She smiled at his candor and knew he wasn’t joking. She asked, “When Kirk and Rusty go visit Bolton, don’t they take the current financials?”
“Among other things. Bolton wants the prior month’s profit-and-loss, and year-to-date. Says he wants to know what’s happening in ‘his firm.’ Rusty went last month and according to him the old man wasn’t too happy with the numbers. Rising overhead. Declining income.”
“Why does he worry? He’s not coming back here. He’ll never get his license back, plus he’ll have the tobacco money.”
Old Stu smiled and repeated, “The tobacco money.”
（17）
The tobacco money.
In 1998, the four largest tobacco companies in America agreed to settle a series of massive lawsuits brought by forty-six states to seek reimbursement for the medical costs of smoking. The amount was over $300 billion, the largest civil settlement at that time. The companies also agreed to pay over $8 billion to the lawyers who had cooked up the litigation and brought the industry to the bargaining table. This, obviously, was an unheard-of bonanza for the plaintiffs’ bar, or at least for those lawyers who had rolled the dice and signed on early.
A trial lawyer friend he admired had convinced Bolton Malloy that the litigation was worth the risk. In the beginning, the lead lawyers desperately needed cash to fund the ever-expanding litigation, and they were passing the hat and rounding up investors. Bolton wrote a check for $200,000, over the objections of his two sons and everybody else in the building. Four years later, the tobacco companies, always on the defensive, wanted a truce and were willing to pay for it.
In the frenzy that followed, some lawyers got filthy rich. Those at the top of the pyramid had put serious skin in the game and taken enormous risks, and they were compensated first. One small firm in Texas was awarded $500 million. The money flooded down to the others and the payouts were based on the amounts invested. Bolton’s share came to $21 million, money he planned to keep for himself.
As usual, his wife knew little of the firm’s inner workings because Bolton had always tried to keep her in the dark. He put a lid on the settlement gossip and refused to talk about it, though he privately reminded his two sons that they had scoffed at the tobacco litigation and warned him to stay away from it. Bolton wanted a divorce but couldn’t stomach the thought of a protracted fight with hungry lawyers poring over his records.
Buying into the lawsuit proved to be his first brilliant move. His second was to defer payments of his fees and structure them so that they would be invested but not paid for ten years. Maybe in the meantime he could get a divorce, or even better, maybe his wife would just up and die. Her health was fragile.
Then she did die, rather mysteriously, without ever seeing the money, and Bolton went to prison for manslaughter. He’d been there for a month when the tobacco checks started arriving—$3 million a year for at least twelve years. Old Stu set up offshore accounts around the world and routed the money through a maze of entities that a hundred IRS agents couldn’t follow. He showed enough real income on the firm’s books to placate the tax collectors, but the vast majority of the tobacco money was piling up in shady havens where there was little regard for U.S. tax treaties.
Their secret plan was simple. As soon as Bolton got out of prison he would disappear, hopefully with a young blonde on his arm, to some exotic playground where he would retrieve his money and watch it grow. For his troubles, Old Stu would be handsomely compensated and retire in style as well.
Legally and ethically, the money belonged to Malloy & Malloy. All of it. And, technically, it was unethical for lawyers—Rusty and Kirk—to split fees with non-lawyers—Bolton. But the legal and ethical niceties were being ignored and the sons were simply unable to agree on how to confront the father.
A confrontation, though, was inevitable.
（18）
Diantha said, “It’s only a matter of time before they’ll want some of the money, you know?”
“I’m sure they will,” Old Stu said with a smile. “But they can’t find it.”
“Well brace yourself, because they’re coming. The firm is losing money. Both of them are heavily mortgaged. And now Kirk wants a divorce, which means some nasty boys will soon be going through your books.”
“Listen to me, Diantha. There’s a lot of shady stuff in those books. I know because I put it there, at my client’s insistence, of course. But I am not going to prison like my client, or because of my client.”