Junior," Mudge yelled into his speakerphone, startling the occupant of a brown aluminum cubicle on the third floor. "Run in here, would ya please?" Next to Mudge's speakerphone lay a Bible. Next to that was a photograph of Mudge and his current wife, his second, on their wedding day. Standing on the beach in formal attire, barefoot, they smiled as they released a cage of white doves. His desk was clean, save for a few crumbs of fried dolphin.

Mudge's office was a shrine to a life of recent success. Its size alone was enough to swallow a visitor's sense of place. Nothing of it spoke of Nashville. Cotton wasn't grown within 75 miles of the city, the domain of Memphis in the west. Yet here, in Mudge's office, every inch of wall space erupted in cotton-ball print. Not even the fondest grower of cotton in Memphis would have papered his walls with the stuff. But the motif had been suggested by Mudge's new wife, Anita. She was a recent graduate of the Middle Tennessee State University Design Institute. If she wanted cotton balls, so did he.

Mudge's massive desk gave no indication of having been made 300 years ago or yesterday. The monolith squatted on colossal wooden legs, its front crisscrossed with baroque etchings. Before it sat two hulking leather chairs, outlined in large brass buttons that, upon inspection, appeared to be knock-off Spanish doubloons. An additional, less formal seating area—two floral-print chairs, an off-white sofa and a wicker-and-glass coffee table—went unused on the far side of the room. Nearby, frozen in point, stood an entire stuffed deer. Whenever Junior saw that deer, he jumped in his loafers.

"Junior, what in the living daylights are you doing for me today, son?" Mudge asked rhetorically as Junior tiptoed in. His name was not Junior; it was Rhavi Prasad. But Mudge issued a nickname, he expected the recipient to wear it.

Rhavi didn't know how to respond. He was not good at small talk. Sometimes Mudge seemed to be nothing but small talk. "Talk to me, son, we got a city to build," he barked. "Wherever on earth did I get the likes of you working for me?"

Mudge was smiling, but Junior felt the dig. In business meetings, he had seen Mudge smile directly at people, even as he was preparing to eviscerate them. In the company's optional morning Bible sessions, Mudge could always find a scrap of Scripture that brought down God's wrath on a specific employee. Rhavi himself didn't understand this about Christianity, how it always seemed to make people feel they were doing wrong.

"Come on, son, Lord knows I don't have all day," Mudge continued. "Don't let that fine mind of yours just sit there."

"Well sir, we should discuss SFCI." Rhavi exhaled. He was happy to have something—anything—to discuss with his boss. And on this topic he had done his homework.

"Are they having a time of it out there, Junior?"

"There's news out on it, sir."

"Well, I'll be," Mudge said. He smiled again, this time broadly, with something like pleasant surprise.

A month ago, Mudge had told Rhavi to keep an eye on the business wires every minute of every day scanning for anything on SFCI. He instructed his Junior to study the business as would any analyst studying a corporation. For 25 straight trading days, there had been nothing. No price dip, no flicker in trading, zip: it was a limp stock, so anemic Rhavi wondered why Mudge had pinned him to it. But today, for the first time, he had something more than strained small talk to share with his employer. For a fleeting moment, he felt up to the task of being senior financial analyst for The Bank of Deerlick.

"BizWire is reporting something about a project called Darby Glen that is owned by SFCI and a preacher who is trying to stop it," Rhavi said, in the flush of confidence. "The preacher contends the problem is they're trying to tear down some historically significant slave shacks for the development."

"And what is SFCI, Junior? What do the annual reports say? What about the quarterlies? What's Bloomberg got on 'em? I presume you've done your homework, Junior?"

Oh, God, Rhavi thought: interrogation time. He had undergone similar grilling at Mudge's hands before. He knew the drill. It could be relentless. Shutting his eyes, he scanned his brain. He knew the answers. He could survive the drill. He was up to the charge. He just needed to...relax.

"SFCI is the trading symbol for Stress Free Concrete, Incorporated, sir," he explained, hoping he only imagined the edge of panic in his voice. "It was founded in 1941, when James Moseley bought the rights to sell a new type of concrete. It was stress-free—meaning that when you built a bridge or any other long-span project, you didn't have to use iron for reinforcement. Stress-free concrete simply held well on its own. Still does, in fact."

Rhavi looked down at Mudge, who had kicked his feet up on his desk and laced his fingers behind his head. Rhavi swallowed. His necktie was pulled so tightly around his neck that he could feel his carotid artery pounding against his button-down collar (rayon-cotton blend). Was that one of his socks curling up around his ankle? He considered bending down to pull it up but thought better of it. Instead, he thought about his performance thus far in the interrogation. To his relief, he gave himself a solid score. Better to continue before Mudge asked him something he didn't know.

"The turning point in the company occurred when Moseley went from simply selling the concrete to manufacturing it outright. He bought a plant near Shelbyville and started shipping it all over the world. A year later, in 1968, it went public. From all indications, the public issue netted Moseley a fair amount of money."

