Varner said that during their conversation the day before, Bill had given him three conditions that would entice him to drop his request for an emergency board meeting. Bill wanted to reestablish the executive board committee that included himself, Charles, and David; he wanted to run a large program to invest in new deals; and he wanted roughly $25 million out of the company.
Before he left town for vacation, Don Cordes got a call from Bill’s lawyer. The attorney said that Bill was calling for an emergency meeting of the board after all, but he didn’t plan to ask for anything drastic. Bill would use the meeting to request that two new directors be elected to the board, a move that would not change the balance of power. Neither Cordes nor Charles Koch was worried about it. Cordes decided to leave for Thanksgiving break.
The day after Thanksgiving, Charles got a call from David Koch. David had gone into the office that day and found a notice delivered to him about Bill’s emergency board meeting. The meeting was not nearly as innocuous as had been described to Don Cordes. The purpose wasn’t to elect two new directors—it was to fire the entire board and replace it with a new one. And the notice said something even more alarming: it was being sent not just on behalf of Bill Koch but also on behalf of the eldest brother, Frederick Koch, along with J. Howard Marshall III, who had inherited shares in the company from his father.
David and Charles immediately knew what was happening. These three shareholders, when acting together, would gain a slim majority of voting power on the board of directors if Bill had his way. If they replaced the entire board, they would win control of the company. The obvious goal would be to fire Charles Koch as CEO and find a replacement. Bill Koch would be a natural choice. It was clear that Bill had been working hard behind the scenes to arrange this surprise coup. But Bill made a critical mistake: he had given Charles time to respond.
* * *
Charles Koch boarded a private jet Thanksgiving weekend and flew to Houston. There he picked up his father’s old business partner, J. Howard Marshall II, and Marshall’s wife, Bettye. On Sunday night, they all boarded another private jet that took them to California.
Howard Marshall had been unaware of what his son was planning. He only learned of the plot on Saturday, when Charles had called him. Marshall hung up afterward and called his son. When he called Charles back, the elder Marshall confirmed Charles’s worst suspicions: “Howard [the younger] is going to vote against me,” Marshall said.
Charles asked Marshall what they should do. “He said, ‘Well, there’s one thing that Howard III understands, and that’s money. And I’ll go buy my stock back,’ ” Charles Koch recalled.
Howard III lived in Los Angeles. His father wanted to go there and meet with him personally to close a deal to buy back his son’s stock. Charles agreed to fly to Houston and take the seventy-five-year-old Marshall to California himself.
Charles Koch and the Marshalls arrived in California on Sunday night. The next morning, Howard Marshall met with his son and agreed to buy back his stock for $8 million. The deal would move the voting shares back to the elder Marshall and back into the column supporting Charles Koch. It would effectively end Bill Koch’s coup. Bill caught wind of the deal and offered $16 million for the shares, according to Howard Marshall II, but the son refused. He didn’t want to break the deal he’d made with his father.
The next day, Charles and Howard Marshall went to the son’s house to sign the paperwork on the stock sale. As they talked with Marshall III, the phone rang. It was one of Bill Koch’s lawyers, calling for Charles.
Charles went into another room and took the call. The lawyer, Jim Linn, said that Bill Koch had called off his special meeting. Linn asked Charles Koch not to make a deal with “that foolish Marshall” kid. They should have a meeting instead to solve their differences.
Charles said he could not agree to that. He hung up and went back into the other room to close the deal. Eventually Marshall’s son signed over his shares for $8 million. The coup attempt ended there, and so did Bill Koch’s future with the family company.
* * *
When they were children, Bill Koch hit his twin brother David in