JANUARY 1, 2003 If you’re like me at all, you snuck away for the New Year to a beach or slope somewhere, but to assuage your guilt you brought along some work. Me, I was in South Beach. I had a pile of financial documents, smartly shoved into one of those translucent folders with all the cool little pockets, and I was going to try to make sense of where my company, Ted, Inc., had ended up in 2002. And how the picture looked for 2003.
So on New Year’s Eve, while I sat by the Shore Club pool, not 30 feet from where I had just hosted the Helena Rubenstein Miami launch party, in the as-yet-unopened SkyBar Miami Beach (which would soon be pouring my client Zygo’s “energy vodka”—that is, if you believe in “energy vodka,” which I kind of do), I applied my rusty calculator and even rustier accounting know-how.
But even an idiot could see what I saw. I was not only broke; I was in debt. Neither of the quarter-million-dollar loans I had applied for had come through, and for the first time in my company’s ten-year history, I didn’t have any tricks up my sleeve. My hands started to shake, and my throat went dry.
A jog on the beach to the Fontainebleau, which normally would have left me full of ideas and plans, didn’t really do the trick. Sure, it looked like Skechers’ new brand, Michelle K, was about to sign on (stolen, happily, from one of my main competitors, Harrison & Shriftman), and there were several events linked to Playboy’s fiftieth anniversary on the horizon, but neither had coughed up a check yet.
A few days later, on the plane ride back—since when had I started flying JetBlue?—I stewed in my own insolvent juices.
JANUARY 7 Good news, bad news—do they ever come separately? Good news: A meeting with Vanity Fair and L’Oréal on arrangements for the Golden Globes is a success. We’re planning a four-day luxury suite at the Mondrian hotel for celebrities and their satellites to come and primp and borrow. In addition to Vanity Fair and L’Oréal, we’ve got fragrances and fashion by Carolina Herrera and Paco Rabanne, feather boas and furs by Adrienne Landau, plus jewelry, candles, and liquor sponsors to round out what should be a great program. In Hollywood, I’m king of the suites—according to WWD, “The Sultan of Swag”—and the Globes look like a winner.
But Vanity Fair also has bad news. It’s canceling its Fashion Week “Atelier.” Not enough advertisers are interested. This is nothing new: In the past year or so, we’ve spent half our time developing programs and events that get killed. The projects that do get green-lighted tend to be cheap and cheerful. What three years ago would have been a $250,000 event now has to be brought in at $150,000. And the fun part is that a big program or event for a smaller budget means more man-hours—not fewer—so we get squeezed on both ends.
JANUARY 9 Here we are at Sotheby’s for the fiftieth anniversary of Aperture, the fancy photo publisher. I’m running the gala—or, as I like to say, “I’m the event disorganizer.” The mayor’s here, on behalf of chairs John and Susan Gutfreund. Our favorite celebrity is Joni Mitchell, who, after hours of secretive negotiations to get her to show, turns out to be extremely easygoing.
Silent auctions of photos are a Ted, Inc., specialty; we’ve done them for charity events sponsored by The New Yorker, Condé Nast Traveler, even the International Center of Photography. And this is one of our best. There’s a Marilyn by Bert Stern, and donations from Mary Elle n Mark, Mario Sorrenti, Deborah Turbeville, Patrick McMullan, and Walter Chin in the collection of over 30 images. On the day of the event, William Wegman calls to say sorry for the late notice but he’d like to donate a photo. We don’t say no.
The buying fever catches me, and I snap up a $750 image of an abandoned railroad station by Oberto Gili. The stark, sad picture speaks to me. In the cab ride home, as my fellow employees enjoy a high-five over another successful event, I wonder if I can afford a $750 charity photo.
JANUARY 14 I turn 40.
I was 30 when I started my company in my studio apartment with my cousin Gillian. I had been in magazine publishing, most recently as group marketing director for Elle and Elle Decor, and Gillian was just off the boat from producing a documentary in Nicaragua. Honestly, we hadn’t thought we’d start a company; we were just killing time.
But we had a few stunning early successes. My friends Ron Prince and Sandy Golinkin hired us for Travel + Leisure’s relaunch, and the event included Asian street acrobats, flaming cocktail trays, the Abyssinian Baptist Church choir, and a 40-member conga troupe that really ripped it up. All this under the vaulted ceiling of Grand Central Terminal.
