Archive for the 'Law' Category

A Failure of Corporate Governance

Published
by
Doug
on September 17, 2008
in Corporate Governance and Law
. 1 Comment

Writing about the failed financial institutions, Carl Icahn feels “it is difficult to see how one could reach any conclusion other than that the boards of directors of a number of these imploded financial firms utterly failed to successfully implement some of their primary tasks - to oversee management and monitor and evaluate risk controls.”

I concur with Carl. The problem with these failed institutions was excessive risk-taking and excessive leverage. Each one of these failed institutions had boards of directors to watch over management, so what went wrong with these directors?

First there is the problem that these board members are most likely paid far too much for doing far too little. The board seat might even constitute a substantial portion of the board member’s total salary. With high compensation, it is little wonder that a director would not want to challenge management lest he or she be terminated and lose that easy money.

One idea I have to foster an environment in which a board of directors takes a more active role in monitoring a company is to codify Warren Buffett’s requirements for his BoD. Buffett’s rules are very simple and are designed to align the director’s interests with the shareholders: (1) the director must be a longtime shareholder, (2) a substantial shareholder, and (3) the must only receive minimal compensation.

Buffett’s easy rules for directors would be an excellent start and I think much preferable to more minute, detailed regulations that would continue to ratchet up costs of compliance with the SEC.

Need Cash? Kill Someone for Their Custom Rims

Published
by
Doug
on June 13, 2008
in Law
. 0 Comments

While doing some research on an issue regarding admissibility of drug screening tests in civil cases, I stumbled upon this gem of a case: Fann v. State, 275 Ga. 756 (2002). What amazed me was how quickly the defendant was able to sell the custom rims of the victim he murdered. Here’s an excerpt:

Octavius Fann was convicted of felony murder and armed robbery for the shooting death and robbery of Clemmie Adams.FN1 On appeal, Fann contends that his trial attorney provided ineffective assistance of counsel. Because that claim and Fann’s other enumerations of error are without merit, we affirm.

[FN1. The crimes occurred on January 31, 2000. A grand jury indicted Fann on April 27, 2000 for malice murder, two counts of felony murder, armed robbery, and possession of a firearm by a convicted felon. On August 23, 2000, a jury acquitted Fann of malice murder and convicted him of the remaining counts. The trial court sentenced him to life imprisonment for one count of felony murder and merged the remaining convictions. Fann moved for a new trial on September 22, 2000 and amended his motion on December 19, 2001. The trial court denied the motion for new trial on February 28, 2002. Fann filed a notice of appeal to this Court on March 28, 2002, and the case was submitted for decision on June 17, 2002.]

Taken in the light most favorable to the jury’s verdict, the evidence presented at trial showed that, on January 31, 2000, Adams was in his Lincoln Navigator when Fann shot him and pushed him out of the Navigator. As Adams lay in the street, Fann stood over him and yelled “give me the money; give me the dope.” Fann then rifled Adams’s pockets before driving away in the Navigator. A few hours later, Fann sold the Navigator’s wheels and custom rims for $500 and abandoned the rest of the vehicle. We conclude that there was sufficient evidence from which a rational trier of fact could have found Fann guilty beyond a reasonable doubt of the crimes for which he was convicted.

Westlaw’s New Subprime Filing Database

Published
by
Doug
on April 2, 2008
in Law
. 0 Comments

Westlaw has introduced a the new SUBPRIME-FILING database, which includes motions, memoranda, pleadings, and other trial filings relevant to the current sub-prime mortgage lending controversy from selected state trial courts, United States District Courts and United States Bankruptcy Courts. The coverage of the database begins with 2006.

Just to see what’s going on in the state of Georgia, I did a blanket search and Westlaw returned a total of 81 documents. I wonder how many there will be by the end of the year?

We’re All Journalists Now

Published
by
Doug
on March 7, 2008
in Books, Law, Media and Reviews
. 0 Comments

typewriterThomas Shevroy reviews Scott Grant’s new book We’re All Journalists Now. The “new media” and the rise of the blogosphere and its role in reporting and its interaction with the traditional press is a very interesting topic to me. I’ve been blogging off and on for almost six years now and have been reading blogs for almost seven or eight.

Here are some excerpts from the review:

Gant’s thesis is simple, straightforward and stated in the title. He is suggesting that the boundaries between professional journalism and the communications of ordinary citizens are collapsing, if they have not already collapsed. Moreover, legal rulings have provided a mixed and confusing picture of current professional protections of journalism. Gant steps into this fluid context with an intervention that is both conceptual and practical. He wants his readers to understand the nature of changes that are occurring, and he wants practical changes in law and policy that reflect these broader underlying structural transformations.

I agree with Gant here, that traditional boundaries have fallen and will continue to fall. I also suspect that there will eventually be a Supreme Court case that features a blogger or at least addresses the issues of whether bloggers have the same sort of protections as the traditional press.

Gant in his book writes that the protection of the press does not come from legal opinions like I think most people seem to think.

Where much of the press’ protection comes from, then, is not legal opinions, but the credentialing process. The press is given special access, Gant argues, for several reasons: because of the mistaken belief that the Constitution supports them, because of more general sense that access is “beneficial to society,” because of explicit legal rules or other regulations that extend such privileges, or simply due to ad hoc decisions on the part of those in positions of authority. When new media practitioners have sought access to the same sets of entitlements, they have often met resistance from their “professional” peers. The online paper, WORLDNETDAILY¸ was refused press access to the House and Senate galleries for more than a year, until the Standing Committee for Correspondents changed its position and allowed admission. Institutional rules differ between government branches, and across state and local jurisdictions, but the practice of credentialing conventional media organizations is widespread.

