I'm not 100% sure of all the facts, but here is what I can remember.
Yes and no. Les started out with Custom Bali's with Bali-Song USA in the mid 70's. Not 100% sure when BS USA turned into Pacific Cutlery, (I remember both companies being in existence at the same time with BS-USA selling the custom Bali's, and PC selling production units.) But somehow BS-USA faded and PC became the dominate corporate identity. At this time, through some misjudgements in product line up that didn't sell (some blame Mike Stewart PC's General manager who later created Blackjack Knives) and over expansion, as the reasons PC was forced to fold. Since Les still maintained the Balisong USA Trademark, he continued to sell some knives in limited numbers using PC assets. When Les was hired by BM, it was only a regional company with limited distribution. Les brought with him national distribution knowledge and experience in running a major cutlery company. He convinced BM to start making and selling the existing production balisongs he was still producing in limited numbers.
As for the customs, the mid 80's are a blur and I'm not 100% sure. Around 88/89 I was ordering them from BM. In 90 or 91 Les did the NYC show with an excessive high number of custom Bali's. I was able to pick up several with volume discount. He indicated they had to start getting out of the bali market because the legality issues were getting pretty serious. He did say he was not going to discontinue the line, just will be refocusing on making non-bali knives. My last custom was ordered and delivered in 94 the Latchless Scimitar. That was the first custom that came with a blade not ground by Jody Samson. In '96 Roberta started the Custom Blade version of the Custom line. Guess by then the lack of a good blade grinder and the quality of the milling machines started to take it's toll on the Custom line. The first issue was with blades ground by Harold Corby. Then came AJ Hubbard, followed by Pat Crawford, with the last one issued with Allen Elishewitz blades (the model the BM 47 is patterned after). That was the last milled handled, 3/16" custom ground blade bali's that BM issued.