Claude Simon 71 Tonjes Road Callicoon, NY 12723 Chronological History of Residence and Employment RESIDENCES 1956-1961 Age 0-5 Years 1513 Belmont Avenue, New Hyde Park, New York 1961-1974 6 Edwards Lane, Glen Cove, New York 1974-1975 Brandeis University, Waltham, Mass 1976-1977 Parkvale Street, Allston, Massachusetts 1977-1978 Quint Street, Allston, Massachusetts 1978 6 Edwards Lane, Glen COve, New York 1979 Hill Street, Glen Cove, New York 1980 Woolsey Avenue, Glen Cove, New York 1981-1992 6 Edwards Lane, Glen Cove, New York 1993-1996 6 Edwards Lane, Glen Cove, New York 71 Tonjes Road, Callicoon, New York 1996-2006 Sessions Street, Soperton, Georgia 2006-2007 Third Street, SOperton, Georgia 2008-2009 Brightwood Commons, Brightwood, North Carolina 2009-2010 Orange Drive, Elon, North Carolina 2011-Present 71 Tonjes Road, Callicoon, New York Employment My employment has only ever been for Veratex, Inc., a small textile converting business started by my father in 1974. Summers and Breaks 1974-1981 I worked there every summer and break during college and law school doing whatever I could to help. I typed invoices, kept records, ran errands, typed letters, cut samples, etc. 1979 Our house in Glen Cove burned down. No cause was ever found. We rebuilt it with the insurance money. It took 3 years. We lived in 2 other rental houses in Glen Cove during that time. 1981-1988 I graduated from Law School and passed the bar (2nd time). I worked at Veratex doing converting, purchasing, sales, IT. I hired some people to help. We moved our offices from 168 Madison to 160 Madison where we rented the 4th floor for 2200/month. 1983 My father had heart by-pass surgery. We thought he would die. We were very scared but he came through strong. His mother died that year. His younger brother died the next of pancreatic cancer. They were very close. They were brought up in an orphanage together. We had an opportunity to purchase our premises in New York for 1 million dollars. We didn't have the money but the seller was willing to take a mortgage. It turned out that another tenant in the building had the right of first refusal to buy the building. So we put together a limited partnership with all the tenants of the building to buy it. It was one of the first, "commercial coops" in New York City. The legal structure was recommended by the building attorney at the time. It was all very new. We needed a general partner to hold title to the real property and contract for goods and services. That was 160 Madison Avenue Owners' corporation. The rest of us were limited partners. The building never made any income during the years when we were all owner occupants. In fact, because the interest on the mortgage from the previous owner was running 9.5%, the building actually had los ses. 1989-1996 I worked at Veratex on major accounts and handled all the purchasing. During that time, the business was not doing that well. My father took a part time position at Glen Cove Golf Course. I was pretty much running the business, commuting back and forth from Glen Cove, sometimes staying over, sometimes going up to the country (Callicoon). Other owner-occupants of 160 Madison Avenue were reaching retirement age. THe vacancy rate of commercial space in that category ("C") was very high. Our shares weren't worth much more than what we paid. New York was a dangerous and dirty place. I stayed over at the office many nights. There were prostitutes on the street in front of the building. There were shootings. The building was burglarized 3 times in one year. The building next door was the victim of an armed robbery. Around the corner at the stationary store, the owners son was murdered at 3am. I didn't make very much money but I had very low living expenses. I lived with my mother and father most of the time. I had several girlfriends during that time where I could stay. I had a couple of buddies where I could stay. My father had a flat on 12th Street where he stayed. I stayed there once in awhile too. I mostly worked long hours. I entertained customers, programmed and installed our first computers (still works), revamped our record systems and made it into a functional business. My brother worked their too but not too hard. My father's sister was our bookkeeper for awhile until we got in a big fight and she quit. We stayed on good terms but the new business was not for her and she couldn't answer to her nephew. I took a leave of absence after a nervous breakdown. My father continued to pay me my little salary. He was a great man. I went back to work I needed help. We hired a few younger people and I trained them; clerical, accounting and sales, about 7 in all. I worked hard and didn't take a big salary and didn't spend much money. I never even owned a drivable car until 1992 when I bought 71 Tonjes Road, Callicoon. It cost $200,000 and I got a mortgage from Citibank to buy it. I think I put down $75,000. It was a broken down old house on a large property in a great area 2 hours from NYC. It was and had been a summer home for 30 years or more. It was cold