The tipster was reading AmLaw Daily

http://amlawdaily.typepad.com/amlawdaily/2009/03/the-greatest-client-memo-ever-also-manny-ramirez-stinks.html

FIRST!

Not impressed with partner's writing style . . .

Welcome to Obamaland.

not funny even by tax guy standards

Umm,

(1) Mass. can't tax Manny's 2009 income earned in LA; and
(2) It's a little late to change the 2008 tax code.

This firm sucks.

The guy is insane, and Caldwalader isn't scoring any points by putting it up.

I think this is awesome. This is a clever way to point out how absolutely ridiculous the AIG tax is. The people who are dumb enough to support the AIG Tax will not understand the parody and the people who matter will get the point.

7, you're f'ing out.

9, you don't matter

7,

(1) over 1/2 of the bonuses were paid out in London and the U.S. can't tax income earned in London, but they are trying by levying the tax directly on AIG as well as the individual earners to circumvent the fact that they can't tax the Brits. Everyone knows this won't work but they are still trying.

(2) its a little late to use the tax code to abrogate contracts that were signed and bonuses that were guaranteed in 2008. Yes I am aware that the income was realized in 2009 and thus subject to 2009 tax code so it doesn't exactly match up but the man is stretching to make an important point.

PS he isn't really suggesting that they retroactively tax Manny, that's why it is a parody.

9, it might be awesome in some satiric way if it wasn't written with the style of a mentally challenged 12 year old.

TAX MAN RISES, COMEDY FALLS, WTF EXPRESSION REMAINS

EPIC FAIL

(and the AIG tax is - and has been for a few days - dead on arrival)

Guy sounds like a moron.

i think it'd be far funnier to read an average CWT partner's timesheet, something on the order of:

--.8 thinking of ways to increase teh funny
--.3 arbitrarily inserting exclamation points
--.5 obsessively checking # of hits on memo
--.3 searching lateral link
--.1 think of ways to respond to argument that Manny Ramirez is a first-ballot HoF'er who, despite his actions, still put up HoF numbers for BoSox and whose actions didn't threaten the entire existence of the MLB/world and/or result in an emergency bailout of the team
--.3 replace several exclamation points with periods

I like parody as much as the next guy but i fell asleep too many times to comprehend wtf this guy was saying. maybe bc i am a girly girly and sports bore me. get me the cliff's notes verions of this shiit.

Epically Toolish.

Isn't the internet great? Where else can mentally challenged law students (like 13 and 16) anonymously belittle the writing style of one of the more successful broker-dealer lawyers in the city?

Oh, and yeah. This is Steve Lofchie. Great comeback.

18, it is because you are a girl and as we all know girls don't really understand much of anything that isn't written in a cookbook or the label of a shirt. Stop waiting for the Cliff Notes and go bake something useful.

13 - pure win

As for the partner, I applaud the effort, and cringe at the execution. This partner further exemplifies the fallacy that you need to be a good writer to be a successful attorney.

21-The memo is so boring, I don't even KNOW if I understand it cuz I keep falling asleep reading it. Anyhow, I would not bake or even put out for a man that got off on this dweebishy memo.

I think the writing style is intentional to convey the fact that the author doesn't really think this is a brilliant idea. I doubt this guy is regularly sending out letters to counsel and clients with lots of exclamation points.

If he meant to actually convey the thought processes of our elected officials, he should have dumbed it down quite a bit more, however. This memo would have mirrored the output of the House banking committee much more closely if it were handwritten in crayon, and all the 'i's were dotted with little hearts.

That said, I think that the memo presents a suggestion that is humorously analogous to the bonus tax.

This is the first post where an ATL editor said something nice about Cadwalader. The legal world really must be coming to an end.

Also, the way that commentators use Lofchie's status as a CWT partner to belittle his intelligence is ridiculous, considering that if he were still at Davis Polk (where he was until '06), you all would probably be blowing him right now.

The Red Sox received bailout money?

Wait - is the memo a clear parody, or is Cadwalader?