"And who owns the company, Junior?"

"The shareholders, sir."

"Do I really look like I just fell off the turnip truck, Junior?" Mudge was smiling again, though it was not the broad smile from before. This was the wolf smile, the smile of evisceration. This was a flash of pointed teeth, reflected in a knife's plunging blade.

"No, sir," Rhavi fumbled, quickly backpedaling, "I meant no disrespect." Of the many things he thought about Mudge, few of them pleasant, he had never once considered him anything but brilliant. Rhavi had been fairly proud of his own ability until he met Mudge, whose mind was an Excel spreadsheet of compound interest, debt-covenant ratios and EBITDA multiples. He did it all in his head, without so much as scratching a pencil on paper. Now, as always, Rhavi was certain Mudge already knew all the answers to all the questions he was asking. Breathing deeply, he scanned his mind for the answer his boss likely already had. In a second's flash of comfort, he found it.

"At the founder's death, control passed to his only heir, James Earl Moseley, Jr., a lawyer. At his death, which I'm unclear on—I think it was in the mid-'80s, but for some reason company literature avoids the issue—the family-owned stock passed half to Moseley's wife, and one-fourth to each of the children, Sims Manner Moseley and James Franklin Moseley III. All told, the family owns just over half the company's stock."

For once there was no third-degree from Mudge. Rhavi felt emboldened. "Since they have majority control, they pay out most of the profits in salaries and bonuses to themselves. The mother is listed as chairman; James Franklin is president and CEO, and Sims Manner is a vice president. For all intents and purposes, it's one sleepy company. Not a buy."

Mudge rose from his chair and walked to the nearby window. Billowing pieces of maroon fabric hung from a curtain rod and gathered in a puddle on the floor. The curtain, Anita had suggested, should have the look of a ballroom dress descending a stair. Sounded nice, Mudge thought. He pulled at the gold-tasseled sash and sunlight flooded the office. There before him rose Deerlick.

"Think again, Junior. I've bought."

Rhavi hesitated. Was Mudge pulling his leg? Was he simply testing him? He had said crazy things before, simply to get his goat. "Sir, you bought?"

"Sorta. But I'll get to that in a minute."

"Sir, SFCI is not something I'm sure we should be investing in." There, Rhavi had said it. He had crossed Mudge. But the picture of the company was not positive. By Rhavi's own projections, revenues were on track to fall 5 percent this year. Worse, he was projecting negative earnings for the current fiscal year, after scant positive earnings the year before. And now Chinese companies were low-balling their own stress-free concrete. SFCI was an old-economy business in an information-based new economy. Who built anything anymore? Bid farewell to bricks and mortar: welcome to the age of ones and zeroes. The concrete company was on its death bed, slowly shriveling into nothingness.

"I'll agree with you, the company is a dog," Mudge said. His eye had been caught by some kind of traffic commotion—what was that, an overturned pickup truck?—at the Deerlick interstate offramp. Cars were honking like mad. A patrol car sidled down the interstate shoulder, and an old woman shook her fist at someone trying to talk to her through her car window. "In fact, I'll go even further, son," he said, ignoring Rhavi for the spectacle unfolding below. "SFCI is a mangy, pesky, sick old dog. You ever had a dog like that, Junior?"

"I'm not sure I understand, sir."

"Well, I have. Can't fix it. Vet's a waste of time. The only thing you can do with a sick old dog is put it out of its misery. Which is what I plan to do. Then you just pick through the bones, take what's pretty, and bury the rest."

"Beg your pardon, sir?"

"We're gonna kill that company to give it life," Mudge said, never taking his eyes off the Deerlick exit's valley of woes. "That's why I bought into SFCI, Junior. Death Spiral Preferred."

Death Spiral Preferred! Rhavi as much as gasped. It was a popular tool in internet businesses that were desperately sucking for cash. He had once read in a high-tech finance journal about companies that, for their last round of financing, would roll the dice by agreeing to sell someone Death Spiral Preferred. A fly might as well sell itself space in a spiderweb. As he computed what such an agreement might look like between the bank and SFCI, the beauty of Mudge's logic suddenly dawned upon him. Rhavi hadn't been looking into SFCI's assets. He had been looking into Mudge's inheritance. But what could his boss possibly see in such a sinkhole? Cheap bags of concrete...a tiny office building housing corporate headquarters...an increasingly worthless factory in Shelbyville? Then it came to him.

Darby Glen.

"I see what you're thinking, son," Mudge said, careful not to betray any hint of pride. Mudge always knew Rhavi Prasad would figure it out. When Rhavi, as a graduate student, had showed up seeking a summer internship, Mudge had thrown him a couple of softball questions to see what he could do on his feet. Rhavi was nervous as a cat. He sweated through his shirt, and his voice shook as he fumbled for answers. But the answers came—never incorrect, not once. Mudge never liked having to be in the same elevator with Prasad. The uncomfortable silences were just too much to bear. But he had come to respect him more than any other employee at the bank. Rhavi's mind was up to his, and he respected that.