and drafty in the winters and really just barely functional. At some point during those years, my father transferred ownership of Veratex over to me. He was starting to feel like he could drop dead because he had the bypass and his brother had also died. I was doing mostly everything. At first, I was 90% owner and my brother was 10% but my brother didn't do much except complain about paying the taxes, so I became 100% owner. I was still the lowest paid employee at Veratex, working for the future. I managed to save about $100,000 which I put into a sarsep and lost everything in 1987. The first owner occupant at 160 to sell was the 2nd floor. They were actually doing very well and needed more and better space. We made a deal for $200,000 but then our 3rd floor partner decided that he wanted to support the ground floor partner in buying it which he could do based on the partnership agreements. There was a big fight. It turned out that the 3rd floor partner just wanted leverage because he actually wanted to retire and sell too. So I bought the 3rd floor partner out for 100,000 and I also bought out his 1/3 interest in 6 and 7. My father had another 1/3 of 6 and 7 and another partner had the other 1/3. That third partner said, "Me too?" and I bought him out for the same amount. But the ground floor partner got the 2nd floor. 1996-2007 The textile business was in serious decline in the U.S. Mills were closing. We didn't own any mill. We "converted" which is to say, we outsourced our production. By 1996, there was what turned out to be, a short-lived contraction which left us without production. I didn't know how bad it was going to get. My father tried to discourage me but I decided to build a small mill for our production needs. He would not lend me any money for it. I was going to try to borrow the money. I had a building picked out in Ellenville, NY owned by Imperial Shrade. The price was good and they were willing to give me a mortgage. But the contract negotiations went bad. The contract was up to 22 pages and they were asking for more and more. Many textile people had relocated south because of the cost. I started to look and found a beautiful building in Soperton, Georgia, for a reasonable price. The local bank was willing to finance at 80% of prime. So I moved to Georgia. I told my mother I would be back in 3 years. I didn't return for 14 years. 1996-2006 Sessions Street, Soperton, Georgia. I lived in an apartment about 400 yards from the plant. My hours at the plant were something like 7:30 am to 11pm, 7 days per week. It was all to no avail. We had sales enough to run the plant but I could never put together a good enough crew that would stay working. We were up to 3 shifts per day for a little while but people just quit and moved on a lot. It wasn't like they quit for more money, they just got tired of working. I did too. A woman I had met in New York before I left came down regularly to visit. She moved down from New Jersey to stay with me. Her name was Carolyn. In 2001 I had heart bypass surgery. It was a big job. I was a mess. I had never smoked, was never overweight, exercised. But the stress and the genes was enough. I told Carolyn to go back to New Jersey. She said she wouldn't. She stayed. We got married. We had two boys in Georgia. We would go back to New York for holidays twice a year or so and stay at the farm in Callicoon. It was a retreat. We talked about retiring there someday. I came close to pulling it all together at the mill when I hired a very special man who learned how to run the plant. Prior to that, I was everything, running from here to there, fixing, calling. I unloaded trucks, threaded machines, sold goods, negotiated contracts. We started making progress. I had 2 good mechanics, a few good operators and a couple of good supervisors. But again, things started to fall apart faster than I could fix them. One supervisor quit. A mechanic went to jail. Another supervisor fell victim to drug abuse. Then when I was in Callicoon, my plant supervisor called me and gave notice. We packed up and drove back to Soperton. We had one boy, Charles, then a second came 2 years later, Henry. The little apartment wasn't big enough so we moved to a beautiful house that cost $100,000 which I paid for out of a home equity loan I had taken on 71 Tonjes Road, Callicoon. During that time, the partners in the building who owned the ground floor and 2nd floor had a falling out amongst themselves. I bought out the partner who had the 2nd floor for $320,000. My father loaned me most of the money. He also gave me his share of 160 Madison Avenue. He made me promise to take care of my mother and brother after he was gone and I did promise that. Also, he said, if my sister needed help, I would have to be there for her. That goes without saying. My father and I were very, very close. We worked, fought, ate, drank together. We thought the same things about work and family and life and love and death. He understood what I said and I understood him. We had different personalities and different characters but we