“HEY, BUTTERBALL!”
Bernard Sherman slouched low in his desk in the classroom at Forest Hill Collegiate, his black-framed glasses riding low on his nose. The teacher at the blackboard wanted his attention. The unflattering nickname had stuck; teachers and students alike used it. Doughy, round of face and body, with few friends and always tired, that was Sherman, a sixteen-year-old who seemed out of place in the boisterous class. “Sluggish” was another label applied to him by teachers. Sherman answered as briefly as possible and went back to looking down at his desk.
The high school was located in the affluent Toronto neighbourhood of Forest Hill, north of Toronto’s downtown core. Forest Hill took its name from the summer home in the mid-1800s of a wealthy businessman, before urban sprawl took over, and the area surrounding the school was heavily treed, with winding streets that seemed in some parts to have their own mind and purpose. The houses were big by the standards of the day, with neatly kept gardens and lawns. In 1958, Bernard Sherman was one of about five hundred students in the relatively new, twenty-four-classroom school, built just after the Second World War and boasting a “new electrical sound system” and internal telephones so that teachers could speak to the office from the classrooms. The majority of the students were Jewish, sons and daughters of upwardly mobile parents, reflecting an influx of immigrants to Canada’s largest city and this particular part of Toronto. The school’s motto translated from Latin was “Not for ourselves alone,” and though there is no evidence that Bernard took notice of it during his five years at Forest Hill, many of the remarks Sherman would make about his philanthropy in the future would reflect that thought.
In those days, Bernard Charles Sherman was only just starting to be called Barry. His mother liked the name but urged him in certain circumstances to use Bernard, because it sounded more distinguished and would serve him better as an adult. In later years, Honey would call him Chuck. Barry was born in Toronto on February 25, 1942, the son of Herbert and Sara Sherman. Sara was a Winter. Her younger brother, Lou, would, for a short time, figure prominently in Barry’s life, and Lou’s offspring would haunt him in and out of courts for the rest of his days. Herbert and Sara were themselves born in Canada, just after the turn of the century, when their own parents had separately fled anti-Semitism in Russia and Poland.
In a reflective and never-finished memoir called “A Legacy of Thoughts,” penned by Sherman while on a vacation with his own family years later in Africa, he recalled how his “first ten years were unremarkable.” They had a good life but not an exciting life, he and his older sister, Sandra—who Sherman called Sandi—in their modest home in Forest Hill. Father Herbert was the president of the American Trimming Company, a small firm that made zippers. One Saturday morning, when Sherman was ten, his father took him to work, an unusual experience for the lad. Sherman asked his father what he could do. His father sat him at a table with a pile of zippers and told him they had to be counted into boxes of twenty.
“In order to please him, I worked quickly,” Sherman recalled. So quickly that when his father checked some time later, he was surprised that many more zippers were boxed than could be done by his own paid staff in that amount of time. Herbert Sherman opened a few boxes to check the count, which offended Barry. The counts were all accurate.
A few weeks later, Herbert went to work and did not come home. He had a massive heart attack in his office and died immediately. The Shermans learned that he’d had a congenital heart defect, which he had elected not to tell his family about. In his later musings, Sherman decided that his father had not informed his mother because he did not want to “burden” her with the concern. “Obviously, he should have told her,” Sherman wrote. Herbert had a small ownership interest in the zipper company but not enough to support two children when the interest was sold. Sara returned to work as an occupational therapist to support her family, a job she had given up when her children were born.
The perpetual tiredness Barry felt at school would dog him his entire life, and no firm diagnosis to explain his lethargy was ever given. An early nickname coined by a Grade 5 teacher was Grandpa, followed by Butterball in high school. None of these taunts seemed to bother him. At both levels of school, Barry was often yelled at for letting his mind wander instead of focusing on the lesson on the board or in the books. For his entire life, he was plagued by insomnia. His close friends in later years said it was because his mind never shut off; he would lie in bed for hours, thinking, dreaming, and scheming. When sleep finally came, it was deep, and as a child he often had a hard time waking for school.
