Bankruptcy

UPDATE (May 30): Law student responds via YouTube, and shows off his very impressive office.

A law student in Massachusetts is looking for a job. He found a listing on Craigslist to work as a paralegal for a bankruptcy attorney. He applied, got an interview, and got an offer (kind of). But then he got into a spat with the attorney via email, preserved for posterity by The Docket.

The law student interviewed on Monday. On Tuesday, the female attorney sent him a rather candid email:

I have to confess, I am on the fence about offering you a position. This is a thought I had…tell me your thoughts.

The thought was that she would have the law student do a few freelance projects for a month, and if those went well, she would offer him a full-time position. He responded:

I can do any type of Motion, and research. I do not think a 30 day trial period is necessary. I would prefer bring me on full time to show you my capabilities.

That’s really not the right time for a grammatical typo, my law school friend.

In response, the lawyer laid out exactly why she had reservations about him, and wished him “best of luck in [his] job search.” That just made him crankier…

double red triangle arrows Continue reading “A Mass. Lawyer You Don’t Want to Work For and a Law Student You Don’t Want to Hire”

In journalism, there are certain go-to stories that one writes around big events. At Halloween, everyone writes the “most popular costume” story. At Christmas, it’s the “most popular toy” story. At Thanksgiving, it’s the “how the community is giving back” story.

Over the last two years, a recurring event has been “the big bankruptcy.” And it seems that the journalistic go-to is the “how much are the greedy lawyers making off of this” story. We’ve seen it with the GM bankruptcy, the Tribune bankruptcy, and the Chrysler bankruptcy. Yesterday, the New York Times applied the story model to the Lehman bankruptcy, but they got pay czar Kenneth Feinberg to weigh in — and lay into the firms working on the case: Weil, Jones Day, and Milbank.

“It violates any sense of proportion,” says Kenneth Feinberg, the Washington lawyer who serves as the “pay czar” for banks bailed out by the government and whom the court appointed last June to monitor fees associated with the Lehman bankruptcy. The court asked him to participate after concerns were raised in the news media about the soaring fees in the Lehman case.

“Unemployment is over 9 percent, and to be paying first-year associates $500 an hour angers the public,” he observes. “People read about all of this and say that lawyers and the legal system are one more example of Wall Street out of control.”

The article outlines the fees that have outraged — tangential Nationwide Perk Watch: Weil attorneys get limo transport — and the new limits that have been placed on bankruptcy attorneys on the case. No first class for you!

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The Supreme Court ruled that a student’s failure to show undue hardship didn’t void a bankruptcy agreement to discharge student debt. It’s a minor victory for student debtors everywhere, and Justice Clarence Thomas did all he could to limit its effect.

The decision came down today in the case of United Student Aid Funds v. Espinosa. Justice Thomas, writing the opinion for a unanimous Court, ruled that a bankruptcy judge should have required trade school student Fransisco Espinoza to show undue hardship before approving the discharge of Espinosa’s student debt. But the error was not serious enough to void the agreement.

SCOTUSblog explains that the holding is very limited:

Today’s ruling in the student loan case is confined primarily to the situation where a discharge of such a debt has become final without the creditor using its option to challenge it at the time. It makes clear that bankruptcy courts may discharge a student loan debt only if they find it is an undue hardship to require payment.

Thomas’s language upholds the notion that undue hardship must be a part of the discharge of student debt …

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anna nicole smith.jpgDespite her death back in February 2007, Anna Nicole Smith (aka Vickie Lynn Marshall) continues to make headlines. From the Ninth Circuit comes bad news for her former lawyer (and lover) Howard K. Stern, and her daughter, Daniellynn. From E! Online:

[A court] said today that the estate of Anna Nicole Smith is not entitled to the $300 million-plus judgment previously awarded from her late oil tycoon hubby’s billion-dollar estate.

The court battle over Texas oilman J. Howard Marshall II’s millions has been ongoing since 1995.

You can download the opinion from the Ninth Circuit here [PDF]. You’ll see a familiar name on the list of counsel.

Kathleen Sullivan, new name partner at Quinn Emanuel, filed an amicus brief in the case for the Washington Legal Foundation, arguing in support of the decision by the Texas probate court that originally denied Smith’s claim to Marshall’s $1.6 billion fortune.

This could make for an appropriate last act in the forthcoming Anna Nicole Smith opera.

UPDATE: Congratulations to Dechert partner G. Eric Brunstad, the veteran Supreme Court litigator who represented the victorious estate of Pierce Marshall in this case. (Brunstad was also Lat’s bankruptcy law professor at Yale.)

Remember All Those Millions? Anna Nicole’s Estate Can Kiss ‘Em Bye-Bye [E! Online]
SF Appeals Court Denies Anna Nicole Smith Estate’s Claim To Millions [KTVU]
In re: VICKIE LYNN MARSHALL, Debtor. ELAINE T. MARSHALL v. HOWARD K. STERN
[U.S. Court of Appeals for the Ninth Circuit]

Crushing Debt Obligations.jpgI spent all day yesterday trying to summon the rage, trying to figure out a way to trumpet the cause of a sixty-something, recent law school graduate who is still having trouble discharging her student loans in a bankruptcy proceeding. The National Law Journal has the tear-jerking story:

When she graduated four years ago with a law degree at the age of 61, Denise Megan Bronsdon likely did not foresee bankruptcy court in her future. But that’s where she ended up — as a debtor.

The former farmer’s wife, who operated a tractor before going to Southern New England School of Law in 2002, convinced a Massachusetts bankruptcy court in January that repaying the more than $82,000 she owed in student debt would create an undue hardship. However, the U.S. District Court in Massachusetts, considering an appeal by the lender, Educational Credit Management Corp., found on Nov. 20 that Bronsdon’s decision not to participate in a loan repayment assistance program should be part of the bankruptcy court’s undue hardship analysis.

