The sad story of a multi-milllionaire's downfall, Part 1
Filed under: Wealth, Recession, Bankruptcy, Recession Diaries
The Great Recession of 2008 and 2009 has hurt not just the everyday working person, but also those who harbored big dreams in real estate only to see fortunes vanish as the bubble burst. In this Recession Diaries three-part special, developer Paul Pierce (whose name has been changed) shares his story of boom to bust through exclusive WalletPop interviews and excerpts from the diary he began writing hours after the biggest deal of his career fell through -- leading to losses in excess of $40 million.On Saturday, Nov. 1, -- All Saint's Day, as he knew from his Catholic upbringing -- Paul Pierce walked into a Philadelphia Rite Aid store, plunked down two bucks and bought a notebook with a marbled red-and-white cardboard cover, the kind grade school students use to do homework.
Then he returned to his luxury home in the Society Hill neighborhood just a few blocks away, a double-lot house that developers like Pierce dream of building or buying for their families once they hit it big.
His stomach in a knot, he sat alone at the island in his spacious, modern urban kitchen, and started scrawling:This is the diary of a guy that started his own real estate firm. He graduated to retail development and thought he was pretty successful. On paper, his net worth was close to $30 million and he enjoyed luxuries that most people well off enjoyed. But soon, without knowledge, he lost it all and his company.
Had he "lost it all"? Though a high-flying real estate wheeler-dealer, Pierce was not given to exaggeration, especially in a brand-new journal for his eyes only.
Only 48 hours earlier, he stood poised to close the biggest deal of his young, promising career. It would bring Target, Mervyn's, Lowe's and Best Buy to a mammoth suburban shopping center. But while Pierce had seen banks tighten their belts in previous months, he hadn't counted on the recession denting Target's sales to the point where they'd cut off construction of new stores -- like the one they'd promised him weeks earlier.
So Pierce was utterly unprepared when the Minnesota-based retailer pulled the plug during a phone call the previous day, a very scary Halloween. Then Lowe's caught wind of what Target had done and followed suit. Then more retailers backed out. The dominoes were tumbling.
"From a retail and financing perspective, the music stopped. It completely, 100% stopped," he recalls.
The project had taken Pierce years to arrange. He'd signed guarantees worth tens of millions of dollars, never thinking for a moment that the banks would have to come calling for their money. But in less time than it takes to hold a 24-hour clearance sale, Pierce's shopping center was dead. Pierce thought he was finished, too.
I never have been so buried, so depressed in my life. I don't think there's any chance I can conceivably ever get out of this Hell!!
For Paul Pierce, a Pandora's box of financial and personal nightmares had just taken flight. And like a prop from a Charlie Chaplin tramp film, the cardboard-bound journal became a humble, almost farcical blotter of solace as his corporation collapsed, and his net worth plunged into the negative eight digits.
Even the dream home he'd moved into just months earlier now faced a very uncertain future. So did his marriage to a patient Southern woman with a sharp sense of humor and copious coping skills. She was a teacher and longed for domestic sanity and stability, not Pierce's money. That week, Pierce wrote:
Came home and wife commented that I should fire two of my associates. Her point wasn't taken well but necessary; she was feeling that they were taking bread off our family table. She's willing to sell her jewelry to make ends meet.
So what made Pierce start the first diary he's ever kept? He couldn't pretend that keeping a journal would make total sense of his free fall, or that he'd find the insights to fix what the economy had irreparably broken. Instead, he used paper and pen to vent, to record events, to ask rhetorical and often bleak questions, and to claw to the heart of a yawning chasm in his life, one that predated his financial hole. He sensed that an inner emptiness had haunted him for some time -- even months earlier -- while deals still cruised through, before the real-estate market tanked, back when his Midas touch turned land to gold seemingly at will.
Pierce's self-styled assignment: To confront those gnawing feelings and make changes. Permanent changes. But first, he would have to fight every temptation to give up, and beat back recurrent thoughts of harming himself.
Tues. Nov. 11: Saw my therapist and told her the inevitable is going to happen. Bankruptcy. I now need to structure to protect my family. This is my worst nightmare. If I got hit by a truck it would either be over or I would have an excuse...
