A Mile Down (18 page)

Bankruptcy law is very generous to the debtor. I might be allowed to keep
Grendel
, for instance, my forty-eight-foot boat that still hadn't sold. I could claim a $50,000 homeowner's exemption even though it was a boat, and this, combined with the $34,000 bank mortgage and $10,000 in private loans secured against it, meant that the bankruptcy trustee could not make any money from selling, so he most likely would consider it not worth the effort.

In the end, I hoped that most of my lenders would be repaid from the sale of the boat in Spain, and I would keep
Grendel
(with its mortgages still intact) and $4,000 in IRAs. I would still have other private debts, however, which the court would discharge but which I would have to repay anyway. I owed my mother $60,000, for instance, and my sister $11,000. I would also need to repay money that I was borrowing from Rand to get through the bankruptcy and to get my life back together. I would end up at far less than zero net worth.

And then I ran into new problems. I called the attorney general of California's office because I was not able to refund passenger deposits for the winter charters. I had collected only $14,371 in deposits, from six passengers, but I had no cash to repay even this amount. I had a California Seller of Travel license, however, and I had contributed yearly to the Travel Consumer Restitution Fund as a part of this ongoing licensing process. I thought my passengers might be able to make claims against this fund to get their money back, and I wanted to make sure they received their money, so I was calling on their behalf to find out how and where they should make their claims.

After several voicemail messages back and forth, I spoke over the phone with a deputy attorney general who told me very directly that he was going to come after me. He said that every time I had used passenger deposits to pay for diesel, crew, slip fees, food, or any other operating expense, I had committed embezzlement, a felony offense.

He claimed this on the basis that I had two corporations, one in California and one in Gibraltar. The California corporation had a Seller of Travel license, had collected the monies, and, in his opinion, was a Seller of Travel and not a “carrier.” The Gibraltar corporation owned the boat and was therefore the carrier. A carrier can legally use deposits to pay for a boat's operating expenses, whereas a Seller of Travel cannot.

I realized at this point that I had made a mistake. I should not have called, and my passengers had no right to make claims against the fund. I had the Seller of Travel license only for when I leased boats, but in this case I had not leased a boat. I had used my own boat and was a “carrier,” like a cruise line, rather than a Seller of Travel, which is basically a travel agent.

I tried to explain this to the deputy, calmly. The Gibraltar corporation was owned by the California corporation and had been set up only to allow flagging of the vessel. It had no bank account, no employees, no income or expenses, and no office. The California corporation could not have used the passenger deposits to buy the trips from the Gibraltar corporation, because there was no one to pay, and the Gibraltar corporation could not have paid for operating expenses because it had no bank account or employees. In summary, the California company was the “carrier,” I had not broken any laws, and my passengers had no right to make claims against the fund. I apologized for making this mistake.

The deputy attorney general said no. Just said no, flying in the face of common sense and reason. It was hard to know how to respond. He understood what I was saying, but he still claimed that the company with no bank account and no employees was the company I had to pay for obtaining the charters, and that if I had ever paid operating expenses with money from the California company, it was a felony charge of embezzlement and I was going to jail.

It was just before Christmas, sunny and bright outside. I was trying to think of some other simpler way of explaining this to him. Surely a deputy attorney general of California was capable of basic reason. I was getting scared. Then he told me the only thing I could do that would keep him from pressing charges would be to repay in full the $14,371 I owed to passengers. I explained that I had no money at all, that everything had gone into the business, because I had in fact not embezzled anything, not even my own savings and wages from teaching, and this was why I had to file for bankruptcy. But he said I had to pay or he would press charges.

I made my mistake with him then. I didn't raise my voice, and I didn't get angry. I just asked, in a very humble tone, what happened if I contested this, because it didn't make sense. I felt I was allowed at least the question, to find out what my options were, but this was a mistake.

