Whiz or never-was?
Boiled down to the basics, that was the central question, unanswered at week`s end, concerning 31-year-old conglomerate builder William J. Stoecker of southwest suburban Oak Forest.
At worst, Stoecker is a crook and a fraud who put his privately held empire together with smoke and mirrors, if the case made by nine of his lending banks stands up to scrutiny.
At best, he would appear to be slipshod and inept, unable to account for or keep track of millions of dollars of real estate that at one time or another were used to secure the multimillion-dollar loans that fueled the expansion by the one-time welder and college dropout.
In Stoecker`s case, even the most benign interpretation of events is not attractive.
Stoecker resigned Friday from the company he founded, Grabill Corp. Associates insist that charges of forgery leveled against him by the New England Corp.-led banking consortium are false. They also insist that no money was illegally diverted and that they will be able to prove their contentions, perhaps by this week.
But the questions about ineptitude appear harder to deal with. As Stoecker wrote in a Nov. 9 letter to Bank of New England loan officer Donna Pellegrini: ”. . . any information I give you regarding real estate and related cash will be vague. I do not see where this is anybody`s business other than my own. You, more than anyone, understand how bad our bookkeeping on real estate is.”
And if Stoecker didn`t know how much real estate he had and what it was worth, that raises disturbing questions about the accounting firm that prepared the favorable audit on which Stoecker`s banks relied to lend him money.
Laventhol & Horwath, which according to one source last year received $2 million in audit fees from Grabill, pegged Grabill`s assets as of June 30 at $374 million and placed the value of the company`s real estate at $73.6 million. More recently, it computed Stoecker`s personal net worth in excess of $500 million.
The accounting firm last week declined to answer questions about its audit procedures.
On the other side, if the letter from the bank that gave Stoecker free rein in handling his real estate is genuine, that could put New England Corp., which negotiated the terms of the $100 million loan, at odds with its eight banking partners in the venture for failing to adequately secure their credit. Included are three Chicago banks: Harris Trust and Savings Bank, LaSalle National Bank and Exchange National Bank.
There is little question, however, that the crisis that threatens Grabill would not have occurred had the company been able to pay its bills.
But it couldn`t. Though company sources contend that it made the $3.8 million interest payment due Dec. 31, it could not make the seemingly small $2.5 million principal payment due at the same time.
Why Grabill was having trouble isn`t clear. Sources close to the company assert that it has in recent months undertaken a number of costly capital-spending programs for factory expansions and similar projects. Those are said to have quickly eaten up something in the neighborhood of $100 million.
These same sources say that most of the $100 million lent by the banks went to pay off previous borrowings. Only about $4 million was left over.
Stoecker was scrambling last week to raise cash. He reportedly was nearing an agreement to sell Douglas Dynamics, a snowplow maker that he purchased in June and kept in a corporate structure apart from Grabill. Southwest suburban civic groups and schools to which he made generous-and usually well-publicized-contributions reported that in most cases they had not received the full amounts promised.
Outside bankers and accountants believe it likely that Grabill will have to dispose of a number of its hodgepodge of businesses to pay its debts and stay alive.
Grabill and its subsidiaries own more than two dozen manufacturing and retailing companies with annualized sales pegged by Stoecker at $750 million. Among the products made by Grabill subsidiaries are sophisticated defense aerospace equipment, plastic auto parts, tow trucks, caps and machine tools. It also owns the Cook`s Cupboard retail chain, which sells gourmet kitchen gadgets, and a restaurant supply house.
In an interview with The Tribune in September, 1987, Stoecker described how he got his start in business.
After graduating with a C+ average from Oak Forest High School, he began his own welding company and said he was making $100,000 a year by the time he was 20.
He then turned to buying foreclosed houses in the distressed real estate market of the late 1970s. Savings and loans were so eager to get the bad loans off their books, he said, that they not only were willing to cut prices substantially, but they also gave him 110 percent mortgages, with the extra going to pay for their rehabilitation.
When the real estate market turned, Stoecker continued, he resold and cleaned up. By age 26, he said, he had raised $70 million in that way and began buying small-scale manufacturers, most of them in the Midwest.
Stoecker called the emerging conglomerate Grabill-the last syllable for himself, the first for his wife, Grace. They were divorced last year.
In 1987, came his biggest triumph, the purchase of the aerospace division of Fruehauf Corp. with a $150 million loan from Citicorp. It was a big-time purchase financed by a big-time bank that propelled him into big-time business.
That Stoecker grew so rich so quickly and so young did not fail to raise a few eyebrows. His wealth is ostentatious-two adjacent houses in Naples, Fla.; a palatial residence in Palos Park; a white limousine; a private jet and helicopter; and an extensive art collection.
It also raised the hackles of Forbes magazine when The Tribune noted in its article that Forbes apparently had glossed over Stoecker in compiling its annual list of the nation`s 400 wealthiest people.
In October the magazine ran an article that raised questions-but provided no answers-concerning the value of Stoecker`s real estate.