This guy -- like Cadwalder -- sucks, and obviously he was not very good at distinguishing cases back in law school. I realize that there is meant to be a joke (also like Cadwalder) but jokes are meant to be funny. This one sadly is not. Frankly, I find it bizarre that Cadwalder put such a piece of drivel up on their website. It reflects poorly on the Firm, although I'm not really suprised, considering that most of what Cadwalder does reflects poorly on the Firm.

Let me briefly state the difference between taxing AIG retention payments at 90% to recoup lost costs by the taxpayer and the comparison offered by the assclown Cadwalder partner. AIG brought the financial world and the US economy to the brink of disaster. The financial products employees then had the balls to demand "retention" bonuses, based on the fact that only they knew how to untangle the web of deceit and fraud they wove. If a terrorist places a bomb in a building, we dont negotiate with the terrorist and provide amnesty or a payment for the terrorist to defuse the bomb. Nor should we provide "bonus" payments to AIG employees who completely and utterly failed. These retention contracts were entered into under threats (duress) and fraud and therefore, can be properly abrogated. Whether this is done in courts or via the tax system is to me, immaterial.

As for Manny and providing taxpayer money for stadiums. The money for stadiums is provided to encourage economic development. Stadiums provide jobs and needed tax-base revenues. I dont always agree with it, and sometimes states/cities provide too many tax breaks, but the point is, if you build it, they will come. Similarly, Manny is getting paid not just for absolute performance but for bringing fans to the park and selling out games, which, no matter how well he did, he definitely performed on that aspect of the deal, be it in LA or in Boston. Also, written in the contract are many performance-based bonuses, some of which he did not receive because he did not play in a majority of the games. AIG employees, in contrast, failed miserably and should not be getting a bonus for that failure.
In sum, Cadwalder sucks.

--

Memo aside, Lofchie is a complete jack-ass. He doesn't know anything. For the life of me, I don't know why they allowed him to be "co-head" of the department. It should have been me.

Sincerely,

Ray Shirazi

28,

His analogy is apt; your distinction is flawed.

In both the AIG situation and the MLB analogy, there is no performance standard in the compensation contract that the employee has failed to meet. You have an external government analysis positing that the promised compensation is undeserved based on performance standards which are not required by the contract or agreed upon by the parties.

Your theory that the contracts are somehow invalid due to fraud or duress is also probably incorrect. This is simply a dying company that has to guarantee a lot of compensation to retain anybody who thinks they could get a stable job elsewhere.

If AIG or the government believed the contracts were invalid, there are plenty of traditional ways to deal with contracts induced by fraud. Fraud cases are very common and they have never before been resolved by confiscating the disputed funds through specialized tax legislation.

What we have here is a situation where Congress has decided that it doesn't approve of compensation that does not require government approval, and it is using specialized tax legislation to seize pay it has no other mechanism for confiscating.

Neither the TARP nor the AIG bailout gave the government any control over pay. Just as payouts to sports teams are for the purposes of economic development, the payouts to AIG are for economic stabilization.

The rationale that you and the government present for taking the bonuses is that 1) the compensation is undeserved, and 2) that it is inappropriate for a company receiving funds from cash-strapped taxpayers to be making its employees rich.

These arguments are completely applicable to the baseball teams and players as well.

30,

You're forgetting the ultimate "performance standard" in any employment contract: whether your actions drive the company into a clusterfuck so deep that it can no longer exist.

If not for the fact that allowing AIG to fail would pull the trigger on the CDS booby-trap, these leeches on society wouldn't be getting a dime, because AIG would have ceased to be.

28 here:

Unfortunately, I am correct. The AIG bonuses are nothing more than employees using a complex and broke system that they purposefully created to shake down the government for more cash to "retain" them to fix the mess that they've caused. That's corruption and that's fraud, and there is little reason to honor these contracts that were not entered into with the knowing consent of both sides.

31 has it correct. AIG should be in bankruptcy and these employees with alleged "contracts" would be forced to get on-line with the other creditors. Instead, they created a massive problem for a massive company that is, apparently, too big to fail. There is little reason to treat this Company as anything more than bankrupt entity. One thing that is lost in the whole debate is when people talk about the "rule of law" or "honoring the contracts" what they forget is that by honoring the contracts and paying out absurd sums of cash for failure is that we are encouraging precisely the type of fraudulent risk-taking behavior that we want to discourage. We are saying, essentially, is that if you do well, we will pay you, if you fail, you'll get fired, but if you fail so catastrophicly that you threaten the entire nation's health and security -- we'll pay you even more.