Click here to see the entire story
Reader Comments (Page 1 of 2)
10-01-2009 @ 12:16PM
Yadi said...
I hit 100+ blogs/news stories every day.
This story, though starting off good, became an utter waste of my time... a few paragraphs and then boom... wait a week.
Do you really think you'll drive traffic by spreading this story out over weeks?
I have a relatively longer attention span than most... and this is just simply annoying.
Publish the story or don't. You are not J.K. Rowling, and this is not Harry Potter.
Reason enough to explicitly NOT come back.
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10-01-2009 @ 12:46PM
Nijo said...
I conquer with Yadi; good story and then BOOM, come back next week.
Let us know when the WHOLE story is published...
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10-01-2009 @ 8:18PM
Tom said...
This article came via a tweet (who I forget)...I read 100s of articles and pieces a day (work related). There is way too much stuff, too many articles out there for me to return (I won't remember).
I suggest writing great stuff all the time (or post when you have written something great) - that's the surest way to build a herd of readers.
Good luck.
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10-01-2009 @ 8:26PM
Lou the Author said...
The article is split up because there's a lot of ground to cover. That's it. It is not a stunt. That's reading WAAAAYYY too much into it.
To those who would not play nice and keep the posts civil, too bad, so sad: You'll just get deleted. Fair objections are one thing; assassinating the character of a guy who lost everything is another. And it doesn't play well here at WalletPop.
It's wrong to think that rich people do not have problems. Their problems might be different from yours and mine, but they suffer heartache, loss and tragedy. Paul Pierce never ripped a single person off. He worked hard, starting with nothing.
To attack him just because he had money at one point is to be, without a doubt, "poor" spiritually.
Or perhaps bankrupt is a better word.
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10-02-2009 @ 10:24AM
jung1 said...
Wheeler dealers caused the economical collapse. Most of them are still rich! Mr. Pierce was doing a necessary job. Lets face it, without developers construction workers don't work. I went from a good middle management job at a respected plumbing construction company to doing handy man work just to get by. Hows that for a kick in the ego! Savings gone, credit cards maxed, don't know where the next house payment will come from. I wish Mr. Pierce the best and hope the economy changes soon. Rich, middle class, working poor, or poor, we're all in this together.
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10-02-2009 @ 11:21AM
Dilia said...
This article is good reading. I would like to see how this was resolved without him harming himself or his family. Sometimes hear about so many personsy who arrive to this dilemna and give up. Keep up with the story, not just so far apart.
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10-02-2009 @ 11:22AM
Lou the Author said...
Thanks Dilla! I wish we could time this closer. We'll work on it!
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10-02-2009 @ 1:56PM
Greg said...
This is interesting and timely. I have done well by most standards, but not wealthy by any. I have had the opportunity to meet with millionaires and a billionaire. Some made the money, some inherited it. One thing I was taught by a person who went from middle class to millionaire too fast...only to lose it like this character...is that once you have made it the second time is much easier! Good luck to our character.
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10-02-2009 @ 1:58PM
Sharan said...
People all over the world have dreams and do NOTHING about them. They are just that--dreams. But you had a dream and you followed it. You are not a looser, you are 99% better off then most everyone else, because you followed that dream and that takes golockas... BIG GOLOCKAS !!!!
Small minded people are jealous, they feel like they deserve something they did not work for. If you had it and lost it, that gives them something to feel better about themselves. You did it once,
Dream another dream, follow that dream, your pockets might be small right now but your GOLOCKAS ARE STILL BIG. GO GET EM!!!!
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10-02-2009 @ 1:58PM
E.R.S said...
i can relate years ago joined national guard while i was in high school. out of school i opened my own auto detail shop was making 500. a week take home after all other bills then work stopped and had to take a 150. a week job and it was like ok dont quit get tough and dig yourself out of this hole someway that was 20yrs ago and im just trying to get by today. long story short u will see that if u have will there is a way but at times it seems like yesterday.
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10-02-2009 @ 1:59PM
crazydmp said...
He needs to talk with Donald Trump, isn't the number one
rule, never use your own money, and who can tell him
which one of the government programs he should have
used.
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10-02-2009 @ 5:43PM
Mike said...
