By Ryan Yousefi
By Chuck Strouse
By Terrence McCoy
By Terrence McCoy
By Terrence McCoy
By Michael E. Miller
By Kyle Munzenrieder
By Michael E. Miller
Rudd knew, however, that the project would require more financial backing than he personally was capable of providing. So he contacted Virgilio Perez, who in turn brought in Herrera and Jaime. At that point the four men were equal partners. "As capital requirements began to expand, then of course the respective positions had to be modified," he adds.
Rudd won't comment on the specific numbers involved, but sources familiar with the deal say that Herrera and Jaime each initially put in $600,000, and that under the original shareholders' agreement Herrera and Jaime were each given 40 percent of the company, while Rudd and Perez received a 10 percent stake apiece. Rudd says he could line up the tenants once Herrera and Jaime secured the lease. "The other fellows had to fund the project with lawyers and whatever needs to be done," he said. "They had to get the lease. I am not a wealthy man. But I had the experience, I had the vision, I had everything. I put it all together. But I didn't have a big pocketbook, I didn't have the connections with the commissioners."
Although it had been widely speculated in the press throughout 1995 that developer Pedro Adrian was a partner in HABDI, the truth of the matter, according to current board members, is that he did not commit himself to the project until January 9, 1996 -- the night before the county commission was scheduled to vote to approve the deal. Although Herrera and Jaime's pockets may have been deeper than Rudd's, they were not deep enough to satisfy the requirements imposed by the county commission that HABDI's partners have at least eight million dollars in ready cash to put into the project. Herrera and Jaime needed Adrian, and following a tense negotiating session between the three men, Adrian finally agreed to join the group.
Still unsure that he would have the necessary votes during that January 10, 1996, commission meeting, Herrera wanted to impress the board with yet another surprise investor. Just minutes before the board convened, HABDI announced that it had added as a partner American Logistics Services Inc. (ALS), which was owned in part by the giant defense contractor Raytheon Corp. Word that Raytheon had joined forces with HABDI gave Herrera's group an air of legitimacy, and several commissioners cited the multibillion-dollar company's involvement as being one of the most positive signs of HABDI's ability to see this project through.
With its new partners, HABDI ownership was divided among seven individuals and one corporation. Herrera and Jaime each now owned 23.6 percent of the company; Rudd and Perez controlled 5.9 percent apiece; Adrian assumed 20 percent of the business; Manny Romero and Augustine Ajagbe (added before the commission meeting to give HABDI's board the appearance of having South Dade and black representation, respectively) each were given 3 percent shares; and ALS now held a 15 percent stake.
HABDI's cohesion was short-lived, as it did not take long before the group's infighting began. In March 1996 Herrera announced the first cash call for stockholders -- one million dollars. Each stockholder had to pay a portion of that sum based on his ownership interest in HABDI. But according to sources familiar with HABDI's finances, Jaime, who under the cash call owed $236,000, and Perez, who owed $59,000, had trouble making their payments. It soon became clear that Perez would not be able to keep up with HABDI's demands for money. But Perez did not leave the group quietly. Sources say he threatened to sue HABDI for his time and effort in the project, and a settlement was reached last summer whereby Perez was given $160,000. Perez refused to comment for this story.
HABDI's need for operating money has become a major source of friction among board members. The group has had to spend nearly one million dollars in legal fees alone. Dick Judy's consulting contract with HABDI costs the group $10,000 a month. In addition Herrera is drawing a salary from HABDI of $350,000 a year, according to sources familiar with his contract. HABDI is also leasing a Mercedes for Herrera. "That's really brutal," says one source. "Some of these guys are barely hanging on, trying to maintain their investment in HABDI, while Carlos is drawing such a large salary." Herrera reportedly demanded that the board pay him the salary, and boasted to the board that it was his political contacts that won HABDI the lease. None of the other partners are drawing a salary from HABDI.
Jaime says he believes that Herrera, working in concert with Adrian, is trying to force the group's other investors off the board so they can control the company. Rudd last week confirmed that he has reached a deal to sell his stock to ALS. "I felt that it was not prudent for any one particular group to have a majority. I didn't want to have Pedro and the --" Rudd pauses, deciding not to finish his thought about Adrian and Herrera. Later, in what appeared to be another reference to Herrera and Adrian, he adds, "I have an agreement with ALS, and I believe that the concepts of ALS are more closely aligned with my development theories." (But even ALS is not the same ALS it was back in January 1996. Several months after the commission vote, Raytheon sold its interest in ALS.)