That's why people are disgusted with AIG and the rest of the banks. We dont mind rewarding success, but demanding that you still get paid after failure is too much. The fact is, what we should be doing is clawing back the bonuses these Financial Products Group clowns received in the first place -- obviously, they were not based on any type of real achievement or gains.

Damn you anonymous ATL posters are so smart! I should definitely hire one of you as my legal counsel on one of my billion dollar deals.

Sooo... any of you have clients or are you just typing furiously on a keyboard? Are you getting paid millions for your services?

http://eliemystttalspeaks.ytmnd.com/

bravo.

28,

AIG is a pretty sophisticated entity. The argument that it entered agreements without knowing consent is absurd. Similarly, Congress is sophisticated, and if wished to constrain pay for employees of bailed-out companies, it could easily have made such restrictions a condition on the bailout funds. It did not.

Instead, Congress allowed AIG to make promises to induce employees to continue to work, and is now attempting to confiscate the payments after the employees satisfied their obligations under the contract.

The employees are not being paid for failure. They are being paid because they stuck around and worked at AIG for six months, instead of jumping the hell off of that sinking ship. AIG made it clear months ago that it was closing its financial products division. Every job there has an expiration date, and no chance of any performance bonus. The promise of retention bonuses was necessary to keep everyone from running for the door.

You argue that, after these people have worked there for six months in reliance upon AIG's promise to pay them, they should have their compensation confiscated because expecting to be paid agreed-upon sum for performing an agreed-upon task is somehow immoral. I'm sure all the lawyers here who are working on bankruptcy matters would take issue with your suggestion that it's somehow wrong to collect a big paycheck for winding down a struggling company.

You are making precisely the argument the memo sarcastically makes about Ramirez, who collected a massive paycheck and then spent crucial games benched for penalties and trumped-up injuries. Payment of the retention bonuses was not conditioned on the performance of the company, in the same way Ramirez's compensation wasn't conditioned on winning a World Series. The analogy between the argument about baseball and the argument about AIG is right on point.

Lofchie's a great guy, and extremely intelligent. Good for him to have a little fun.

Long live CWT.

"Good for him to have a little fun"

long live CWT, indeed

After reading that memo, I wouldn't be surprised in the slightest if 20 is exactly who he says he is.

http://www.nytimes.com/2009/03/25/opinion/25desantis.html

ATL Commenter 1: Oh this cwt parter is such a lame moron.

ATL Commenter 2: He was actually DAVIS POLK parter for the past decade.

ATL Commenter 1: *swoons* *starts sucking cock of former davis partner*

ATL Commenter 1: Oh this cwt parter is such a lame moron.

ATL Commenter 2: He was actually DAVIS POLK parter for the past decade.

ATL Commenter 1: *swoons* *starts sucking cock of former davis partner*

9 = idiot. how do you figure that the people who already think that the tax is dumb are the people who "matter"? since when is preaching to the choir worth anyone's time?

that was horribly written garbage. that moron should have (probably did) had an associate write it. i bet it was a former NYU law skit writer.

28 responding to 36 (briefly):

1) AIG is a sophisticated entity? Are you f'ing kidding. This is a company that had the largest corporate loss in history because it allowed a unit to create hundreds of billions of dollars in "insurance" contracts backed by AIGs AAA credit rating. The idea that once the losses were discovered it knew exactly what to do and knew that it had to retain these valuable employees who created those CDSs is ridiculous and rejected. AIG panicked and now we are seeing the result of this panicking in the form of massive bonus payments. Even the current AIG CEO agrees that bonus payments are unwarranted and rejected.

2) Congress authorized these payments -- No, while Congress screwed up, I believe that the contracts were entered into in October and that the entity generally in charge, like now, was Treasury: Hank Paulson.