"Sir, as you know, you've always told me to focus on income and expenses as the core operations of a company, as opposed to its assets, but I did happen to spend time studying the balance sheet of SFCI."

"And what did you find there, Junior."

"The company carries Darby Glen as an asset. Fourteen hundred acres of developable land. My sense is that when SFCI revenues began to tumble, the company bought Darby Glen from the Moseley family as a way of putting some money in the family's pockets."

"Very good, Junior. And that's the beauty of Death Spiral Preferred." Just the words gave Mudge a shiver south of his belt buckle. "If we own the company, for which we will have paid peanuts, we own Darby Glen."

Joe Mudge thought back to the day he and Trigg Moseley had struck their agreement. He just had to laugh. Trigg had asked Mudge back in September about a loan to get Darby Glen up and moving, Mudge said the bank was very much interested. Was it ever. Mudge asked how much he needed; the reply came back, $25 million. Mudge said the bank was well acquainted with real estate in the area, and Trigg couldn't find a better partner. Why, Mudge told him he would keep everything on the QT and refer the proposal to his loan committee. He had assured Trigg there would be no problem with the loan committee. No problem! How does a closing date of Nov. 1 work for you? Trigg's eyes were wet with relief.

Just a week shy of the glorious day, Trigg got a call from Mudge. The loan committee had disapproved the loan. Unfortunately, it had come to the attention of both the committee and Mudge that the bank was in excess of certain loan-reserves covenants—an arcane bunch of federal regulations designed to guard against real-estate meltdowns. The loan, Mudge told Trigg, was "unbankable." Mudge was apologetic. Trigg was devastated.

But wait! What if the venture could be funded through another company, an entity called "Deerlick Equities." It could be trusted: it was Mudge's own financing company. He said Darby Glen was a little farther out than most of the properties they were developing, which were closer to the business district. But if Trigg Moseley needed help, why, the Moseley family was enough of a prominent player in Middle Tennessee business circles that they could dance around the normal due diligence. What are friends for?

And so, selling his friend the rope for his own noose, Joe Mudge came through with a deal. He would loan Trigg Moseley $25 million, at prime plus two, to put the project in motion. The $25 million he loaned SFCI would be convertible. (Nice word, convertible: top down, ready to roll.) That meant, at any moment he desired, Mudge could exchange his $25 million in debt into stock in SFCI. That was simply collateral, Mudge explained. He had to have something to fall back on if the development deal went south. As he explained it to Trigg, the conversion of debt into stock would be based at whatever price the stock was trading. No lose, right?

When Trigg Moseley had looked at the deal, he hadn't seen any red flags. The bank financing had fallen through and his back was against the wall. So he looked at Mudge, swallowed hard, and signed.

If Trigg Moseley had been more of a businessman, more of a gambler and a risk-taker, more even of a small-talker, he might one day have learned what Joe Mudge already knew. Which was this: if Mudge exercised his right to exchange some of his $25 million in debt for stock, the company would have to issue new shares. As new shares were created, that would dilute the other shareholders. Because the other shareholders would be diluted, the price of the stock would fall.

As the price of the stock fell, then Mudge would have the right to get even more shares as he exchanged his debt. That would cause the price of the shares to fall even further. Which would enable Mudge to buy even more of the company. Soon the company would be in a Death Spiral. Soon the majority shareholder in SFCI would be Joe Mudge.

The beauty of it! That was Death Spiral Preferred. That was America. That was how it worked. Sometimes you had to throw a few elbows, knock out some windows, scuff your white hat. Sometimes your friend lost a few teeth, sometimes the blood was on your fist. But Trigg Moseley didn't have to sign. It was his own choice. Mudge even explained that to him. It was a free country, partner. In that sense, Rhavi was beginning to understand America. Over here, people played for keeps.

Yet something about the imminent conflagration of SFCI did not quite jibe. "There's one thing that's bothering me, sir, that I cannot figure out," Rhavi asked.

"Fire, Junior."

"Since the news about the opposition to Darby Glen is not positive, why would you want to end up owning the development itself?" he asked. "Sure, it's a prized asset, but it may ultimately prove without value."

Mudge turned to Rhavi, and this smile Rhavi hadn't seen before. "Let's just say that I thought it made sense to get the stock a little shaky to begin with," he said, drawing the curtains over Deerlick. "Plus I thought we could use a little diversionary tactic. No doubt Trigg Moseley will be drawn to this rather than his own damn stock."

Suddenly Mudge's speakerphone erupted. "Mr. Mudge," his secretary said, "Rev. Floyd T. Winnings is here for his appointment."

Right on time, Mudge thought. So good to be meeting the newest member of our loan committee.

COPYRIGHT 2004 BY BRUCE DOBIE.