THE FIXER, PART I

In the heart of River City works a man who provides valuable services to the local bigwigs when they run into financial trouble.  This man from Memphis got himself a law degree and eventually landed a job with the premier law firm in the area.  In time he became the firm’s boss.  From there he ingratiated himself with G.R.’s movers and shakers, fixed their problems by hook or by crook, and collected his fees or garnered himself sinecures in the organizations they controlled.  His clientele involved the big-name institutions of the city’s recent past:  Autodie, Butterworth Hospital, Old Kent Bank, Amway.  Now they are all gone, and this man has been a part of each vanishing act.

Say hello to Charles a.k.a. "Charlie" McCallum, senior partner and former managing director of the law firm Warner Norcross & Judd L.L.P.  He was also the long-time chairman, corporate secretary, and legal counsel for Butterworth Health Corporation until he helped Amway-founder Rich DeVos to devour the hospital in the Spectrum merger.  Once the job was done there, DeVos gave Charlie his next big gig:  The fincancial work-out of Amway into oblivion, for which Charlie was rewarded with a plum corporate office in its successor, Alticor Inc.

No doubt Charlie will tell you all of this is quite above-board, even if he’s not bragging about it.  After all, he’s the American Bar Association’s authority on professional ethics.  True, there’s nothing inherently sinister about mergers and work-outs, even when lawyers get involved in them.  So let’s take a closer look at some of Charlie’s work for River City’s bigshots before drawing conclusions.

THE FALL OF AUTODIE ... AND THE RISE OF AUTOCAM

At one time Autodie Inc. was the world’s largest tool and die manufacturer in the world.  Joe Spruit founded the company in 1962 starting out in a small shop in the Monroe North industrial district just north of downtown.  A quarter-century later Spruit –- along with a hot-shot financial whiz kid riding shotgun as CFO (that would be, of course, John Kennedy of Autocam fame) who took Autodie public and then leveraged those proceeds with a huge mountain of bank debt –- was king of Monroe North.

Spruit had greatly expanded Autodie to occupy three city blocks under the roof of one plant.  He also owned or controlled most of the northern half of Monroe North and had planted his flag in the southern half with the large Autobond plant (now part of Grand Rapids Spring & Wire, and the site of the latest gasp in the death knell for manufacturing in Monroe North).  He had a grand vision for Monroe North, including a marina on the Grand River!  He even managed to get the City of Grand Rapids to re-do its master plan to accommodate him.

However, by the early ‘Nineties, Spruit, his pride and joy Autodie, and his plan for Monroe North were in ruins.  Blinded by boy-wonder Kennedy’s financial voodoo, the old man lost his focus upon his core business, became enamored with (and indebted by) the baubles of wealth and fame, and allowed his empire to collapse into bankruptcy.  Yet today Spruit enjoys a comfortable retirement in the luxuriant (and pricey) north country of the Lelanau peninsula.  How did that happen when the Autodie bankruptcy flushed $140 million of debt down the drain taking down with it the local shareholders of Autodie, the company's loyal employees and their pensions, and the small businesses who had supplied Autodie on credit?

Through a perplexing maze of transactions, Spruit retained at least a partial hold upon many of the shattered pieces of his Monroe North empire.  The pieces were desired by others, and Spruit had a good lawyer to help him transfer those pieces to his benefit.  That lawyer was, of course, Charlie McCallum.  Apparently confident that he could deliver Spruit from his financial woes, Charlie had his law firm Warner Norcross work on credit and agree to get paid on the back end of Spruit’s financial work-out.  As security for this deal, Warner Norcross laid claim to one of Spruit’s industrial properties outside of Monroe North.  Charlie then went into action.

One man who wanted to be clear of the Autodie whirlpool of bad debt that was sucking in everything around it was Kennedy, the former Autodie CFO and architect of the financial fiasco.  While CFO Kennedy had cleverly managed to separate from Autodie one of its subsidiaries called Autocam Corporation.  It was a lifeboat for Kennedy.  With it he cut loose of Autodie ahead of the bankruptcy and would later make tens of millions of dollars through financial manipulations of Autodie's erstwhile subsidiary.  (Of course, none of the Autodie shareholders, employees, and suppliers who had a hand in making Autocam possible in the first place ever saw a dime from those millions.)

However, the title to the new machinery and supplies equipping Autocam upon Kennedy’s acquisition of the company was not clear.  If the equipment had been purchased by Autodie and simply taken by Autocam, then Autocam would have been a debtor to Autodie.  That would mean Autodie’s creditors could then lay claim to.  Strangely, after the books were mostly closed on Autodie’s bankruptcy, Autodie revised its previous financial statements to reflect additional equipment debt in an amount similar to that of the equipment Autocam had been stocked with.  Exactly how this papering over of the problem passed muster with the trustee assigned to the Autodie bankruptcy has never been made clear.

Nevertheless, Charlie and Warner Norcross helped Autocam get clean of the Autodie bankruptcy, and they were in return rewarded with the highly remunerative work of Autocam’s initial public offering and later quests for capital.  Meanwhile, as tens of millions of dollars of capital flowed through Autocam's coffers in the wake of Autodie's collapse, the Spruit's interests in Autocam, now more highly valued than its parent Autodie ever was, have never been made public.  Whoever wants to know that needs to go to Autocam's and Spruit's attorneys at Warner Norcross, and they of course aren't talking.

However, much more than Autocam needed to be escape the Autodie whirlpool.  The Monroe North properties that formed Spruit’s empire were eyed by Butterworth Hospital as a location for a new campus.  Now that they were available, opportunity beckoned.  Fortunately, for Butterworth their attorney just happened to be Spruit’s attorney also.  But then it seems Charlie is everyone's attorney, and there hangs a tale.  Stayed tuned for Part II of “The Fixer”.

[Click here for the second installment of "The Fixer". - The Editor]

Comments

[Nancy Dodds]

Thanks for info Re;demise of Autodie Hear Autocam and John Kennedy lost ground this yr

[The Executive Director]

Thanks for thumb's up, Nancy. What has occurred has been a costly scandal for our town, and it is scandal that it continues to go unreported by the mainstream media.

Regards,
Bill Tingley
Executive Director