice list in the cooperative office and included Samuel’s farm on it.
“So why not sell the farm to me? If the auction proceeds, the value of the farm will fall far below what I’m offering.”
If the auction proceeded, even Frederick would have difficulty guaranteeing he could win the bid. That was why, if possible, he wanted to take over the farm cleanly before it went to auction.
“Who knows. I might be able to sell it for more.”
Even though he clearly knew the truth, Samuel was playing hard to get because, at the very least, he didn’t want to sell the farm to Frederick. Rather than any other reason, it was simply because his pride was wounded.
At that moment, Chloe, who had been sitting quietly beside her father, opened her mouth in a calm voice.
“Uncle Samuel, there’ll be a delay of one or two months before the auction begins. If that happens, naturally, late interest will accrue.
We don’t intend to simply take over your farm. In exchange for handing the farm over to us, you’ll be employed as the chief manager of the ‘Harris-Redwood Allied Farm.’
You’ll receive a salary, of course, and later you’ll also receive part of the farm’s profits as a performance bonus.”
“A manager? You’re telling me to work as a servant on my own land?”
Samuel’s face flushed red. But Chloe did not back down. Just as she had learned from Brian, she spoke coldly and clearly.
“Decide whether you’ll protect your pride and end up on the streets, or bend your pride a little and protect the land. If you join us, we’ll also put in the contract a right of first refusal allowing you to buy back your stake in five years.
The land will belong to Harris, but you’ll continue farming it.”
Samuel’s eyes shook violently at the unexpectedly exceptional conditions.
“...The condition that I can buy it back in five years—is that true?”
“We’ll state it in the contract. We’ll also have it notarized in the presence of a lawyer.”
The conditions were so exceptional that the other farmers began murmuring. Some cursed Frederick as a traitor, while others let out sighs mixed with envy toward Samuel.
On the other hand, Chloe’s eyes as she watched the wavering Samuel were frighteningly cold. Her offer to give Samuel the right to buy the farm in five years looked, on the surface, like an incredibly exceptional condition that made buying the farm immediately seem as though it wasn’t a big gain, but hidden within it was a terrifying psychological strategy she had learned at school.
For his farm to be sold to Harris Farm, the only farm in the Brentwood area to avoid the cold damage, was not merely a matter of avoiding loss—it was something that would inflict a deep wound on his pride. If they proceeded that way, he might choose bankruptcy instead or try to find another buyer.
The clause allowing him to buy it back in five years was a kind of hopeful torture, making Samuel fall under the illusion that “this isn’t a sale, but simply entrusting it for a while.”
“Then how much would I be able to buy it for?”
Chloe answered calmly.
“We’ll compare the current purchase price plus interest and the cost of facilities invested during that time with the market price five years from now, and decide on whichever price is higher.”
“So if the land price stays the same, you’ll take the purchase price plus interest and facility costs, and if the land price rises, you’ll take the increased land price?”
“Isn’t that much reasonable?”
At her exceedingly reasonable logic, Samuel also nodded. But Chloe knew. He would never be able to buy the land back.
Could an ordinary person without a farm prepare a sum close to three million dollars in five years with weekly wages? If that were possible, there would be no one in the world who wasn’t rich.
“Hmm... Fine. If you state in the contract the right of first refusal that allows me to buy the farm, I’ll hand it over.”
At those words, Frederick said it was a good choice and offered Samuel a handshake, while Chloe drew a thin smile at the corners of her mouth.
‘Good. Someone like Samuel will make a decent worker.’
For Chloe, who had to take care of both the pear orchard and the cherry farm, skilled laborers and managers she could trust to leave the farms to were necessary.
Now that she had made Samuel believe, “I’ll get my land back someday,” he would manage it with all his effort, as if he were tending not someone else’s land but his own future land.
And her father, too, would not gain the image among the cooperative members of a predator who seized land by taking advantage of his neighbors’ misfortune.
“Um... by any chance, are you thinking of acquiring any farms besides Samuel’s?”
To the point that even cooperative members offering their own farms began to appear.
“Ah, Mr. Jack... the location is a bit far from Harris Farm... And it’s large, isn’t it? I understand it’s around 130 acres?”
“Is it too far?”
“Yes. Unfortunately...”
“Then how about us? It’s only eighty acres, not that large. To be honest, I was old and wanted to sell it anyway, but I kept running it as if it were exercise. After getting hit by frost damage once, all my affection for it vanished. I’ll give you a good price. Instead, can you put in a right for my son to buy the land later?”
“In that case... would you take a seat first?”
In this way, Frederick and Chloe, right there in the cooperative office, drew up preliminary contracts to secure around two hundred acres of new farmland.
Now, once a few days passed and a perfect contract was drafted through a lawyer’s hands and money changed hands, Frederick and Chloe’s farm would become twice as large as it had been before the cold-weather damage.
“How on earth did you think of something like that?”
Frederick asked his daughter on the way home.
“My professor at school taught me. There’s a professor who resembles someone.”
“Who does he resemble?”
“There is someone. That unpleasant man in France. Anyway, I did well again this time, right?”
“Yes. You’re my daughter, but you were frightening earlier.”
“Heeheehee.”
The Brentwood Cherry Growers Cooperative after the father and daughter had left. A large middle-aged man trudged into the place.
“Chairman...”
A pitiful light appeared in the young employee’s eyes, because the face of William Hartford, the cooperative chairman, had rotted away to that extent.
Having personally cut down a significant portion of the trees on the farms he owned, he had become a completely different person from a few months ago.
Even his body, which had seemed ready to burst, now looked noticeably smaller, perhaps because of the stress he had endured. His health might seem to have improved, but his body had undoubtedly grown worse from stress.
“Anything happen?”
“Actually, Mr. Frederick and his daughter came by earlier...”
“What? Why did someone who isn’t even a member of our cooperative come here?”
The young employee flinched at his suddenly distorted face, then soon spoke in a voice that seemed to crawl into the floor.
“As you know, Chairman, the bank posted an auction notice list at our cooperative, didn’t it? He visited in order to acquire one of the farms on it.”
“Which farm?”
“Mr. Samuel’s...?”
“What did you say?”
Startled, he called Samuel. Samuel was one of his close aides, and if he left the cooperative, it would put him at a great disadvantage in the next chairman election.
But...
“Beep... beep...”
Samuel did not answer the phone. All the strength drained out of him, and he collapsed onto the sofa.
“Frederick, that son of a bitch...”
He bitterly resented Frederick for taking away even Samuel, who should have continued to be a source of strength for him.