Then came InStyle, which took a chance on me for its first New York event. Bloomingdale’s gave us all of its Third Avenue windows, and a counterintuitive combination of guests—Jane Seymour, Salt n’ Pepa (who absconded with their limo), and the lady who sang “I Love the Nightlife”—made for an evening that was at least memorable. Business grew, and along the way we became known as the firm that would take on really big, scary things, make them even bigger, give the clients nervous breakdowns, but pull it off in the end.
So here I am whooping it up in the stratosphere, on a plane to L.A. Fortunately, I’m back on American in business class this time (only 10,000 miles to go to get platinum status). After I land, I sign my life away at the hotel (why are my hotel bills always more than $20,000? Because I have six rooms plus the penthouse booked—that’s why). My friend Muffie Potter Aston, coincidentally in L.A., takes me to dinner.
We go to Koi, the hot Japanese restaurant where Drai’s used to be, to test the food for a People dinner I’ll be running for the Screen Actors Guild. By coincidence, People’s flamboyant and fabulous fashion editor Steven Cojocaru and associate publisher Dan Osheyack are there. We uncork some champagne. Steven and Dan tell me they want me to organize a party for Steven’s new book, Red Carpet Diaries. There’s some business.
“When you miss a tax payment, two things happen. First, they apply penalties. Second, you start to get a lot of fancy-colored mail.”
JANUARY 15 Both Muffie and I wake up with major food poisoning. This is not a good sign for the upcoming party.
By the time I stagger up to the Globes suite at the Mondrian, a Fox camera crew is waiting. They love the idea of the Zygo Golden Globe cocktail, which has edible 23-karat-gold flakes floating in it. Trying not to retch, I drink it on camera more than once, reminding myself each time that the edible-gold people need a check FedExed. The stuff costs a fortune.
Maria Conchita Alonso arrives and does a big show for the camera crew. It makes the segment. Only problem is that it’s not Maria; it’s stylist Fati Parsia (the nicest celebrity stylist in the business, and they do look alike). Nobody catches my error. I think.
JANUARY 17 It’s Friday night, Golden Globes weekend, and things are heating up. There’s a party in my suite. Salma Hayek is a peach; Maria Conchita Alonso (the real one) hangs Chinese lanterns. My potential new client, designer MichElle Kelchak, is there and seems impressed.
The manager of the Mondrian stops by to wish me happy birthday, whereupon I learn that I misunderstood the corkage fee for the hotel. When sponsors provide wine or spirits for a restaurant or hotel, you’re often charged a corkage fee per bottle, to make up for the lost revenue. On the phone, I understood this amount to be $15 per bottle. Only now do I realize they said $50. This does not seem to be negotiable, and a quick calculation tells me I misinformed my clients to the tune of a couple thousand dollars.
JANUARY 22 I’m freshly arrived back in New York, and run to the LVMH Tower, where the rest of my staff is setting up for a Christian Dior skin-care launch.
Apparently, when I was in Los Angeles, the team that’s still in New York had a cash-flow problem. While we brought a staff of four to L.A., plus our West Coast manager, to run the Golden Globes, we left a team of five back home to deal with the other twenty accounts. Now the bank won’t give us any money because none of our checks have cleared. And since I have a $22,000 bill on my credit card at the Mondrian, I’m kind of tapped out. So we bought the flowers late (they’re not open yet) and paid the seamstress late (no tablecloths). It’s going to be a long night.
JANUARY 23 After blow-drying hyacinths till 2:30 a.m., I’m back at LVMH five hours later with a very tired-looking crew awaiting the tablecloths, which need to be ribboned and grommeted and on the tables by nine.
As the beauty editors file in, I help hang coats. W’s Jane Larkworthy hands me her jacket and says jokingly, “Ted, has it come to this?” I smile and think, Well, maybe.
To top off the morning, the accountants have called and demanded a face-to-face meeting. It’s time to deal with my tax shortfall.
We had missed a few quarterly payments—not many, but to miss even one is a bad thing to do, trust me. Since then, we’ve cleaned up our act, and we’re paying them regularly, but we’re not making any dent on the past-due amounts. And they’re assessing penalties. Fast and furiously.
