Re: nbkg549 RE: BOK relationship/Kaiser 29-Jul-08 12:15 pm
You respectfully say, " Remember, Mr. Kaiser is quite a savy gentleman surrounded by quite a few other savy people..."
Kaiser Francis Oil Co. can be seen on the list of 900+ list of creditors ($amounts not listed in the Chapt. 11 filing). Yes, Mr. Kaiser has done little wrong in building an energy/banking conglomerate that had him in the upper ranks of the latest Forbes 400. But he slipped up big time here, and the reason(s) beg an answer.
After getting his MBA from Harvard, George returned to the Tulsa O&G firm founded by his father, and has built it to the top 3 natural gas producers in the state. His Kaiser Francis staff employs and has access to the energy futures market, so his bank's energy department dealings with Kivisto/SemGroup were understood and should have been closely advised and monitored. It wasn't, so what likely happened that nailed him (that new personal $188 million loan), his energy company, and his bank(He owns over 50% of BOK)?
How did George manage to let himself get "Kivistoed", when according to you and nearly all others of us, he is "a savy gentleman surrounded by quite a few other savy people...". Did George leave his guard down?
He turned over his CEO title to Stanley Lybarger effective 1/1/96. Stanley also dominated the credit committee where the bank's biggest loans/accounts, like SemGroup, are discussed and either approved or denied. Stanley took BOK on a multi-state acquisition odyssey that has proved very successful.
Lybarger and Kivisto were on the KU Jayhawk campus together in the early 70's where Kivisto was a big basketball star and Lybarger was and is a big fan. Kivisto moves to Tulsa after leaving Koch Industries after 17 years in energy marketing. He soon finds his way to BOK, where the forerunner of SemGroup is given a $65 million credit facility to launch his own multi-state acquisition odyssey, including a new venture into dominating the asphalt business. Kivisto is invited on BOK's board. Life is good with ringside seats to all Jayhawk sporting events. With a little effort and some luck in the energy futures market, these old buddies can actually see a path to joining George on the Forbes 400 list, and nothing or nobody's going to stop em'; THAT IS, UNTIL THEY COME UP A FEW BILLION SHORT WITH THE NYMEX BROKERAGE ACCOUNTS. Yes, it looks like Mr. Kaiser could have been led into a rare moment and caught with his guard down. I wonder not if, but when, somebody's going to pay the price for that??? Rating : (No ratings)
The so called Chief Credit Officer-in-waiting was the ramrod on this relationship. He's the one that created a structure that could not be sufficiently sold down. He's the porcine bugger that should find himself selling pencils on the street corner.
Why Pickryl? How was he the "ramrod"? Pickryl is a relative newcomer in the BOK scheme of things, and absolutely doesn't have the stroke to keep the lid on a pile of crap for months like SemGroup. It didn't just go bad overnight, and Lybarger runs the bank as CEO and calls the shots, unless Kaiser gets involved. He brought Kivisto to BOK; not Pickryl. Lybarger and Kivisto go back almost 40 years to the campus in Manhattan, KN, and KU Jayhawk blood is thicker than water.
As somebody said today on the SGLP board, "maybe Lybarger's only sin was to cover and downplay a huge deteriorating situation that he had brought into George's bank a few years earlier, and then had used his CEO/"old KU buddy" status to finance scores of acquisitions and diversification into the asphalt business (ASPHALT....kinda sounds like a rectal problem, doesn't it?). I'll bet Stanley, who was "on cloud 9"...th floor for a long time, is trying to keep a low profile these days, and maybe is praying that he can just quietly slip into early retirement, without having to develop the usual "health problem" mode of defense."
What makes you say it wasn't closely watched? Similar situation happened at Enron, Dynegy, AES, CMS, Calpine, Williams, El Paso, Reliant, et al merchant energy companies...
Hey, I don't disagree that the whole situation stinks. But, it's wrong to hold BOK responsible for the whole thing! Lots of banks are waiting in line with about 900 other creditors! Looks like they ALL are taking a bath. This stuff happens even when fraud isn't involved! How do you think business gets done all around the world? - through relationships. People do business with people they know and trust - looks like that trust was broken....but not just between Kivisto and BOK .....Kivisto & everybody...
Who do you want to pay the price? Kivisto's life (and that of his family) is over as he knew it. The litigation (civil/criminal) will haunt him/family for years... George is paying. How much market value has he lost since all this hit? Since BOKF is one of his largest holdings, I'm sure his Net Worth took a little dive (at least 30% since July1. Sounds like Lybarger has done a decent job, but he's not the one who committed fraud (alledgedly)! Are you 100% accurate in your job at all times? If you're an air traffic controller or pilot, I certainly hope so. In trading, the sentiment is if you are right 60% of the time, you're a genious....