A decade ago, Idaho?s Commerce director was awash in debt. But some say that makes him a more seasoned leader.
Jeff Sayer, Idaho?s Department of Commerce director, is the state?s head business marketing guy ? the go-to person for businesses looking to assess the risks of expanding or locating in Idaho.
And Sayer knows a thing or two about risk.
He once helped to improve a construction company in Salt Lake City and to turn around a small Idaho Falls hospital. But he also knows the bitter side of business failure.
A decade ago, clobbered by the dot-com bust and economic jabs from 9/11, Sayer filed for personal bankruptcy. He listed $38,952 in assets and $363,945 in liabilities. At the low point, he had $50 in his pocket and a business career in ashes.
Sayer?s bankruptcy never surfaced publicly as he was considered for the director?s job last fall. But he never hid it, either. Gov. Butch Otter and business leaders who in fall 2011 assessed Sayer?s leadership potential say he told them about his bankruptcy, answered their questions and left them feeling he had handled it about as well as anyone could. Several lawmakers who serve on the legislative committee that recommended his confirmation last winter told the Idaho Statesman they knew about it, too.
?I felt this was something (from which) he learned a good life lesson,? said Sen. Michelle Stennett, D-Ketchum, a member of the Idaho Senate Commerce and Human Resources Committee that recommended his confirmation.
Today, Sayer directs a state department that has 47 employees and a budget of $40 million.
His annual salary is $147,908.
As Sayer looks back on those earlier days, he says they were brutal.
?It?s a period I am not very proud of,? Sayer told the Idaho Statesman. ?I scrambled for about two years to try to salvage my situation and find a way out. It got to a point where it ran right over the top of me.?
Sayer, 50, grew up in Blackfoot. His brother, Doug, is president and CEO of Premier Technology, a Blackfoot company generally credited with steaming ahead and producing jobs through the tough economic times.
In 1999, Sayer was living in Salt Lake City with his wife and children. He went to work for Cornerstone, a venture capital firm, assessing small, young businesses as potential candidates for a cash infusion from the company. Cornerstone was trying to secure money from larger funds to invest in companies.
?We worked for about a year to get financial commitments,? he said.
Sayer was bringing home about $3,000 a month, not enough to cover the family?s expenses. ?I was taking a risk for getting compensated later,? he said.
He made up the difference with plastic. ?I was living on credit cards for that year.?
But by the early 2000s, financial chaos shook the Silicon Valley ? creating the dot-com bust ? and money for venture capital dried up, leaving Cornerstone with no money to put into companies.
?All of that just disappeared,? Sayer said.
TOO BIG A HOLE
By 2001, Sayer worked with some others to put life into Pretzelmania, a company that sold pretzels at 140 airports across the country. But after the terrorist attacks in September of that year, the business was decimated as new security regulations kept families from walking to the gate with passengers, buying pretzels along the way.
?It was more time and energy for no pay,? Sayer said.
Sayer ended up taking Pretzelmania through a Chapter 11 bankruptcy to reorganize the company in March 2002. He emerged with half ownership in a newly named corporation ? RFA Foods Inc., which stood for Rise From the Ashes, he said.
All the while, his financial condition darkened.
He took jobs as a consultant, and by 2002, he came to work for Carl Tippets, who ran Pentalon Construction in the Salt Lake City area and which does about $30 million annually in construction projects.
While there, he helped the company by establishing templates for finances and economic indicators, Tippets said. ?We still use all of those today.?
Sayer, however, wasn?t closing in on his financial problems.
So he left to work with a Portland seafood company. He declines to name the company.
?I was seeking those higher salaries that would give me just enough to start getting ahead of the monster and start making payments (and) working things out with the credit card companies,? he said.
But after six months, it was clear the move was a disaster, Sayer said. ?Wrong time. Wrong place.?
So he called Tippets and got his old job back.
Sayer said he tried to solve his debt problems. But he eventually came to realize that it would take him a decade to climb out of his financial hole. So after talking with friends and mentors, Sayer filed a Chapter 7 bankruptcy ? which is a liquidation of assets ? on April 15, 2003, while he was living in Portland. The personal bankruptcy protected his wife?s family from being drawn into his financial problems, he said.
By then, Sayer?s marriage was disintegrating. He and his wife of 16 years ended up divorcing in June 2004. His ex-wife did not return a phone call from the Idaho Statesman. He has four children and says he pays child support.
In 2008, he married Laurel Hall, former wife of one-time powerful Idaho Republican Blake Hall. They have no children.
BEHIND ON TAXES
Claims from creditors in the bankruptcy filing included more than $100,000 from credit cards.
Tax claims were $5,000 from the Utah State Tax Commission for 2002 state income tax and $3,500 from the Internal Revenue Service for 2001 income tax. The IRS also filed a claim for an estimated $15,000 for 2002 income tax.