I don't harbor any ill will toward people like this ex-millionaire, but it's hard to work up a lot of sympathy for him. Yeah, he worked to get where he was (although the article suggests he didn't have to work too terribly hard) - I get that. But, I've been working for quite a long time myself. I still don't have a big house on Society Hill. I still live in a pretty mundane middle-class neighborhood and drive 10-year old cars. At least this guy got to enjoy the high life for a while, and, if he's really all that sharp, he'll make it through. I just think it's a little irksome to see an ex- millionaire portrayed in the same light as a working class joe who was barely getting by to start with.
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10-02-2009 @ 6:10PM
irsterling said...
The best in our nation have been bankrupted once or twice before, before hitting it really big. You usually don't learn to ride a bike well without scratching up your self pretty badly. This depression was orchestrated and the average guy has gotten killed on it. Don't give up , their wll be other chances and you will be a wiser person for the past experiences.
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10-02-2009 @ 5:38PM
Hobart said...
If he's so rich, why isn't he smart ? ? ?
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10-03-2009 @ 1:06AM
carol said...
I'm living something like this right now. We were not millionaires but my husband was making very good money in the mortgage business. He lost his job just before the melt down and cannot find another job (he was a top executive).. He should have been at the age to retire but sadly he didn't prepare for our future and there is VERY LITTLE in a retirement account. We now face foreclosure, bankruptcy and tax liens. He still cannot find a job and I've always worked a retail part-time job - certainly no where near enough to exist on. We don't know what to do just to exist. How do you go from being a top executive living a nice life-style to being on the brink of homelessness?
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10-02-2009 @ 9:38PM
Mike said...
Jeff -
What exactly made you read this article ? Was it the title " Multi - Millionaires downfall " ? Did that spark your interest ? Were you so eagar to read how this person fell from grace ?
Understand one thing, this great Country needs risk takers and go getters like Paul to keep the economy running. People like him provide jobs, and boost tax revenues. People like him spend money and support local small businesses. People like him support charities and donate their time. People like him make a difference.
He dosen't want or need your pitty and certainly dosen't need the harsh words directed at his family.
We need to hope he gets back on his feet and continue taking those risks and continue to inject life in this otherwise dead economy.
best of luck to you and your family, Paul.
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10-03-2009 @ 7:53PM
coconut said...
It takes courage to write in the first place, it takes more courage to publish your failure or downfall. What is the motivation.
I thank you for sharing because you are helping others in knowing they are not alone. also to help resolve their issues
I just hope you didnt get stuck in this recession
the best thing on your side is that you are a survivor and you have knowledge . Your experience will help you survive if you dont allow yourself to get stuck or get desperate.
stuck meaning just that you just stop living and just exist.
Im with the other's it very hard to just stop read without going on.
I call it an extended vacation because vacations put smiles on people faces.
more power to you and yours and kiss your wife for hanging in there
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10-03-2009 @ 11:42AM
julie said...
To Lou the author: When you have money that you worked very hard for seems as the rest of the world thinks you got it for nothing...soooooooo don't let the comments bother you...They have said and I believe it that once you have made it on your own and loose it all you will make it again. The wealthy pay 60% or more of all federal taxes in this country and I am sure you paid your fair share plus look at the number of people who had jobs because of your ventures and hard work. I wish you the best and a speedy recovery. And to all others out there...Pay attention to what is happening to our economy and help work for the betterment of our country...Freedom is Everyone's job...
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10-03-2009 @ 11:40AM
Vernon Tuck said...
My dad who is 89 told me this was going to happen. I am 28 with a family and didn't believe him. I asked him once what a perfect economy looks like and he said it is one where people live off of their needs and don't cave in to their desires. I feel for you Paul I know that was a hard place for you spiritually but I hope that you find joy in the smallest of things other than money throughout this process. Remember at the end of yourself is where God begins. Blessings.
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10-06-2009 @ 8:46PM
TERRENCE7 Terry_Sieben said...
. I CAN TRUELY FEEL YOUR PAIN AND FRUSTRATION. YOU ARE A MAN WHO I KNOW CAN AND WILL RISE ABOVE THIS SMELLING LIKE A ROSE.
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