One day, his homeroom teacher took his side and suggested to another teacher that perhaps they should go a bit easier on the boy. Sherman described the incident in his unfinished memoir. “I do not recall feeling any great sense of loss upon my father’s death. However, some weeks later, I was at school in a class being taught by a specialty teacher, and the teacher began to scold me for daydreaming and being inattentive. Coincidentally, at that moment, my homeroom teacher entered the room, and on hearing what was happening, said aloud to the specialty teacher that I had suffered ‘a recent family tragedy’ and should be excused for inattentiveness.” Sherman was surprised that his teacher even knew his father had died, but he did wonder if there was a correlation between losing his father and how he behaved in class. And a germ of a thought grew. “Although I do not know to what extent, if any, I was affected by my father’s death, a psychologist would likely suggest that the drive to achieve which I later exhibited was caused, at least in part, by a resulting insecurity.”
At Forest Hill Collegiate, Barry Sherman did not take part in athletics of any sort. He was a middling student at best until his senior years. There were no girlfriends. He had a regular gig babysitting a next door neighbour’s child in the afternoon and evenings, and that was how he spent his time, watching Western movies on television whenever he got the chance. By his senior years, two things happened. First, Sherman began to manifest a belief that would stay with him his whole life: that he was right about everything. Second, he met Joel Ulster.
It was a contest in the Toronto Daily Star in the late 1950s that drew Sherman and Ulster together. The newspaper ran a series of brainteasers every few days and invited readers to figure them out and mail their answers to the paper. Memories dimmed over the years, and it’s not clear who spotted the contest first in the pages of the Star, but Ulster recalls that Sherman, once aware of it, was convinced that the two would win. They got busy, clipping out the puzzles, answering the questions, and sending their answers off by post to the old Toronto Star Building on King Street, east of Toronto’s financial district. They made it to the tiebreaker and lost, though Sherman was convinced that they were in fact the winners. This was the same student who, on more than a few occasions in Grade 13, challenged a teacher about a statement in a textbook, and was right. Newspaper contest over, they became fast friends.
Ulster was no dummy; he had a better than average memory and was adept with language. “But Barry was smart. Really smart. Nobody else saw it at that time, but I did,” Ulster recalls. “He was the smartest person I ever met in my life. He could go through layers and layers of information and stay focused on it. He had a different kind of intelligence.”
In his final year of high school, Sherman discovered his aptitude for math and science. He entered a Canada-wide physics contest in addition to his class studies and placed first. A photographic memory was part of it. Norman Paul, a Toronto entrepreneur and pharmacist who knew Sherman well in later years, tells a story of presenting the Apotex founder with a lengthy legal document when he was seeking his advice. “Barry picked it up, quickly scanned each page, close to his eyes, like he was a scanner, and after said, ‘Norm, it’s fine, but there is a spelling mistake on page forty-two.’ And he was right.”
Sherman and Ulster’s friendship was built on some fundamental beliefs. One of them was that there was no God, not the most popular belief in a community with religion so stoutly at its centre. Over the years, if someone said “thank God” in his presence, Sherman would rail against the notion, telling anyone who would listen, “There is no God!” He opened his memoir by announcing to the reader, “From my earliest years I have been an atheist. I find it incomprehensible that countless persons, including some of apparent intelligence, believe not only in [the] existence of a Supreme Being, but in very specific and seemingly preposterous mythologies.”
Joel Ulster, and later friends and business partners like Fred Steiner, would just shake their heads at the comments that came out of Sherman’s mouth. Sherman used to tell people he had no emotions, but Ulster saw through that. The two would have long talks while studying, something Sherman undertook in earnest in his last year of school. Ulster, who was not studious, hit the books just to be close to his good friend. Ulster had girlfriends in those days and credits himself with getting his friend interested in girls; Sherman started going on the occasional date. And though neither Sherman nor Ulster was sporty, Sherman particularly not, the two young men played a weekly game of tennis.
