Chapter 7 - The Midnight Audit
At 1:00 AM, my kitchen table was covered in red-inked balance sheets.
Sarah Jenkins, my accountant, sat opposite me with her hair pulled back in a messy bun, drinking black tea from a chipped mug. Her laptop was tethered to a portable scanner, churning through stacks of receipts retrieved from the back office of the old diner.
“It’s worse than the credit union loan, Benny,” Sarah said, sliding her glasses down her nose. “Look at these vendor reconciliations.”
I pulled the ledger toward me. “What am I looking at?”
“Sysco filed an affidavit of judgment three weeks ago. She ordered twenty-four thousand dollars in specialty meats and high-end cheeses over a four-month period. She wasn't using them in the diner.”
I frowned. “The diner was closed three days a week by spring. What did she do with twenty grand in prime rib and imported cheese?”
“She was running an unlicensed catering company out of the back,” Sarah said, leaning forward. “Catering private parties for the lake crowd in Petoskey and Harbor Springs. Cash transactions. None of it hit the diner’s business account. She took the cash, pocketed it, and let the invoices pile up under the restaurant’s corporate name.”
I let out a low whistle. “That’s criminal conversion. That’s pure fraud.”
“And it gets better,” Sarah added grimly. “She took a secondary equipment lease against the Hobart dough mixer and the walk-in compressor. Those pieces belonged to the building, but she leased them out to a third-party restaurant in Cadillac for three grand a month, cash, while telling Dad they were out for repairs.”
“So the commercial foreclosure isn't just the bank,” I said. “It’s a dogfight between four different judgment creditors.”
“Exactly,” Sarah said. “When this goes to auction on the 12th, the opening bid won't be the tax valuation. The opening bid will be set by the credit union to cover their first-position lien: two hundred and forty thousand dollars. If nobody bids, the bank takes the title and sells it to a commercial liquidation group.”
“Who else is looking at it?”
“Garrett Vance,” Sarah said, her voice dropping.
I stiffened. Vance was a real estate shark from Traverse City. He bought foreclosed waterfront and commercial properties, leveled the historic structures, and built modular vacation condos or overpriced craft breweries with corporate backing.
“Marissa’s been in contact with him,” Sarah noted, tapping her screen. “Her cell phone records from the business account show sixteen calls to Vance’s office in the last ten days. Benny, she’s trying to cut a finder’s fee deal with him. If Vance buys the parcel at auction for pennies on the dollar, he bulldozes the diner, builds five luxury townhomes, and gives Marissa a ten percent cut of the development entity.”
“She gets a payday, and Dad’s name stays on the outstanding judgments,” I concluded.
“Precisely. Dad’s credit stays ruined, Mom loses the house to the second lien, and Marissa walks away with a new condo and clean hands.”
I stood up, walked over to the coffee pot, and poured the last cup.
“How much liquid capital do we have between my operating reserves and the equipment loan line Henderson approved at Northern State?”
Sarah checked her spreadsheets. “Three hundred and ten thousand. If you use it, Benny, you wipe out every dime of profit the 4:30 has made since the day you opened the doors. You’ll be operating on a three-hundred-dollar margin every week. If a cooler compressor blows, you won't have the cash to fix it.”
I looked out my kitchen window. Down the dark road, two miles away, was the diner where I had spent my twenties watching the snow fall on the hemlock trees while the grill warmed up.
“Get Henderson on the phone at eight sharp,” I said. “Tell him I’m coming in to sign the line.”
“Benny, you’re taking an insane risk,” Sarah warned, her eyes full of concern. “That building is cursed. It’s got sixty years of family baggage and two years of Marissa’s poison inside the walls.”
May you like
“The walls are good,” I said. “It’s the people who were inside them that were broken. We’re going to the auction.”
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