?I was falling into the same trap as a lot of people, especially when you have self-employment income,? he said. When things get desperate, ?you often postpone paying taxes. My guess is I got to that point, and there was tax due on past income I hadn?t paid.?
The bankruptcy trustee sold Sayer?s half interest in RFA Foods Inc., the company that emerged from the failed pretzel enterprise, for $2,000, according to bankruptcy records.
Sayer said his assets were liquidated to produce about $2,500. About $2,000 went to pay claims, he said.
The bankruptcy was closed in January 2005.
But Sayer said he?s done more. He ended up paying a total of about $9,000 to Utah and the IRS and satisfied the tax obligation outside of the bankruptcy. Including the tax claims, Sayer has paid out between $20,000 and $30,000 beyond what was paid through the bankruptcy court. Much of it was to friends and family ?to let them know I haven?t forgotten the debt,? he said. ?To me it?s a priority and I will work to make that right in the future.?
He has yet to repay the credit card companies. ?That would be my ultimate goal,? he said.
He said he wants to pay back everything, but ?when and how it will ever happen, I can?t predict.?
AFTER BANKRUPTCY: REBUILDING
In early 2004, Sayer said his first wife asked him to leave the home where they were staying in Salt Lake City and, sobbing, he left the house and his children and spent much of the night driving around. He had $50.
?I spent that $50 on a hotel room, and I started the next day and I rebuilt from scratch,? he said.
He began by pitching himself as a chief financial officer for hire. He had left Pentalon, but Tippets, who said he had respect for the way Sayer handled his bankruptcy, became his first client. ?I would love to have him associated with my business again,? Tippets said.
Yet trying to get work as a financial officer in the midst of a bankruptcy wasn?t easy. Who would hire him?
?Some didn?t,? Sayer said.
But for nearly four years, working from a basement apartment he rented from a friend, Sayer built his CFO-for-hire business.
STRENGTHENING A HOSPITAL
Then, James Adamson called.
Adamson, who is an investor and company leader in about 100 companies in health care and foods, knew Sayer from his Cornerstone days.
Adamson was CEO at Mountain View Hospital in Idaho Falls, a small, 20-bed hospital ?that was struggling mightily? in 2004, Adamson said.
He needed someone with Idaho roots, good communication skills and a sharp mind for numbers to help shore up the hospital. What started as a consultant job grew to be the company presidency and CFO.
The hospital, which was doing $25 million in revenues in 2004, is up to $140 million, Adamson said. It grew from a single location to 17 locations that include Rexburg and Pocatello. Mountain View expanded services, including speech therapy and imaging, in eastern Idaho.
?I give him a ton of credit,? Adamson said. ?He worked like hell.?
Sayer left in 2010 to work his CFO-for-hire business in Idaho. And in 2011, he got a call from Otter?s office that he was on a short list of candidates for the job as Idaho Department of Commerce director.
Otter was impressed by his body of work, including beefing up Mountain View Hospital, said Mark Warbis, Otter?s communications director.
?WE KNEW ABOUT IT?
When Sayer met with the governor?s staff, he told them, ?you have to be aware ... I have a skeleton in my closet,? Sayer recalled telling them.
?We knew about it from the very beginning,? Warbis said. ?He had experienced this setback and ... not only gets back to even but gets well ahead,? Warbis said.
Otter chose not to air Sayer?s bankruptcy.
The director is not an elected position and is responsible to the governor, Warbis said.
?He understood and he appreciated not only Jeff?s situation but the fact that he had been so ... transparent with us.?
At the confirmation hearing in the Senate Commerce and Human Resources committee, several senators had already been apprised by Sayer of his bankruptcy and saw no reason to bring it up.
?Who better to lead our Department of Commerce than someone who has been out there in the work world, who?s bumped his nose and picked himself up and moved forward,? said Sen. Dean Cameron, co-chairman of the Legislature?s budget committee and a member of the Senate commerce committee.
Sayer?s bankruptcy impacted his life, say those who know him. Tippets thinks it left him a little more risk averse.
What Idaho got with Sayer was a man who knows what it is like to be super successful and someone who has experienced business failure, Adamson said. ?He is going to understand the idea of risk.?
Looking back on his bankruptcy, Sayer said he learned ?things can go wrong. You need to be careful.?
He also says, ?I found out I could start with nothing and become somebody.?
Those years as a CFO-for-hire and at Mountain View taught him he had the capacity of stepping into the limelight and being in a leadership role, he said.
?I found I could figure it out,? he said.
Bill Roberts: 377-6408, Twitter: @IDS_BillRoberts
Source: http://www.idahostatesman.com/2012/08/26/2244835/sayers-bankruptcy.html
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