Sherman became a regular fixture at the Ulster family home. It was calmer and less chaotic there than at his own house, where his mother had taken in boarders, one upstairs and one downstairs, to support the family. Joel’s father, Ben, was an entrepreneur who owned several movie theatres in Toronto, so-called “grindhouses” that showed back-to-back movies all day, including some racy films. Ben Ulster took an instant liking to Barry. “He will win the Nobel Peace Prize one day, and I am going to fly all of us over there to see him accept it,” Ulster’s father would say. When Joel balked at going with his family on a holiday ski trip to the Catskills in New York State, his parents paid for Barry to come and keep Joel company.
There was a deep loyalty between the two of them, and Sherman and Ulster made it clear that each would always stand by the other, no matter what. Though Ulster was the more athletic of the two, to the extent that either was athletic, he had a failing mark in gym class in his final year, which would have stopped him from graduating. Sherman found the grade book when no one was around and gave Ulster a passing grade. At the end of Grade 13, while Joel was travelling in Europe during the summer break, he received a telegram with his school marks from his father. He worried for hours before opening it. Both had done well, but Joel’s father began his message with the news of the Sherman boy’s results. “ ‘Barry leads Ontario with 14 firsts.’ That was my father writing to me,” says Ulster. “I loved that!”
In the 1950s in Ontario, Canada’s biggest province, students wrote a series of exam papers at the end of the year and were graded against the standard of “firsts.” A first was a mark of over 75 percent, considered an A grade, at a time when that sort of mark meant much more than it does today. A headline in the Toronto Daily Star from August 23, 1960, read, “Forest Hill Boy Gets 14 Firsts,” and the story described how Bernard Sherman “topped” all Grade 13 students who wrote the tests. Two other boys from Forest Hill Collegiate received twelve firsts. Ulster got eight. He was happy with that and delighted for his friend, who, if plans hatched over long study sessions in high school came to fruition, would be his future business partner.
Sherman was particularly interested in flexing his entrepreneurial muscles after an experience working for the provincial government during his Grade 12 summer “processing useless information in an obscure office” in the basement of the Ontario legislature. But what sort of business would be the right fit?
The answer, or at least the start of the answer, came from Uncle Lou. Lou Winter, the younger brother of Sherman’s mother, was an energetic though mercurial man who had graduated from university with a degree in biochemistry. Today, pharmaceutical companies and medical laboratories are commonplace; in 1960, they were not. Lou Winter ran two companies. One was Winter Laboratories, a medical testing lab that mainly performed pregnancy tests on urine samples dropped off by women at pharmacies. This was years before the arrival of home pregnancy tests. The other business, a new venture when Sherman graduated high school, was Empire Laboratories, a distributor of generic prescription drugs purchased from American manufacturers. Generics are copies of brand name pharmaceuticals, sold at a fraction of the cost.
Sherman went to work for Uncle Lou for the summer. Sherman was eighteen; Lou Winter was thirty-six. Despite his temper—Winter was prone to rages and would get red in the face when an employee did something he did not like—they got along well, and Winter gave his nephew Barry a hybrid job, picking up urine samples from pharmacies for testing by the lab and delivering Empire’s packaged generic drugs to many of those same pharmacies.
Lou and his wife, Beverley, were starting a family. By 1960, the year Sherman started working summers at Empire, they had two-year-old Tim, who had been adopted, and Jeffrey, a newborn. Two more baby boys, Kerry and Dana, would be born in the next two years. Barry Sherman was just out of his teenage years when his Winter cousins were toddlers. It was a busy household, and Lou worked long hours at his two businesses. There were obvious signs that the Winters were doing well, including a stately stone house on The Kingsway, one of Toronto’s wealthiest neighbourhoods, a Rolls Royce, and a small yacht.