We applied for two loans last fall, one from the government and one from a commercial lender, and we were confident of getting one and had a good shot at the other. We even had a loan consultant. Though we haven’t been denied, we haven’t been approved for either one. And the money we have on hand is already earmarked for operating expenses. The goal is to get a big chunk of cash, get the IRS to forgive some of the penalties, and get on a payment plan. But I’ve never been able to get the same person from the IRS on the phone more than once.
So I’m like the actor with two masks. To potential lenders, I’m a thriving small-business owner with a temporary setback, and to the government, I’m a poor but honest shopkeeper trying to do the right thing. The second role comes more naturally.
JANUARY 29 Lunch at The Four Seasons with Adweek and Disney Publishing’s FamilyFun. I bring a check for Julian Niccolini, the suave proprietor, and apologize for letting my account fall so far behind. I notice I am seated not in the Grill Room but in the lesser Pool Room. Julian says it is a mistake.When the bill comes, I let my client get it—a strangely liberating feeling.
FEBRUARY 10 It’s Fashion Week, and things are looking up. The phones are ringing, and—as it has so many times before—my office seems like the center of the universe. Tonight is Elle Decor’s Dining by Design, one of my favorite events, where more than 50 different designers create one-of-a-kind tables—some of them fabulously inventive—to benefit diffa. This is the first time we’ve done it during Fashion Week, a considerable risk because there’s so much competition, but we’ve managed to round up luminaries like Cynthia Rowley, Vivienne Tam, David Rockwell, Katie Brown, and Colin Cowie.
At 11 p.m., after saying good-bye to five staff members and putting John Waters and Marissa Jaret Winokur, the Hairspray girl, in a car, my irrepressible and always willing assistant Eleanor and I head to Cipriani 42nd Street. There, my stylist cousin Elizabeth is supervising a team of ten preparing for Cosmopolitan’s Fun Fearless Female Awards, being held the next day.
Things are going slowly. As always, the stage looks too big, the custom-made, two-layer tablecloths don’t seem to fit, and despite a lot of early assurances, the room doesn’t hold as many people as we’d thought. I’m glad my clients aren’t here to see this. My team looks deflated when I leave at 2 a.m., barking orders as I go.
FEBRUARY 11 Miraculously, I arrive at 7:15 a.m. to find everything looking remarkably sleek and surprisingly professional. Who did all this? I wonder. The tablecloths still don’t fit right, but you can’t tell. At 11 a.m., Laura Linney is the first, and friendliest, to arrive. Sandra Bullock is the girl of the year, and goes through her paces with complete professionalism.
Last to arrive is Eve. I had warned my client that she arrived so late the year before at the Event to Prevent (Teen Pregnancy) that I had to climb into her Veuve Clicquot–stocked trailer and tell her we were pulling her from the program. Today, when she arrives, oh, 120 seconds before the start of the show, I’m relieved—until she tells me she has to go to the ladies’ room (cue major eye roll). She says, “Sixty seconds, I promise,” and sure enough, she takes her place in line one minute later and then stays longer than any other celebrity, greeting guests and signing autographs. She looks magnificent. We clear the air over our last event, and she says, “Thank you for taking such nice care of me.” I am seriously flattered.
I’m embarrassed to admit that the odd process of recruiting, coddling, and exploiting celebrities became a big part of the daily routine as the company grew. We produced awards shows and benefit concerts with some of the biggest names. We made a retrospective video for David Bowie that required three different editing teams (but in the end, he liked it). Prince performed at two of our events and then hired us to announce his Website. Sharon Stone kissed me on the lips (and became a loyal supporter; say what you want—for real glamour, nothing touches La Stone) after I succeeded in getting the mikes turned back on for an InStyle charity auction when she arrived after the event was over. She had two more items to sell, and sell them she did.
I got to know the former mayor. A Rudy arrival always packed more wattage than any star’s, because of the advance people with microphones, the cops, and then eventually the big black SUV (this before the rap stars all had them).
After the Cosmo event ends, my talks with Playboy continue, getting more and more complex, but with bigger and bigger potential payoffs. The anniversary may be televised. Can you book the entertainer? Will she do a cover? Big stuff. Maybe enough to pull us out.