3) The current AIG bonus-loving employees are like bankruptcy lawyers -- the most absurd argument in your piece. Bankruptcy lawyers come in after the mess has been created and they clean it up. They provide a valuable service. Conversely, the AIG employees created the mess and then they are holding Americans hostage by demanding that we pay them for cleaning it up. I, for one, dont believe in extortion. We dont pay polluters to clean up the mess they made, we dont pay terrorists to defuse their own bombs. Nor should we pay AIG employees for doing their job correctly. What we should do is say we'll come after all the money you previously obtained (as it was based on fraudulent performances) if you dont unwind this mess.

12, for the record, the US can (and very definitely does) tax income earned in London of US citizens, subject to an income tax treaty. I would not be surprised if a significant number of AIG's London operation are actually US citizens. However, you are correct that income of non-US person employees earned in London would not be subject to the US tax code.

28 and 36 - Will you two shut the F up? First, AIG is merely emblematic of the fix that our corrupt government put in place. And that's Dems and Cans alike, for all you Obama haters. Deregulation lead to this disaster and AIG is just one of the countless thousands of financial entities that took advantage of it. Now we're beating them up because we don't know who we really should beat up. Fact is, we are all pig ignorant and have to live with sleeping in the bed of sh*t that we all helped make. America is finished, get used to that fact.

29, best comment ever

LOL. 1Ls calling a former partner of DPW, Columbia MBA, and Yale grad an idiot.

Reading ATL comments reminds me how pathetic most law students are.

I am in love with Ray. You're #1 buddy, #1.

The funniest comment here goes to #29, especially because it wouldn't surprise me if it actually was Ray. That guy is hysterical.

The funniest comment here goes to #29, especially because it wouldn't surprise me if it actually was Ray. That guy is hysterical.

20 is a great comment regardless of whether it is the man himself or a commenter with a good sense of humor

"Reprehensibled" ??? The guy writes like a seventh-grader... and he's a partner at a law firm? Oh please.

Mr. Lofchie, stop embarrassing yourself.

Ray, I thought you were co-head - what happened?

Ray is not a "co-head". He is a "cokehead".

yeah, jeez, what a joke. they're really hurting in '09.

Mar 26, 2009 - Cadwalader won Restructuring Law Firm of the Year , and a matter on which the firm acted as counsel for CIFG Holding Ltd. was presented with Deal of the Year , at the 2009 IFLR Americas Awards.

Mar 16, 2009 - Cadwalader is advising a group of senior secured creditors of Netherlands-based NXP Semiconductors in relation to NXP's pending exchange offer.

Feb 18, 2009 - Cadwalader is representing TradeComet.com LLC in an antitrust action alleging that Google, in an effort to thwart TradeComet.com’s subsidiary, SourceTool.com, blocked search traffic by instituting large price increases.

Feb 5, 2009 - The Department of Treasury has hired Cadwalader to advise the U.S. government on the restructuring of troubled U.S. automakers.

Jan 27, 2009 - Cadwalader represents former directors and officers of Pfizer, who were defendants in a derivative suit alleging that the company sold Celebrex and Bextra despite alleged cardiovascular risks associated with the drugs. On January 27, the U.S. Court of Appeals for the Second Circuit affirmed the decision of the U.S. District Court for the Southern District of New York to grant the defendants' motion to dismiss the action.

Jan 26, 2009 - Cadwalader is representing Pfizer in its acquisition of Wyeth in a $68 billion cash and stock transaction that creates one of the world's most diversified companies in the global health care industry.

Jan 22, 2009 - CIFG Holding, Ltd., the holding company for CIFG’s financial guaranty subsidiaries, along with its principal shareholders, Banque Populaire Group and Caisse d’Epargne Group, reached a final settlement with credit default swap counterparties and bondholders of ABS CDO exposures and certain CRE CDO exposures. Cadwalader acted as CIFG’s legal counsel.

Jan 20, 2009 - The U.S. Bankruptcy Court for the Northern District of Texas confirmed the Plan of Reorganization for Heartland Automotive proposed by the debtors and Cadwalader's client, the Unsecured Creditors Committee. The Plan was confirmed in just over 12 months.

Jan 9, 2009 - Cadwalader Helps Lyondell Secure Record DIP Financing.