Also interesting is reviewer’s warning of the potential problems of lowering the bar between the professional press and non-professional press:

Most obviously, line-drawing may be difficult, especially in terms of access. While there are many interesting, insightful, thoughtful, and provocative digital media sources worth giving access to spaces from [*131] which they are now excluded, there are also online bloggers and news writers who tread the boundaries, not just of legitimacy, but of rationality. There is also a danger that the protections now given to professional journalists could be retracted without a concomitant expansion of First Amendment protections to the rest of us. The imprisonment of journalists, and expanding the reach of libel law, does probably not bode well for First Amendment protections overall. To Gant’s credit, he addresses some of these counterarguments. Whether he has provided compelling responses can be left to the reader to judge.

This was a good review and sounds like an interesting book. If only I had more time to read.

Predictions from a Bankruptcy Lawyer

Published
by
Doug
on March 4, 2008
in Credit, Economy, Law and Recession
. 0 Comments

A top bankruptcy lawyer predicts that the retailing, real estate, and auto parts industries will be the hardest hit by the credit crunch and the downturn of the economy.

As companies begin to pile up bankruptcy protection — Sharper Image, Lillian Vernon and Plastech, just to name a few recent filings — Investment Dealers’ Digest went to Harvey Miller of Weil Gotshal & Manges, one of the nation’s most prominent bankruptcy lawyers — to get his take on what’s in store.

Mr. Miller, who spent some time at investment banking boutique Greenhill & Company before returning to Weil Gotshal last year, told the Digest that a long-delayed round of restructurings may finally be at hand.

Easily available refinancing helped paper over a multitude of sins in the last few years, but the credit has dried up. That is likely to leave many companies with few options, Mr. Miller said.

He said retailing, real estate and auto parts are some of the industries that may be hit hardest. He also predicted some pain at well-known private equity firms — although he didn’t name names. “Portfolio companies of very respectable and reputable firms are going to have some level of problems,” Mr. Miller told The Digest.

Real estate and retailing have already been hit pretty damn hard. I see this as another sign people are preparing for the worst and that the worst has yet to come.

Puddle Jumper Loses

Published
by
Doug
on February 26, 2008
in Law
. 0 Comments

The citation to this excerpt is “1 GAREALEST § 11-57″ if you use Westlaw. I just found this amusing title while researching liability for personal injuries on premises.

Puddle jumper loses. Summary judgment was issued to a landowner in connection with an injury suffered by a licensee who attempted to jump a puddle of water located on the property. The puddle was an obvious static condition which the injured party could have easily avoided by taking the sidewalk to the parking lot. The plaintiff failed to exercise due care when confronted with the puddle and performed an obviously dangerous act by attempting to jump over it. Moss v. Georgia Department of Public Safety, 247 Ga.App. 426, 543 S.E.2d 799 (2000).

I guess the lesson here is that you’ll have a tough time suing a landowner after you injure yourself trying to jump a puddle.

$25 million for yanking hospital privileges

Published
by
Doug
on February 23, 2008
in Asides, Health Care and Law
. 0 Comments

$25 million for yanking hospital privileges sounds a little steep to me, though I could be wrong.

Federal Court Freezes Assets of Hedge Fund

Published
by
Doug
on June 29, 2007
in Ethics, Hedge Funds and Law
. 0 Comments

Bloomberg reports, “Lake Shore Asset Management Ltd., a hedge fund firm run by a former chairman of the Chicago Mercantile Exchange, had its assets frozen by a federal court after regulators said it overstated its holdings.”

I am guessing that stories such as these will continue on for a couple more years until there is another huge financial crisis.  Then our lawmakers will go on a crusade to score political points and pass overly restrictive legislation that ends up hurting investors and businesses more than helping protect investors.

But it is difficult to argue with Geoffrey Aronow, the former head of enforcement at the CFTC.  “Whether it’s conscious or not, everyone is more attuned to concerns to what’s going on with hedge funds.”

Some Get to Speak While Others Don’t

Published
by
Doug
on June 26, 2007
in Law
. 0 Comments

We’ve got five recent Supreme Court decisions.  I for one am happy most of all about the Federal Election Commission v. Wisconsin Right to Life decision (click here for a quick take).  Take that John McCain!

But the most disappointing ruling out of the lot is the “Bong Hits For Jesus” case.  Apparently kids in high school lack the the same basic rights as the rest of Americans.  The WSJ’s Law Blog has a short summary and some highlights in the opinion: “Justice Stevens Wafts Into Marijuana Debate.“

Nifong Could Get Jail Time

Published
by
Doug
on June 22, 2007
in Ethics and Law
. 0 Comments

Fox News reports that Mike Nifong could get jail time as a result of his actions in the Duke rape case scandal. I for one would push for jail time in this instance for many reasons.

For starters, he nearly ruined the lives of those he sought to prosecute and cost their families millions of dollars in legal fees. He lied, withheld evidence and interfered with the administration of justice. He brought shame and dishonor to the legal profession. As a consequence, Nifong was disbarred. I’m unsure as to whether there is a good chance of Nifong serving jail time, but given the egregious nature of the case and the national attention it received there is definitely a larger chance that North Carolina will seek to make an example out of this disgraceful man.