“I bounce a check to my contractor, who miraculously agrees to keep working. ‘If you’re going to lose your company, you’ll probably be spending a lot more time in your apartment,’ he says.”
FEBRUARY 12 Oscar nominees were announced yesterday, so The Hollywood Reporter, Variety, Elle , and Advertising Age are all calling for quotes about jewelry, fashion, etc., for the Oscars’ attendees.
But the bons mots aren’t flowing, because the New York State tax people are conducting a “field visit” to see if I’m a legitimate business. Sometimes you know they are coming—sometimes you don’t. There is no accountability with the tax people. I’m considering applying for a job with them.
When you miss a tax payment, two things happen. First, they apply penalties, sometimes more than the tax itself. Second, you start to get a lot of fancy-colored mail.
Between blather like “Diamonds will be chunkier” and “It will be hard to surpass Halle,” we successfully set up a payment plan with the state of New York, one that we think we can live with. Time to go see the accountants.
FEBRUARY 14 Another single Valentine’s Day (sigh). And back to Florida, for a meeting with Bob Greenberg, the CEO of Skechers shoes. I’m on my game, my ideas are good, and after a very pleasant and what feels like a lucrative lunch, Bob invites me for an afternoon on his boat with pals. I suspect the worst when we leave his Boca manse and a Sea Tow boat follows diligently with a genial fellow yelling things like “It’s a bit rough out there on the ocean, you know.”
Stupidly, I accept an offer to drive the boat. Bob mistakenly informs me that his boat draws four to five feet of water. When the depth finder reaches seven feet, we run aground. This boat is worth half a million if a penny. Do I offer to fix the bent propElle rs? Repaint the bottom of the hull? If he’s thinking I can write him a generous check, he’s out of luck.
Bob is a complete gentleman and says, “Next time, let’s get a running start and really beach the sucker.”
FEBRUARY 24 Time once again to meet with Maggie and André, my polite and unflappable husband-and-wife accounting team. You know you’re in bad shape when your accountants suggest that your situation exceeds their skills and they recommend you hire both a bankruptcy lawyer and a tax attorney.
FEBRUARY 25 A sobering meeting with my lawyer. He’s a nice, low-key guy who I seem to both worry and amuse at the same time. After I lay out my entire situation, I explain my strategy, which is to keep the wolves at bay until the Oscars, when I’ll have a significant chunk of cash to pay down my bills.
“Guys like you always think they can pull it out,” he says. He tells me I need a tax attorney and says that in the meantime, I should go about my business and keep my mouth shut. Then he launches into a basic explanation of Chapter 11. He also tells me about Chapter 7 and Chapter 13—different ways that companies protect their assets as they try to reorganize.
What book are these chapters in? Are the even-numbered chapters all about making money and distributing profits? How come no one gave me this book when I started my company?
Or at least before we moved from our first office in 1994, which was furnished with hand-me-downs from my mother’s summer house, to a bigger one, then an even bigger one in 1999. Next came a California bungalow (the thinking being, I would save money on hotels by sleeping in the bedroom—guess how much we saved), then an office on Wilshire Boulevard.
Remember the Internet? We made a lot of money from those people, even though I could barely send an e-mail. I opened my San Francisco office just a few months before the bubble burst, and we had our first taste of big losses.
We went from $5 million a year in revenues in 2001 to $3 million in 2002. Both years, we lost money. And, of course, we were one of those companies that had fashion events planned for 9/11—ours was for David Yurman. Enough said.
Still, I thought I could beat it. No layoffs for me: I’ll downsize through attrition. The trouble with that is, if you pay your employees well, they don’t leave.
MARCH 5 If we’re going out of business, how come I’m so busy? Oscar clients are calling with what used to be fun questions. Comme des Garçons needs a strategy for its fall fragrance launch. A photo shoot—in my office, of course, to save money—is set for a fashion client. And there’s the Screen Actors Guild party for People this weekend.
Did I mention that guys arrived at my apartment today to tear down a wall and remove a second kitchen? The timing seems less than ideal.