If I was half the man I used to be, I’d take a flamethrower to this place. Hoo-Ha!
But the problem with my flamethrower is that I do not know where to point it. I could get angry at the entire system that makes student loans so difficult to discharge through bankruptcy. Or I could get mad at the law school that essentially stole this woman’s money. Or I could get angry at the woman herself — who failed the Wisconsin bar three times.
Oh, I know, let’s get pissy at all of them.

double red triangle arrows Continue reading “Discharging Law School Debt in Bankruptcy Doesn’t Get Any Easier When You Are Old”

bankruptcy boutique.jpgTime to resume our series of open threads covering small (or smaller) law firms, focused on different practice areas. We’ve already written about small law firms in general, insurance law, personal injury law, trusts and estates, immigration, real estate, intellectual property, ERISA / employee benefits, and family law / divorce law. Some of these threads are still active (or could be resuscitated), so do check in on them.
Today we turn to the booming field of BANKRUPTCY. This practice area might seem depressing, given its focus on financial distress, but some people find it quite sexy.
A long time ago, the field was generally shunned by large firms, so that most firms doing bankruptcy were on the smaller side. But Biglaw embraced bankruptcy years ago, and it’s probably glad it did. The bankruptcy departments of large law firms are super-busy these days, providing a partial hedge to the weakness on the transactional side.
What about bankruptcy boutiques — how are they doing? Some material to kick off the discussion, after the jump.

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Craigslist small.jpgLike most people, I’m having trouble focusing on my duties given the perils of Balloon Boy, Falcon Heene. According to my television, the balloon is down, there is no boy in it, and as of now we don’t know where the boy is. And the parents were on Wife Swap. Here’s a write-up of the episode the Heene family was featured on. Crazy story.
Of course, multitasking is an important life skill. It’s a skill that one law student hasn’t seemed to master, at least when attractive women are around. Here’s the Craigslist ode from a law student somewhere in the D.C. area to an apparently stunning vixen:

Morally Bankrupt – m4w
I saw you in my bankruptcy class. I was so distracted by you that I could barely pay attention to the riveting lecture about the history of bankruptcy law. I imagine that you are a creditor and I am a bankrupt and I will have to work off my debt for you or risk debtor’s prison. You can have whatever you want; no state law exemptions. I want you to declare bankruptcy all over me.
I am sick of ending my nights pro se. I promise if you entertain my claim that you will have a huge judgment entered in your favor over and over again. We can even violate the Model Rule of Professional Responsibility and engage in a 108(j).
My interests include hilarious law-based puns; and mocking others. If you think we are a match, let’s grab a drink after class. I know it’s a weeknight but my parents let me stay out as late as I want to as long as I call by 11pm to check in with them.
P.S. I am neither the ginger nor the weird guy next to you.

Beautiful bankruptcy babe — you know who you are — it looks like you have a not-so-secret admirer. Let us know if it works out.
Morally Bankrupt [Craigslist]

Heller Ehrman small logo.jpgIt’s been a long time since we checked in on the ruins of Heller Ehrman. It seems strange that it’s been over a year since Heller Ehrman announced that it was closing its doors.
Everybody that was going to land on their feet after Heller collapsed has presumably landed. Those who never did get a job back in Biglaw post-Heller have hopefully moved on to other lucrative and rewarding careers.
While most of Heller’s employees have moved on, it looks like some of Heller’s things are still looking for new owners. One tipster reports that you can purchase your own little piece of Heller if you want to:

FYI the art from the Heller Ehrman art collection is up for sale at Bonhams New York:

Sale 17421 – Contemporary and Modern Art

Let’s take a look at what fine pieces of art you can score from the demise of Heller Ehrman.

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Don’t get too comfortable with that shiny new #6 Vault ranking, Weil Gotshal. The firm just got served, Texas-style. The ABA Journal reports:

The Texas judge who ordered Microsoft to pay $290 million for infringing a patent included a $40 million enhancement that he said was partly justified because of alleged trial misconduct by a lawyer from Weil, Gotshal & Manges.

U.S. District Judge Leonard Davis tacked on the $40 million penalty because of evidence of willful infringement. But also “favoring enhancement,” he said in an opinion, was trial conduct by lawyer Matthew Douglas Powers, a Weil Gotshal partner.

Matthew Douglas Powers is a big name in IP circles. And he’s the co-chair of Weil’s litigation department. But he’s not going to comment on Judge Davis’s $40 million critique of his trial performance.

What were the judge’s reasons for admonishing Powers? Check after the jump.

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blank rome summers no offers.jpgThis year hasn’t been a fabulous one for Blank Rome. They’ve had to cut both salaries and headcount. The firm also pushed back start dates for first-year associates, until “at least” January 2010, and the 2009 summer program was a brief six weeks.
This latest news doesn’t improve matters. From the Legal Intelligencer, via Am Law Daily (and also a commenter):

Blank Rome has entered into a $20 million agreement with the trustee of a former client that is now in bankruptcy to settle a complaint that alleged breach of fiduciary duty, professional malpractice and breach of contract claims against the firm.

The settlement, reached in the Philadelphia Common Pleas Court case Miller v. Blank Rome, was approved by U.S. Bankruptcy Judge Mary F. Walrath for the District of Delaware on July 28. Walrath is overseeing the bankruptcy of American Business Financial Services, which is involved in a string of litigation in both state and federal court stemming from its bankruptcy and business dealings.

Blank Rome does not admit any liability or wrongdoing in agreeing to the settlement, according to the agreement.

Of course they don’t admit liability. Still, $20 million is a lot of dough. Who’s on the hook for that?

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