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October 25, 2012

A Fat Lot of Nothing: Romney's Testimony, Now Released, Called "Devastating" To Allred's Claims

Romney didn't testify at her divorce -- there was no hearing on it.

Rather, he testified in 1991, when the Former Mrs. Stemberg sought to re-litigate her original settlement. Romney was called in to talk about the value of the 500,000 shares in Staples she received. Or Stemberg's net worth. Something like that.

Her theory was that Stemberg had put up Romney to deliberately lowball the value of Staples. Like I've noted, this makes no sense -- if Staples stock isn't worth all that much, than The Former Mrs. Stemberg's shares from the settlement are worth less, and that increases the chances a judge would agree that the original settlement was unfair, and put it aside.

But whatever. Her claim rests on the idea that Romney knew Staples would grow in value, but lied about.

Here's the problem: As an initial investor, Romney had the option to buy a lot of Staples stock. If he really thought Staples were a surefire hit, he'd have exercised all those options, and bought as much stock as he was legally entitled to.

He didn't. He said Staples could grow, or could fail, because, apparently, he believed it could grow, or could fail. Thus he hedged his own bets, buying some Staples stock, but not as much as he was entitled to.

From the court transcript. The questions come from "Stemberg's lawyer," the article says, which I assume means Tom Stemberg, because this seems like friendly questioning. The answers are from Romney.

Q: "Thank you. Now, you say that before making the investment in Staples round C you read the statement 'Additionally, this is planned to be Staples final equity offering prior to a public offering of mid 1989.' And you say that you did not - Strike that. You say you read that statement. Let me ask you this, sir. Did you, therefore, as a result of that subscribe to the full amount to which you were entitled to subscribe?"

A: "I did not."

Q: "And why was that, sir?"

A: "Because while I believed that there was a realistic probability that we would achieve that outcome, there was also a realistic probability that we would either lose our money or we would achieve something less than that. And my personal assessment and that of my partners was that the risk that we would not achieve the plan was high enough that we should not subscribe to our full amount."

Q: "And you did not subscribe to the full amount?"

A: "We did not subscribe to the full amount."

The Former Mrs. Stemberg sold half of her shares before Staples went public. The price did indeed grow after that. Though, as a matter of fact, it seems to have grown by only modest amounts until it began taking off in the mid-nineties, then really jumped around 1998. The bigger growth came well after this 1991 relitigation.

The Former Mrs. Stemberg seemed to have done what Romney did -- hedged her bets by dumping half the stock early for some cash money, rather than pinning her hopes to an explosive gain in value. And she seems bitter about that decision of hers, and looking for someone to blame for her own decision.

If she'd kept all the 500,000 in shares, she'd be fabulously wealthy. She didn't, so she's not quite as wealthy.

She didn't have full confidence in Staples -- some, but not much. Turns out, that's the level of confidence Mitt Romney had in it, too, based on his own investments in the stock.

As Powerline says, what this has to do with Mitt Romney remains something of a mystery.

By The Way: I'm suuuuure this is nothing -- like, totes sure -- but Gloria Allred met privately with Barack Obama two weeks ago.

The Endless Divorce: And I do mean endless.

As I said, this divorce is now celebrating its silver anniversary -- its 25th anniversary -- and is as passionate as ever.

[I]t's hardly news that Stemberg believes she settled for too little.

"The entire spectacle is about her client's divorce, which began almost twenty-five years ago. It has been litigated and re-litigated," one source with knowledge of the the divorce proceedings tells me. "She has attempted to get her settlement overturned, but failed. She appealed the decision, and failed. She tried to take her case to the State Supreme Court, and was rejected. She has accused her husband and others of defrauding her, to no avail. She has sued her attorneys for malpractice, and lost. She has declared bankruptcy, and tried to sell her story as a book and a movie, also to no avail."

...

[T]he court rejected Sullivan-Stemberg's request [to set aside the settlement] in 1994. Instead, Stemberg-Sullivan was found to have sold her stock expeditiously, before it matured to what it would be worth only a couple years later. "[T]he wife cannot blame the husband for her uncoerced decision to sell approximately one half of her shares prior to the initial public offering of the Staples stock," the judge ruled. She had 500,000 shares of Staples, from the first divorce settlement.

Tom Stemberg was granted a divorce on grounds of "cruel and abusive treatment," incidentally.

I guess that just about wraps this up. Not only is it a non-story, I think it's pretty plain it's such a non-story -- at least about Mitt Romney; I guess there's a story here about one of the bitterest divorced women in recent history -- not even the Obama-loving media will take this stinky bait.



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posted by Ace at 04:03 PM

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