A Failed Merger Becomes A Blessing for StuyvesantAugust 1998
"There are real dangers in verbal agreements," he warns emphatically. "Every word must be written into the contract. If you're going to merge, it's absolutely imperative to know the people and company with which you're merging. Find out all you can about that business—its ethics and policies. Ask the employees, customers and other businesses how they feel about that company. Do your homework. A merger is a marriage, and a split-up can be as nasty as any divorce."
Most importantly, Roesch cautions, "Make the proper provisions in the contract. Provide a clause that clearly states that if after six months, things aren't working out, either party can back out."
It took 18 months for the Stuyvesant merger to "dissolve by default," says Roesch, explaining he was eventually "bought out" of the contract.
Roesch had a check in hand, but he no longer owned any equipment. But he did own the company's name—and the building where Stuyvesant was located. As landlord, he immediately evicted the tenants—his ex-partners at the mailing house.
Ousted from the facility, the mailing house packed up all the equipment, computers and furniture, and vacated the premises, closing the doors behind them. Within a month, the doors were reopened by Roesch, who walked back in—in a grand fashion.
Rehiring his original staffers, who were now unemployed due to the eviction, Roesch and his crew renovated the building. He bought all new furniture and equipment and, within 90 days, the plant was 100-percent operational.
"Without the huge commitment from my employees, I could not have made it. We worked non-stop, 12 hours a day, six days a week for a month to put it all back together. Now that we're back, we're better than ever," says Roesch, who believes if he had been out of business for any longer than a month, he would have lost his customers—and ultimately the business.
"They would have gone someplace else," he says. "I jobbed out all the work and took a loss. But I kept the business alive."
Not only did he keep Stuyvesant alive, he gave it new life.
"If I had mirrored the business before it merged, I may not have made it," Roesch notes, emphasizing the old business had outgrown its facility and equipment. "The failed merger was a blessing in disguise. It gave me the chance to start over with the best technology my money could buy."
By Cheryl A. Adams