Internationally, the concept of the generic drug was taking hold, and it was clear to anyone who followed the industry that there was money to be made. The manufacturers of the original drug—called Big Pharma now, a term not yet coined in 1960—did the lengthy and expensive clinical testing and product development. The generic firms copied the drug, but there were legal issues that had to be resolved. A company could not just steal another company’s intellectual property. Some compensation had to be provided. Morris Goodman, a Canadian pharmacist and one of the fathers of Canada’s generic industry, notes that brand pharmaceutical companies called him a pirate. He never considered himself a pirate. In fact, the feeling he had from governments was often the opposite. “I was acting legally in conjunction with the Canadian law,” he says. Canadian governments told him, “ ‘Go after it, because we want lower prices. We want people to be able to afford more drugs.’ ” Years later, Goodman would have the distinction of being the “only person to ever fire Barry Sherman.”
Working in favour of people like Morris Goodman, Lou Winter, and, eventually, Barry Sherman was that, in a system where governments and private companies paid for a big proportion of the cost of drugs people were prescribed, lower cost was a good thing. The question—and it was a question governments would wrestle with and make decisions about that would both propel Sherman forward and infuriate him—was how to achieve that without destroying the innovation efforts of the brand name companies.
Barry Sherman’s father had died when Barry was just ten years old. Lou Winter was not a surrogate father, but he was someone Sherman looked up to. As time passed, Winter gave his protégé more and more responsibilities, though mindful that Sherman was still a student. Sherman and Ulster both had enrolled at the University of Toronto. In his “Legacy” memoir, Sherman recalled, “I specifically chose Engineering Physics [now called engineering science] because it was reputed to be the most difficult of programs related to mathematics and the physical sciences.” He ranked fourth in the program in first year, third in second year, second in third year. In his final year, he graduated top of the class and was awarded the Wilson Medal, the highest honour in that discipline. “It seems that the tougher the going got, the better I did,” Sherman wrote. In these early years, Sherman told friends that his long-term goal was to work at NASA.
Meanwhile, Ulster enrolled in the honours arts program, spent a year studying law, then accounting, looking for something that would click. The friendship of the two young men continued to strengthen. One of the criteria in the courses they both chose was that they had to pursue a university sport. Neither had any interest in football, hockey, or basketball. Then they discovered that table tennis was an approved sport on the university’s compulsory list. They signed up. “It was perfect for Barry. You know, I never saw him run once. Just not his nature. Ping-Pong was the answer,” Ulster recalls.
There was a belief in the extended Sherman/Winter family, which Barry Sherman articulated on many occasions, that the men in the family had a short lifespan and nothing could alter that. A good diet, exercise, none of it signified in Sherman’s life. Breakfast for Barry was often a handful of Smarties and raisins. The fatalism didn’t apply to the women in the family, and so it was a shock when, in 1962, Lou Winter’s wife, Beverley, was diagnosed with leukemia. Following her first round of treatment, and leaving behind four very young boys, two still in diapers, Beverley and Lou flew to Bermuda for a three-week rest and vacation. What happened in their absence would be a harbinger of what was to come in Sherman’s life. Opportunity. Risk. Reward.
Sherman had been working that summer at Empire, where the company was making its first attempt to manufacture its own pills. Previously, Empire had purchased generic pills wholesale from a US supplier and distributed them. The governments of the day were flexing regulatory muscles, swooping in on generic companies and running tests to see if their products were safe and effective copies of the brand product. Generic firms believed that the brand companies were putting government up to this. Barry Sherman’s job that summer was to help the full-time employees set up the manufacturing line. As Lou and Beverley relaxed in Bermuda, Empire was starting to manufacture a generic form of Aspirin under contract to the now defunct but then very large Towers department store chain. It was a big contract and one that was predicted to make Empire a lot of money. A call came in from the Towers buyer. Sales were larger than expected and the buyer predicted they would rise even higher. A great deal more of the ASA tablets (ASA, or acetylsalicylic acid, is the active ingredient) would be needed. Apparently, the lower-cost version was flying off the shelves. According to his memoir, Sherman took the initiative, contacted the company that supplied the bulk ASA to Empire, and “negotiated the purchase of a substantially increased quantity at a substantially lower price.”