shared a vision and work ethic. In 2006, tHings in New York started to go bad with my father. I could tell on the phone he couldn't really follow conversations. He stopped answering emails. He was getting old and forgetful. He couldn't remember things anymore. I knew I had to get back to New York somehow. He was taking care of the building maintenance and repair. The staff I had left behind in New York handled the bookkeeping and the textile operations of Veratex. I supervised from long distance but I had 3 people who had been with me for 15 years who were taking care of Veratex operations (the converting). I was engaged in plant management and plant sales and fabric development. I made the decision to close Soperton and move back to New York. I had a heart attack and a round of stents. We had done okay, though. We hadn't lost that much money in Soperton. If we could sell the building, we might come out close to even. Then in 2007 I got a call from a close friend who ran a similar mill in North Carolina. He was the plant manager there. He said they were going to close that mill as well and that we could buy it. We agreed. The seller agreed to lease the building to us and apply the lease amount to the sale price if we decided to buy after 3 years. It was a perfect, great opportunity for us to get back to New York. We would move to North Carolina temporarily and once we were settled, we could move back to New York, leaving my partner in charge of the mill. So we closed the mill in Soperton, Georgia in 2007. We packed up 18 tractor trailer loads of machinery and equipment and moved them to this much larger, already operating mill in North Carolina. It was a huge step. This mill was 10 times more than we needed but it had its own customers so when we added our business to theirs, it made sense. We made money the first two months. Then we lost a large customer. Then another to imports. We were losing money but not that bad. Meanwhile, my father had been negotiating with the ground floor partner about buying him out. They had never gotten along. He wanted $800,000 but my father said never. I wanted to buy but not without my father's blessing. Each time they had a negotiation, the price would go up. I couldn't take it any more. He got to 1.5m and I bypassed my father, called him and we made a deal. I took a loan from Intervest through a mortgage broker for the entire amount plus 200k = 1.7m to buy out the last partner. The interest terms were not that good. It was 6.75%. We paid tons of fees, attorney fees, costs. There was a penalty for prepayment. And to top it off, I had to give them a security interest in the whole building. AND it was a ballon due in 3 years. But I bought it. I figured if I could rent out the retail space, the cash flow would work. I did almost of this from North Carolina through my attorney in New York. A large customer of VRTX went out of business and we got caught for 150k. No bankruptcy, no payments, just closed and gone. We managed to find their customers and pick up some of the business. Then in September, 2008, my best friend in the business died in a car accident. He was our largest supplier and our largest creditor. Based on our personal relationship, he would give us extended terms without a credit limit. Of course, he knew that I owned 160 Madison Avenue. I knew that things would change after that and I started to think about ways to recover when the recession hit. Our business went down virtually overnite. My partner was stubborn about laying people off and part of me knew that he was right because of how hard it had been in Soperton to hire and keep people. It was a scary time. The stores in North Carolina were full of sales and were empty. The retail space that I now owned at 160 was still vacant. The building income was dead even but the cash flow was worse. The interest was something like 14k/month. Some tenants were having trouble with their rent. ONe was way behind. Another wanted a reduction. We had consolidated our offices to one floor. There were only four people left including my father. My bank account was empty. My home equity loan was maxed out. I had no retirement money to speak of. My father had taken a home equity on the house in Glen Cove and it was up $200k. My brother had quit to write a book. I spent 2009 trying to sell textiles and rent out the retail space to no avail. No amount of effort or ingenuity that I could muster could overcome a dead market in a dying industry. My family was healthy. I never realize how much money a mill could lose on a monthly basis. We were reducing expenses as much as my partner would allow. I renegotiated the lease with the owner, sold off the machines and equipment that I brought from Soperton, closed out inventory, and took advantage of all of our vendors. Then CIT, our commercial factor called and dropped us. Something about TARP scrutiny. They didn't want small clients any more. I sold the house in Soperton and that money was gone fast. I leased out the builing in Soperton which hadn't sold and the tenant didn't want to