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we want and tell them to keep the stuff we don’t want. And, according to the loss-share arrangement we have with the FDIC, if we experience any losses on any of the loans we buy, they’ll cover eighty percent of those losses.”
    Folsom smiled. “And the losses are calculated against the actual loan balances, not against the discounted price we pay for the loans. It’s heads I win, tails you lose.”
    “I did a quick and dirty analysis of the commercial loan portfolio,” Cunningham said. “The current appraisals in the bank’s files show that, as a result of the economic downturn, the commercial real estate backing up the bank loans is now worth only eighty-five percent of what it was when the loans were originally closed. So, for example, a million dollar property is now appraised at $850,000. That’s in line with what we have seen in value depreciation across this market. But the Feds made Broad Street Bank write down their loans to an average of seventy-five percent of current loan balance. And the original loans, on average, were advanced at an average of only sixty percent of original appraised value. Therefore, if Broad Street loaned a borrower $600,000 against a million dollar property, the Feds now declare that the loan is worth only seventy-five percent of $600,000, or $450,000. Even though the collateral behind the loan is valued at $850,000. These loans are solid. And if a loan does go bad, we can always sell the property—the collateral —and pocket a profit.”
    “Sandy, what I’m really interested in knowing are which real estate loans mature in the short term.”
    “Just like with the other banks we bought,” Cunningham said. “I’ve already anticipated that. You’ll have that information Monday.”

SATURDAY
    JULY 16, 2011

CHAPTER SEVEN
    Attorney Paul Sanders arrived at Winter Enterprises’ offices at 9 a.m. sharp on Saturday. He was still the distinguished-looking man he’d been two decades earlier. Still slim and elegant, but grayer, with thinning hair. Even on a Saturday, he wore a suit and tie. Nick met him in the lobby and led him to Edward’s office where Katherine was just leaving to tour the restaurant locations.
    Dressed in khaki slacks and a lime-green polo shirt, Katherine looked model-perfect. As usual, Paul couldn’t take his eyes off her. That too, hadn’t changed.
    Edward felt bad for Paul. It had always been obvious to him how the lawyer felt about his mother, and just as obvious was her lack of interest. “Call me if there are any problems at any of the restaurants,” Edward said to his mother.
    After Katherine left, the men sat down. “I assume you’ve reviewed all the loan documents, Paul,” Edward said. “Do we have any options?”
    Paul shrugged. “A few. Your loan’s anniversary date is at the end of July. The 29th to be exact. The bank has the right to demand payment in full as of that date. But the bank has new ownership. Maybe they’ll want to extend the loan, which would take all the pressure off you to find alternative financing. But …”
    “But what ?” Nick pressed.
    “I wouldn’t count on getting any relief from the new owner.”
    “Why do you say that?” Edward asked.
    Paul visibly swallowed. His face reddened. “I need to tell you something I should have shared with your mother twenty-two years ago.” Paul couldn’t seem to go on.
    “What is it, Paul?” Edward asked.
    “Could I have some water?”
    Edward went to the mini refrigerator and pulled out a bottle of water. He gave it to Paul and watched him open the bottle and take a drink nervously. He waited until the lawyer put the bottle down on the edge of his desk and then asked, “What happened twenty-two years ago that has anything to do with the new ownership at Broad Street Bank?”
    “Folsom Financial Corporation is owned by Gerald Folsom, the same man who put your father into a bunch of real estate deals back in the ‘80s. Your father and I had a lot of conversations about