Law on Rice

I finally wrapped up the first draft of the Espinosa paper I’m working on and emailed it to my professor. You know what that means, don’t you? It means I finally have some time to dig around in the dockets for a bit!

There’s an unpublished bankruptcy opinion involving a contract dispute in Judge Meyers’ courtroom in the Southern District of California. 05-15409 UC Lofts on 4th, LLC. But that’s it for filed opinions, published or otherwise.

Maybe that’s because the courts are too busy dealing with all the new bankruptcy filings! In the District of Arizona, I found five new chapter 11s. Among them was Customerfunding.com, Inc., a company that does consumer and dealer leasing (the petition is here). Other filers include Stars & Stripes Properties, LLC; Ultimate Urgent Care Centers, LLC, and Sunrise Hospitality, LLC.

In the Central District of California, there were four chapter 11 bankruptcy filings. Among those was Nelson Engineering, Inc. and the California Soccer Association-South Inc. In the Northern District, there were also four cases. Among them was Giovanni Development Co., LLC.

There was only one chapter 11 in Nevada, and it looked like an individual case (I usually don’t list these, even though they’re public record).

There were no chapter 11s in Washington’s Western District.

The 51 and Colter

It’s starting to get a little bit gloomy here in Seattle. Luckily, I hear that it’s going to be an “El Nino” winter, so while it might be a little bit wetter, it will also be a little bit warmer too.

Not as warm as my hometown, however: Phoenix, Arizona.

Google tells me Phoenix will be in the low 90s or high 80s all week–and sunny. Always sunny.

I also like to peek in on the traffic cameras on my little iPhone application to remind myself that I won’t have to deal with the gloom for long!

The picture you’re seeing, for those of you not from the area, is on the 51 facing north from Colter–not too far from the Arizona Biltmore.

For those of you from here in the Northwest, the blue stuff you’re seeing toward the top are blue skies. You remember those, don’t you?

To see it for yourself on Google Maps, click here.

There’s an interesting news report out today about a change in business bankruptcy trends during this downturn: “Approximately half the lenders never saw it coming,” PayNet President Bill Phelan said. “They were blindsided.”

The study from Paynet will probably be available here.

Just a quick post to let you know I am still here. I’ve been working feverishly to finish a first draft in my independent study project on Espinosa v. United Student Aid Funds. After writing a seven page outline, I typed out twelve pages, 3,243 words, 19,712 characters (including spaces), sixty-four paragraphs, and 264 lines. Oh, and there are already forty six footnotes.

Not bad, but I’ve done better. For instance, it took me 578 minutes to get this far. Surely I could have been a lot more productive.

I’d say I’m about 55% done, so I’ll have a lot of work to do tomorrow to meet my own deadline.

My professor says that America is facing the biggest problem it’s ever faced. Bigger than World
War II.

Our banking system is still broken. The only thing the regulators are really doing is trying to buy time. But nobody has really proposed any major architectural fixes, and the banks have only gotten bigger.

Maybe he’s right.

Some in the class want to let the system crumble and let the market sort it out. The professor worries that this may cause instability that may overwhelm those in power, and so nobody is really willing to let it happen.

As absurd as this sounds, I actually think I have a solution that would work. I call it the Los Angeles plan.

Yesterday I was working on a client’s bankruptcy case. Her real problem wasn’t so much her unsecured debt as it was her secured debt, namely a car and a house payment.

Liquidation in these contexts isn’t really helpful, and chapter 13 reorganization doesn’t help because of the restrictions on home and purchase money restructuring.

If Congress really wants to help these people that are living on razor thin margins (and I’m surely not accusing Congress of any such thing), they should either add more cramdown power in chapter 13, add a reorganization component to chapter 7, or create a whole new chapter for these folks. Maybe it could be done for people who are a certain level below median income.

But likely it won’t be done at all.

I’m reading about some state law alternatives to the federal bankruptcy regime. One of those seems attractive to me, a composition.

It’s basically a contractual solution available to debtors under some state laws. The real benefit is that it can be done very quietly. It seems like that feature makes it very valuable to a lot of small businesses (and some bigger ones too).

But my case book says that they are popular in only some parts of the country. Is it because a lot of lawyers learn just by doing what other members of the local bar are doing?

I don’t have enough time to really read this case, but the Findlaw summary was kind of suprising:

In a case arising from bankruptcy proceedings involving fraudulent transfers, given the deficiencies of the present briefing, the appeal is dismissed and defendant’s counsel ordered to show cause by written response as to why the court should not order payment by him personally of attorney’s fees, double costs or both for a brief that renders the appeal frivolous.

Apparently the attorneys failed to comply with Federal Rule of Appellate Procedure 28(a)(7). Specifically, the court said:

Despite its length, the Browns’ opening brief leaves unclear what claims are being advanced and what facts bear on what claims. Although many of its arguments turn on legal propositions, it cites only three cases not connected to this appeal, and does not seriously engage with any of the precedents that might bear on any issue in this appeal. Despite numerous factual assertions, the brief rarely provides citations to the record. The occasional quotations from portions of the trial transcript do not provide support for the bulk of the brief’s factual assertions.

The opinion is here.

Big Deal

Today I read that Bruce Wasserstein died. It made me sad, and it prompted me to post about something that’s been bothering me all week. You see, it’s Social Justice Week again at the law school. And that always causes me all sorts of cognitive dissonance (or whatever you want to call it) because I am of two minds.

On the one cranial lobe, wouldn’t it be something to be a pure social justice lawyer. I could be like a renegade. A modern day Che Guevara with a license to practice law. I would answer to nobody but the law and the Cause. I could be a dragon slayer.

But on the other lobe, guys like Wasserstein broke the rules too. People might be tempted to dismiss him as greed in a suit. I don’t know that much about him, but I know he laid waste to more than a few dragons. He was a renegade of his own kind and of his own era.

For whatever reason, I wasted a lot of my youth watching Wall Street over and over and over. I know every word. By heart. Practically from the start. Maybe that colors my point of view.

Regardless, even though I never met Mr. Wasserstein, it’s because of people like him that I went to law school. You might not have noticed that he went to Harvard Law School before he became an icon of the Eighties. When I first started my career, it was a renegade period in our history. I was a consultant and we were going reengineer Corporate America. The old rules didn’t matter any more. Then came the dot com crash and little by little, my career turned into a far more technical one than I intended.

I wanted to be at the center of the action again, so I went to law school. It seems to me that lawyers are almost always at the center.

By the way, I’m sure Mr. Wasserstein would have never expected to see his name on some law student’s post from the Upper Left of the country listed along with something called Social Justice Week and Che Guevara. Still, I think he might have liked it. If I were him, and I am not, I would.

This was taken on 16th and Union in Seattle

I noticed the blog was looking a little too black and white, so I thought I’d share this picture with you.

I took it on my way into classes this morning. Notice that it was sunny. The light was peaking around one of those old Capital Hill houses to light up this particular tree.

It’s not the best picture in the world, I’ll be the first to admit, but if you had been there you would have told me to take the picture.

Everything else was in shadows, except this one tree that just happened to be changing colors.

It was sunny today for a while, and then it rained all day. Luckily, I stayed dry all day.

Winter is definitely coming. I’m glad this will be my last!