I began calling attorneys immediately. I also called one of my lenders, who happened to be a deputy attorney general of California in a different office. He thought the charges were nuts, but it was clear he wasn't going to step into the case and interfere, either. Apparently it was bad etiquette for one deputy to step in and question another deputy's case. So I found an attorney, a guy named Jack, who specialized in this area and had in fact written part of the current Seller of Travel Law. He represented cruise lines and travel agents. And he knew this deputy personally.

Jack met with me on Christmas Eve. Rand was lending me the money to pay his fees. Jack said this deputy was known as a hothead and it was too bad I had questioned his authority, even obliquely. He would take it personally and make sure he nailed me, even if it was a waste of time and not in the best interests of the citizens of California. On the very day I had spoken with the deputy, Jack had put a case on his desk involving about $150,000 in real fraud. A company had sold a lot of trips to Baja California with no intention of ever providing the trips. After they collected the deposits from consumers, they packed up and left town. The consumers filed police reports. Jack presented the case for prosecution, and the deputy decided not to take it. He took mine instead.

This, Jack said, was to make his numbers look good. He could win the case against me easily. I had called the AG's office myself, basically turning myself in, and although the case against me had zero merit and was a departure from the AG office's own practice of “following the money” to determine who the carrier was, the deputy knew that I was declaring bankruptcy and didn't have any money. This meant I wouldn't be able to pay the $20,000–$25,000 to defend myself in court. He would have an auditor review my books, and he would file hundreds of counts of felony embezzlement against me, for every time I had paid an expense to run a charter. Fighting this would be too expensive and high-risk for me, since if a jury didn't understand the case I could end up in jail.

I was speechless. This deputy attorney general was letting $150,000 in real fraud slip by and coming after me instead, on the basis of an idea that didn't follow even his own practices. And he could get away with it because I was poor.

Jack dictated a letter to him that day, explaining everything and asking him to drop the case. Jack also used the occasion to further some of his own interests, adding a garbled paragraph about the history of Seller of Travel Law. The inclusion of these vague bureaucratic threats, combined with the fact that Jack had trouble arguing my case clearly (I had to revise many of his sentences to make them understandable), did not inspire confidence. By the end of the day, I realized Jack was a hack. I was capable of making the case more clearly. But of course I didn't have the personal relationship with the deputy, and I wasn't a celebrated lawyer or one of the authors of the Seller of Travel Law. I had to take what I could get.

There was another issue we discussed that day, which was my consumer bond. The Travel Consumer Restitution Fund was really a secondary fund. My primary protection was a $10,000 bond through Redland Insurance Company. When I contacted Redland to find out how my passengers could make their claims, Redland responded by immediately canceling my bond and hiring a collection agency to beat the shit out of me. They refused the claim and also sued me for $12,000 to indemnify them against claims.

So Jack dictated a letter to these folks, too. The California attorney general and Redland Insurance Company were making my bankruptcy and the loss of my business seem like the easy parts.

For more than twenty years, I had felt doomed to repeat my father's suicide. I had believed that eventually I'd hit a low point, a time when all had gone wrong and I was under pressure, and suicide would be waiting for me then, something irresistible. It really had felt like doom, something that inescapable. But what I realized now was that I'd fallen as low as I could imagine falling, overcome by feelings of fear, guilt, shame, self-pity, and persecution, and still there was no thought of suicide. My mind just hadn't gone there. I was not my father, and I no longer had to fear repeating his suicide. This was a wonderful and unexpected gift, a release, and made a difficult time far less difficult.

After this meeting, I asked Rand for a loan for the $14,371. I didn't want to spend my life in prison on several hundred bogus felony counts, and I didn't have the money to fight the charges.

Rand had already done more than pay my flight home. He had also given me some cash to get through the end of December, set up the appointment with the bankruptcy attorney, and even promised me a job. A few weeks before, when I had still been in Gibraltar, he had told me he wanted to set up a website that would review and rank crewed charter companies— a consumer guide for vacations on the water. He said he would hire me for a year to travel the world, interview charter companies, evaluate their services, and write the reviews. It was incredibly generous, and the thought of it definitely helped me get through a hard time. But he wasn't going to loan me this new money, even as an advance against my pay. He didn't want his loans to be never-ending.