“I also organized around-the-clock production to fill the orders,” Sherman wrote. When it came into the small Toronto factory, the ASA was mixed with fillers and compacted into tablets using a tabletting machine that used pressure to form powder into pills. The relatively slow-moving machine was archaic compared to the machines Sherman would have at his disposal in the future: computer-driven punches that would each turn out five thousand tablets a minute. Still, it got the job done and earned him praise.
“Uncle Lou was very pleased with what I had done,” Sherman wrote. “Although I did not know it at the time, these summers at Empire Laboratories would later prove to be of critical importance to my future career.”
Lou and Beverley came back from Bermuda refreshed. Beverley’s leukemia was in remission. Lou returned to his business and Beverley, feeling better, was busy with the children. Photos taken over the next few years captured numerous images of Tim, Jeff, Kerry, and Dana: on a dock in cottage country, all wearing short pants and matching velour jackets; on a beach, again with all of them wearing matching summer shorts and collared short-sleeved shirts; seated together in front of the large oak door of the Winter home in Toronto. A photo of Lou, wearing glasses reminiscent of the ones Barry Sherman wore and laughing with Beverley, is an indication that his infamous temper had settled as he aged. In the family albums, there are lots of photos of Lou and Beverley hugging and kissing, smiling. In one particularly nice picture, the boys, wearing the velour outfits again, are snuggled close to their mother at a beach.
Having graduated from the University of Toronto as an engineer in 1964, Sherman tried something different that summer. Instead of working at Empire, he took a job at the Spar Aerospace division of de Havilland Aircraft in Toronto. His knowledge and abilities with math landed him a plum summer assignment working on vibration issues encountered by satellites being developed in Canada. It was an exciting time in the world of space and aeronautics, with the moon landing plans under development in the United States, and Canada working in tandem with the Americans to develop satellites to study the atmosphere and create an orbiting communications network. At the end of that summer, Sherman travelled to Boston to begin studies in astronautics and aeronautics at the Massachusetts Institute of Technology. For Sherman, it was both physically and mentally a great distance from pharmaceuticals and Toronto.
When he returned to Boston for his second year, he did so with the knowledge that his Aunt Beverley’s leukemia had returned. She was being treated at Toronto’s St. Joseph’s Hospital, but the situation was dire.
Just a few weeks into his sophomore year, in the middle of the night, when Sherman was asleep in his room at MIT, he heard his telephone ring. He feared it was news from Toronto that his aunt had died.
It was his sister. “It’s Uncle Lou,” Sandi said.
Lou Winter, aged forty-one, had been working that afternoon at the Empire offices in Toronto’s west end when he suddenly fell over. An aneurysm in his brain had burst. His employees called an ambulance and he was rushed to St. Joseph’s Hospital, a fifteen-minute drive further west, but Lou Winter died soon after arrival. Sherman flew home to attend his uncle’s funeral. He did not believe in God, but he understood the meaning to family of a funeral and knew it was important that he be there.
After the funeral, he visited his now terminally ill Aunt Beverley in hospital on the evening of November 9, 1965. He recalled in his memoir how the lights in the hospital went out. Not being a superstitious man, Sherman was not worried but rather curious. Emergency systems clicked on. He began to ask questions, intrigued by what had happened. It turned out that an improperly set relay circuit on a transmission line from the Adam Beck II hydroelectric power station on the Canadian side of Niagara Falls had tripped, sending a power surge into the electrical grid that caused blackouts on the eastern seaboard of the United States—New York State, New Jersey, Massachusetts, Connecticut, New Hampshire, Vermont, and Rhode Island—and a big swath of Ontario. Power remained out for thirteen hours. Newspaper accounts describe traffic and public transit chaos, but there are also stories of people on the jammed streets of Toronto giving up on getting home and popping into bars for a drink by candlelight. A myth, eventually debunked, was that the Great Blackout of 1965 gave rise to a baby boom. Sherman returned to Boston and his classes, only to fly back three weeks later to attend Aunt Beverley’s funeral.
