CALPINE’S FALL FROM POWER
Founder Cartwright reflects on failure of growth strategy
Looking back on the tatters of his former empire, deposed Calpine CEO Peter Cartwright said Thursday that he now regrets pursuing a strategy of growth that put the nation’s largest independent power producer under a crushing burden of more than $ 17 billion in debt.
But until Monday, when he was forced to resign from the San Jose company he founded 21 years ago, Cartwright still saw hope.
‘‘ It would be silly for me to deny that I wish we didn’t have so much debt,’’ Cartwright told the Mercury News. ‘‘ But I felt through this period that it was manageable.’’
Cartwright said the end ‘‘ was very much a surprise.’’
On Monday morning, Kenneth Derr, the board chairman and now acting chief executive, told him that the board had met over the weekend, Cartwright said. The board wanted former Chief Financial Officer Bob Kelly and him to resign, but they were going to be given one last opportunity to make a presentation.
After the presentation, Cartwright was called into the room without Kelly. ‘‘ They called me back in and said, ‘ We would like you and Bob to resign,’ ’’ Cartwright recalled.
‘‘ I said, look, I’m not going to resign. And they said, ‘ We’re going to terminate your contract,’ which they could do. It was about five minutes. That was it, no ceremony or real discussion of it. They decided the company needed to go in a new direction, and they needed new management to do it.’’
Cartwright and Kelly, who also was ousted Monday, were widely viewed as the company’s safeguards against a bankruptcy filing. Analysts and Wall Street investors saw their removal as a sign that the board of directors intended to do just that, a perception that sent the stock plummeting to 38 cents a share by the close of the market Thursday. At the company’s peak in 2001, Calpine shares traded at $ 56.99.
Cartwright said Wall Street’s perception will play a large role in whether the company can survive — and that does not bode well for