Everyone knew I was about to file for bankruptcy, and I had no credit whatsoever, and I needed to find a $14,371 loan.

It's hard to get people to loan you money right before you file a bankruptcy that will discharge that loan. Who on earth would do it? But what kept me trying was this thought: Could a jury of ordinary folks be counted on to understand that the Gibraltar company was set up only to register the vessel? Wouldn't it be pretty easy to paint a picture that I was doing something dirty in setting up these foreign corporations? Most Americans instinctively distrust that kind of thing.

Then Rand relented and said he would loan $10,000 if I could get the $4,371 from someone else. It was to be an advance against the Redland Insurance bond, for a few weeks. Rand and his wife Lee were saving me again, and I was unspeakably grateful, but I still needed the other part of the loan.

For the next two weeks, as I filled out my bankruptcy schedules, tried to clean up nearly impossible taxes after Amber's lack of accounting, and worked on a business plan for Rand, I tried to find a loan, but there weren't many places to turn. Finally, I called Charlotte Calhoun, my last hope.

Charlotte Calhoun was the custodian for a very large family fund that gave gifts to various causes. She didn't owe me anything, and there was no compelling reason for her to give me a loan. She was in her early sixties, I think, and had been a student in one of my Continuing Studies courses in creative nonfiction. Her memoir, which took place in China and was set against the background of her husband's long illness and eventual death, was beautifully written and moving. I had encouraged her, and I had offered to keep looking at her manuscript after the course ended. She had also come on a charter in Turkey in the summer of 1998; afterward she set up a yearly $10,000 gift to Stanford Continuing Studies to be used to pay the salaries of visiting teachers on my trips. I had never asked her for a loan for the new boat, because I knew she would not be interested in that kind of thing and I hadn't wanted to offend. But I called her now, and I told her the situation.

Charlotte said yes. I felt terrible asking her, but she was extremely gracious about it. She wanted to loan the full $14,371, in case the bond never came through, and she wasn't worried about repayment. I could repay her if it became convenient. She thought keeping me out of jail on trumped-up charges was worth the money.

I was so grateful, I cried. None of the awful events of the past months had made me cry. But kindness—generosity that isn't obligated in any way—is much more affecting.

Charlotte's loan saved me. The money was put into a trust account with Jack, and the deputy called off his auditor in San Francisco. The deputy also sent a letter saying the AG's office wouldn't take action against me as long as the money went to all the passengers and I didn't break the law. This last clause allowed him to still come after me at any time on the same bogus charges, which was his way of keeping me quiet and the reason you're not learning his name here. Jack, whose name has been changed to show his worth, was supposed to get an admission that the charges were inappropriate, but he failed.

I had to give up on the $10,000 bond from Redland Insurance Company, also. The deputy attorney general had promised to go after Redland for the bond money, since by law they should have had to pay, but of course he didn't follow through. They were still suing me for $12,000, however, to indemnify the bond amount and to pay their collection agency. They put marks on my credit history and threatened me in every way they could. So I just listed them in my bankruptcy papers and gave up.

By this time, toward the end of January 2000, the business idea with Rand had become more than just an online consumer guide to yacht charters. We had decided to go for a full boating portal. There was no good boating portal on the web yet, and vertical portals, which focused on bringing together vendors and consumers for a particular industry, were the hottest item for new venture capital investment. Rand's brother-in-law, Tom, was a venture capitalist and CEO of a start-up, formerly the CFO of Safeway and other large corporations, and he was willing to help us out. I was writing a business plan, and he was going to review it and help us through revisions and research until we were ready to present our plan for funding. Rand, in his characteristic generosity, was willing to split the founder's shares with me, fifty-fifty.