His little cousins were seven, five, four, and three years old when their parents died. In later years, whenever the boys’ uncertain future—some had troubles with substance abuse, some the law, and all had a hard time finding their place in the world—was discussed, the four boys would always be referred to as the “orphaned cousins” or the “Winter orphans.” The immediate question after the deaths of their parents was who would raise the boys. According to a 2008 Toronto Life article, Beverley’s brother (now deceased) was under the impression that she did not want any of her own family involved. There also appears to have been no discussion about whether Barry or Sandi, who were both in their early to mid-twenties, could look after the children, though some people interviewed for this book have suggested they should have. In testimony as part of the lawsuit the cousins eventually brought against him, seeking a $1-billion share in his wealth, Barry Sherman said there was “nothing” he could have done at the time. “I couldn’t adopt them myself. I was a kid myself.” In reality, it would have been highly impractical. Sherman was twenty-three years old, single, and living in Boston, working simultaneously on a master’s degree and a doctorate. Sandi was also just starting out.
A local couple, Dr. Moishe “Martin” Barkin and his wife, Carol, who had their own children, took in the four boys and eventually adopted the children, using money from the estate to raise them. But while Sherman had no interest in being thrust into parenthood, he did have an interest in the Empire companies Lou Winter had created and where he had worked for two summers. After Beverley’s funeral, Sherman delayed his return to Boston. He had a sense that the business was in trouble, and he wondered, as he recalled later, if there was something he could do to help.
Lou Winter’s will had appointed the Royal Trust Company as executors and trustees of the estate, with instructions to oversee the affairs both of Empire and the four children, should both Winter and his wife die. Three days after Beverley died, Sherman wrote a letter to Royal Trust. He had a plan. Opportunity was on the table, risk was certain, the reward could be substantial. He proposed that he would purchase all of his deceased uncle’s assets, including Empire and related companies Winter had created. He was “anxious to protect the value of the said assets for the benefit of the children of Louis and Beverley Winter,” Sherman wrote. He suggested that he would take over immediately as general manager of Empire, putting his studies on hold, and that he would be given the first opportunity to purchase all the assets in January, just two months later. Sherman gave Royal Trust a twenty-four-hour time limit to consider his offer. It was rejected.
Sherman went back to his studies in Boston, leaving behind for the time being any thought of a career in pharmaceuticals. Years later, when Sherman was a veteran of court actions, testifying in patent cases about one drug or another, his lawyer Harry Radomski would typically begin by leading him through his curriculum vitae, with a sharp focus on Sherman’s academics. Sherman would describe how he was awarded both a master of science degree in aeronautics and a doctor of philosophy in systems engineering after just a little more than two years at MIT. His grade point average, Sherman would tell the court, was a “perfect 5.0.” The cumbersome title of Sherman’s doctoral thesis, “Precision Gravity Gradient Satellite Altitude Control,” for which he eventually received a patent from the US government, always raised quizzical but respectful eyebrows. Another paper he penned for an earlier course was titled “Tethering a Satellite to the Moon.” After all of this was said on the witness stand, Sherman would pause and say to the judge, “I guess you could say I am a rocket scientist.” That would get a predictable chuckle from the judge and anyone sitting in the gallery, a welcome relief from the tedious discussion of whether a particular active pharmaceutical formulation was done in a manner that would circumvent a Big Pharma patent.
It was surprising to some who knew Sherman in the 1960s that he dropped his dream of working for NASA and returned to Toronto to make another bid for Uncle Lou Winter’s company.