take possession. He paid a lump sum to get out and that money was gone. I shut off the power in Soperton, fired the watchman. We cut the health insurance out and started to lose employees in North Carolina. My father's sister died in 2010. Then out of nowhere, things started to turn around a little at the mill. It was the cash for clunkers program that increased the demand for automotive fabric that go us busy again. We started to make money back. I knew I couldn't afford to live in New York metro area. I had followed the housing costs. We decided to move back to Callicoon full time. THe handwriting was on the wall for the NC mill. It couldn't really last much longer, just long enough to get some of the losses back. We moved back. My father was getting very sick. He was still coming to work but he had kidney cancer and pretty bad dementia. I got a call from the owner of the lot next to 160 Madison. He had called me many times in the past about buying or building as part of a develpment project but nothing ever came of it. I doubted he even owned the lot next door. But he was in deep trouble too. He had invested many millions of dollars into the lot and demolition before the recession and now his project was stalled and the bank was getting ready to foreclose. I had heard the banks already had taken possession. He asked me how much and I said $10 million. He agreed and said his lawyer would call but he never did. It was another wild goose chase. A year went by. We were now living in Callicoon. My partner was running the plant. It was making a little money back but the lease was running out and it was time to decide whether to buy or not. It wasn't really a decision. I didn't have the money any more and all resources had been exhausted. I also doubted whether there was any long term prospect for success with imports flooding into the country. I had really given up on textiles. My staff in New York City ran the Veratex converting operation as they had been doing since I moved to Georgia in 1996, my partner ran the plant in North Carolina, my father was still handling the building maintenance and repair but he was deteriorating and my bookkeeper kept the books and gave me the bad news month after month. There was no need for me to go in to NYC other than visit my father and mother in Glen Cove. I did some maintenance on the building in New York, met with a broker a few times, not much. I took my Dad out to lunch. A year went by and the owner next door called me and said he was ready to buy. My father didn't want to sell but he wasn't thinking straight anymore. I told the buyer fine but 11m now. He agreed. No word from his lawyer. Then he called me up and said he wanted me to meet his money man. I agreed and met them at a hotel in NYC. He asked me how much I wanted and he said, "I'm going to give you your asking price." We shook hands. By the time I got back to the office, his lawyer had called and the deal was on a fast track. It took a year to vacate the building and close. During that year, we also closed the mill in North Carolina and laid off 36 people. The machines and building were leased so we basically just walked away. We sold what was left from Soperton to a machinery dealer for ten cents on the dollar. I sold the building in Georgia for next to nothing to stop the bleeding. We had a big 90th Birthday Party for my father in 2012. We closed on the sale of 160 Madison Avenue the next month. We paid off all the outstanding debts, loans, accounts payable. I bought a studio apartment in NYC so I could stay over when I was in town. I bought my father a good hearing aid which he lost because of his condition. We rented a space on Fifth Avenue for offices. My father passed away in 2013 at age 91. We still live in Callicoon, New York. I don't travel to the city that much anymore. My staff handles Veratex which continues to decline. There are only two left who I hired in the late 1980's. I spend most of my time fixing the house. It's cheaper than contractors and it's good exercise for my heart. I don't know many people because of my heart condition. But they know me at the lumber yard and the dump and on the road where we live. My kids are in Sullivan West Elementary School. They have been in Bethel Woods productions of Cinderella, Babes in Toyland and the older one is in Amahl and the Night Visitors being produced up here by the Delaware Opera Company. They are 10 and 8. You can google Delaware Valley Opera or Bethel Woods and see their names in lights. My wife is a stay at home Mom. She knows everyone in Western Sullivan County. We're having a large house party on Christmas Eve. You can check her facebook page, Carolyn Simon. My mother still lives in Glen Cove but had a stroke in May, 2013. She has live-in home healthcare aide. My brother lives around the corner. I pay all her bills personally. I also pay my brother's bills personally. I go down there once a month to do her prescriptions, say hello to them and fix whatever's wrong in the house. My Dad's in an urn in the garage, waiting for me to let him go.