I get up my nerve to call the IRS to ask for a field visit and a payment plan to deal with my federal taxes. After telling me yes and nicely but firmly refusing to give me a confirmation number (“We don’t do that; your confirmation will be when they come”), they respond—perhaps by coincidence, who knows?—with an “Intent to Levy Funds.” Another colorful piece of mail with green stickers and red stamps. This is called having your assets frozen. (Do they keep? I wonder.)
MARCH 8 Los Angeles. It’s hard to travel with no money, I learn. Checks are bouncing left and right. I bounce a check to my contractor, and after I explain my situation, he miraculously agrees to keep working. “If you are going to lose your company, you’ll probably need to be spending a lot more time in your apartment,” he reasons.
People editor Martha Nelson has asked us to make tonight’s party at Koi more private, so I decide to jury-rig four sets of curtains so the guests from CSI, Sex and the City, and 24 can eat their free meal in peace. Normally, I’d have five staffers to facilitate this, but I can’t in good conscience ask my L.A. girls to help when I already owe them money. So in between really depressing phone calls, Eleanor and I go to Diamond Foam and Fabric to buy material, tension rods, etc. Eleanor has to pay with her credit card, which makes me so embarrassed I almost cry right there at checkout.
By now it is becoming clear that I have to cancel my Oscar suite. The combination of war jitters on the part of sponsors and a cash crunch on my end makes it undoable. By a weird coincidence, the guy who books me space at the Mondrian, Troy, is at the restaurant the night of the People party. To cancel on the presidential suite, two adjoining suites, and several sleeping rooms just weeks before the Oscars—in the middle of a packed event—hey, that’s cruel and unusual punishment. He takes it well.
MARCH 9 At the sag awards, people keep trying to book appointments to come to my Oscar suite. This one wants a manicure. Vogue and E! want to send cameras. I’m wondering if it was so smart to go out. March 11 For the second time, I am stuck out of town during a snowstorm, this time making difficult calls to clients and vendors. To some, I’m simply announcing that I am canceling my Oscar suite. To others, I tell the longer story: that we’re closing up shop in the next few weeks. Despite the fact that I have finally achieved platinum status on American, I lose my business-class seat. Figures.
MARCH 12 Back in New York, my staff and I have a sad dinner as I try to deliver the bad news. Of course, between telling them how long they can expect health coverage and whether their keys will still work, we also have an event list to plow through. But the mood picks up, and soon they are all in my apartment examining the new construction zone (it’s a horror) and we dance and sing till 2 a.m.
MARCH 13 No rest for the weary. Tonight is Steven Cojocaru’s book party. It’s our last event, but nobody knows, and we pull it off. Lots of fancy people. Cynthia Rowley brings her kid. We’ve taken over an old embassy on the Upper East Side, loaded it with fresh pillows, and no one wants to leave. We hire all these exotic birds, which are a big hit until one of them bites InStyle’s Charla Lawhon, who is a good sport. At the end of the night, we are all so tired; Alexis from my office, sharp to the end, forks over the last $200 of petty cash (“I hid it”) to get us off the hook for cleaning up the next day. At this point, all my employees know that I can no longer pay them. For them, the game is over but for the cleanup.
EPILOGUE How does it end? Who knows? My lawyer initially tells me it takes six to twelve months before I can finalize a deal with the government. At that point, if there’s any money left, the other vendors and creditors get paid. Later, he admits the whole process can take years.
“You need to find a new source of income,” he tells me. Right. Getting to that.
I have to send an official letter to all active vendors and clients informing them of our news. We have only two weeks to clear the premises of ten years of detritus. Maybe we’ll have a sample sale.
My hope is to go back to writing, which is how I started my career—at Time Inc. I’m thinking of writing a book, or maybe pitching a TV show. Picture it: PR, just like ER but different. Shot in fast-paced documentary style. Each week, the clever and attractive team throws a fabulous party and grapples with a new, hair-raising crisis. This week, the bottles of perfume don’t arrive in time for the fancy launch party—what will they do? Next week: Anthrax Alert! An erroneous report causes hundreds of freshly tissued, ribboned, labeled, messengered gift bags to be rudely turned away at their destinations. Worse still, as the bags sludge back in, now all slightly but irreparably creased, the interns revolt and refuse to redo them. (This really happened. As I always say, you can’t make it up.)
One door slams shut, another opens.