“I had decided that I did not want to seek employment as an astronautical engineer,” Sherman recalled in his memoir. “I was interested in both science and business and I also wanted to return to Toronto to live.” A deciding factor for him was that he wanted to be his own boss. One summer, when he was fifteen years old, Sherman had joined the student militia of the Royal Canadian Artillery. The physical challenge of training was bad enough, he recalled in his memoir, but worse were the drill sergeants. “I was and always have been reluctant to submit to any authority.” The one bright light for Sherman during his military summer was the opportunity, as he described it, to engage “persistently in aggressive and disrespectful debate” with the military chaplain.
With the NASA plan behind him, Sherman was back in Canada in 1967, checking in on his mother and sister. He called Joel Ulster, who by this time had given up on law and was working towards becoming a chartered accountant. Ulster was married to a nurse, and they had three very young children, with a fourth on the way. “Uncle Barry,” as his children called Sherman, was a hit when he visited their house just north of Toronto, romping around on all fours pretending to be a jungle animal and taking an interest in them that would last his whole life. Sherman wanted to get married and have children himself, but not yet. As far back as high school, Joel and Barry had agreed that if they could find a business that was a good fit, they would see if their partnership, first forged during a newspaper puzzle contest, could work in the real world. When they became friends at Forest Hill Collegiate, they would fantasize about the companies they would run and conjure up names using the first letters of their first names, like JOBA Enterprises, or BaJo Ltd. Now, Sherman had an idea, and he wanted Ulster involved. Both knew that to pull it off, they would need financial help from their parents.
Sherman drove over to Empire Laboratories, the group of companies he had tried to purchase two years before. A few of the executives he had known were still there. The new boss, put in place by Royal Trust on behalf of the Winter estate, was a university chemistry professor named George Wright. “He may have been a good chemist, but absolutely incompetent when it came to business issues,” Sherman later recalled in a deposition for the cousins’ lawsuit against him and Joel Ulster. Sherman said he came to that conclusion by chatting with people at the company, asking questions about revenues, expenses, and, most importantly, their product line. Whereas Empire had been on the cutting edge of the fledgling generic market a few years before, it had not introduced a new product since that time. He also found that they were supplying product to the other new generic company in Toronto, Novopharm, and that Novopharm was then selling the product in stores and undercutting the price Empire was charging. And it turned out Empire president Wright had a plan that to Sherman’s young but sharp business mind made no sense.
“George Wright told me that his plan to save the company was to make oral contraceptives for sale to India,” Sherman recalled in his deposition. “Completely off the wall idea that made no sense whatsoever. So it was apparent that the company would be closed down and there would be no value at all within a matter of months.” Profits from Empire, what little there were, belonged to the orphan cousins. Though his conduct was continually called into question in the cousins’ later court action, Sherman never wavered in his response. He believed that it was a good business opportunity for him, and if he purchased it from the estate, that would give the four Winter brothers money for their future.
Sherman called Royal Trust, which was now two years into its job of managing the Winter assets and overseeing the financial affairs of the orphaned cousins, who were being raised by the Barkin family. This time, Sherman made an offer that included what a senior judge fifty years later would refer to as a “sweetener.” Sherman stipulated that the four cousins would one day be able to work at Empire and each would have the right to purchase 5 percent of the company shares, provided certain conditions were met. Royal Trust agreed to sell. Sherman and Ulster’s offer of $450,000 was $100,000 higher than the only other offer. They would assume responsibility for $200,000 in company debt, and the actual payout to Royal Trust would be $250,000—paid for with a $100,000 loan from Sherman’s mother and a $150,000 loan from Ulster’s father. When the purchase deal was done and Sherman and Ulster had control of Lou Winter’s company, the two men, both in their mid-twenties, looked around the four walls of their acquisition and took a deep breath.
“We’re going to be millionaires,” Sherman said, his eyes widening behind his glasses. The next day, combing through the company documents and examining the product line, he sat back in his chair and looked at Ulster.
“We’re going to be bankrupt.”