Your Tuesday Morning Digital Dump!

So I know we're all politically engaged, what did you think of the debate?

Here's my takeaway:

And of course there's this:

Alright, enough politics.

I see my pal Paul Huck Jr. landed at Hunton:

Paul Huck Jr., the husband and son of judges, has joined Hunton & Williams as a partner in the Miami office.

Huck, a litigator, worked at Colson Hicks Eidson in Coral Gables for four years and served as general counsel to then-Governor Charlie Crist from 2007 to 2008.

Huck said he was looking to join a national law firm to expand his commercial litigation and attorney general investigation practice. He represents clients who are being investigated by the Florida attorney general’s office on civil matters.

“I was looking for a firm with a national footprint,” he said.

Note to managing partners -- this is how you gracefully handle a lawyer departure:

“Hunton & Williams is fortunate that he has joined,” Dean Colson, managing partner at Colson Hicks Eidson said in a statement Monday. “We know that Paul will continue to be very successful, and we wish him nothing but the best.”

Well done, Dean (and Paul)!

In other news, 11th Circuit appellate junkies will rejoice over a weird quirk that happens when en banc review is evenly divided -- the district court judgment is affirmed by operation of law, and the panel opinion is wiped out as if it never existed:

The decision of the district court is affirmed by an evenly divided court. The opinion of the panel remains vacated. United States v. Geders, 585 F.2d 1303, 1306 (5th Cir. 1978) (en banc) (“[T]he court en banc is evenly divided; therefore the judgment . . . of the district court is affirmed by operation of law.”); see id. (indicating that, if district court judgment is affirmed by operation of law, the panel opinion remains vacated); see also Reshard v. Britt, 839 F.2d 1499 (11th Cir. 1988); United States v. Sigma, Int’l, Inc., 300 F.3d 1278, 1280 (11th Cir. 2002) (en banc) (noting that when panel opinions are vacated they “are officially gone,” and “are void,” and none of the statements made in them “has any remaining force and cannot be considered to express the view of this Court.”).

Sorry panel, your opinion has been officially vaporized!

Jerry Borbon's Wife is Terrified.

Like many of you, I get ready for work in the morning the old-fashioned way: by downing two raw eggs dropped into a shot of whiskey.

Then I jump in my mint-green Dodge Dart, turn up the Terry Jacks, and head downtown.

But some of these new-fangled fancy-pants tree-huggers, however, want to "save" the "environment."

And isn't that always how trouble starts?

For example, take foreclosure defense attorney Jerry Borbon, whose wife drives an (allegedly) scary yet environmentally safe car:

"My wife has been worried about it for a while. She's eight months pregnant and she's terrified to drive the car now," said Jerry Borbon, a Miami lawyer who is still driving his 2008 Toyota Prius and is a plaintiff in a potential class-action lawsuit.

"We thought about trying to get rid of it, but we're stuck with it," he said, adding Toyota's damaged reputation has made it hard to sell the vehicle. "I don't feel secure in the car and I don't want my wife driving it."

Jerry, here's what you need to do.

You need to let regulators like NHTSA and the Transportation Department handle it. The government has proven it knows how to deal with this stuff and they have a lot of experienced people there:

A Washington Post analysis shows that as many as 33 former National Highway Traffic Safety Administration employees and Transportation Department appointees left those jobs in recent years and now work for automakers as lawyers, consultants and lobbyists and in other jobs that deal with government safety probes, recalls and regulations.

Oy.

On second thought, better call Mike Eidson?

Lawyers (Allegedly) Behaving Badly.

stucomplaint

I'm still on a high from last night's Bar thingy, so I'm reluctant to wade into these stories, but they are pretty extraordinary.

First, this blockbuster Julie Kay piece (she's the best, right?) involving Fowler White's Lilly Ann Sanchez:

The suit concerns Sanchez’s representation of Rivero, who pleaded guilty in 2008 to misusing $700,000 out of $3 million he was paid by the Miami-Dade Housing Agency to build affordable housing for senior citizens. Rivero admitted diverting public money to build himself a dream house in South Miami and was sentenced to more than a year in prison. He was recently released.

The primary allegation in the civil suit is that Sanchez and her law firm aided Rivero in a scheme to switch copies of a property deed, one that was witnessed and one that was invalid because it was not witnessed. The in-laws claim Rivero promised the deed in exchange for $1 million, but they received the worthless version.

Among the more explosive charges alluded to in the suit are that Sanchez had an affair with Rivero when he was married and he was paying her personal bills, which was “inappropriate to the attorney-client relationship.” Hall represented Rivero’s ex-wife in their divorce.

Roberto says it's all H.R. Pufncrap:

The law firm and Sanchez “acted professionally in full compliance with their ethical and legal obligations. It is unfortunate that a lawyer with a long-standing impeccable reputation must now litigate what has already been admitted by Mr. Aleman under oath in deposition testimony in the other cases: that Fowler White Burnett and Ms. Sanchez were never involved in the preparation of any improper deed or transaction.”

Oh well, that's what they have courts (arbitrators?) for I guess.

Then we have Big Stu, who according to this pleading had a rather unorthodox compensation plan at RRA:

26. The payments made to Rosenfeldt for salary, bonus or other distributions are collectively referred to below as the “Compensation Payments.” The Trustee challenges the reasonableness of these Compensation Payments for each of these years, based upon various factors related to the operation and profitability of law firms and attorney compensation structure. The amounts challenged as being overpayments of compensation for the 4-year period subject to this lawsuit were unreasonable and improper.

27. The fact that significant amounts of alleged bonus or other payments to Rosenfeldt are not related to actual earned compensation ties to the timing of when Rosenfeldt received certain of such payments, and how he thereafter paid out similar amounts of money as political contributions. For example, and demonstrating it was part of a scheme to funnel cash out of RRA to use for political contributions and not to pay legitimate earned income, on May 19, 2008, Rosenfeldt, Russell Adler (“Adler”) and Steven Lippman (“Lippman”) each received an alleged bonus of $140,000 from RRA. On May 28, 2008 Rosenfeldt made a donation of $140,000 to the John McCain presidential campaign. Also on May 28, 2008, Lippman and his wife Marcy, made payments to the same campaign of $65,000 and $60,000 respectively. On June 12, 2008, Adler contributed $80,000 to the McCain campaign and his wife Katie likewise contributed $39,200. Thereafter, and through the balance of 2008 and much of 2009, Rosenfeldt, Adler and Lippman each received periodic alleged compensation payments from RRA and they (and/or their wives) then made a series of political contributions that trace close to receipt of the monies (which was received both before and after the contributions) with similar, if not identical payments then being made to the same candidates or political parties, including the McCain campaign, the Florida Republican Party, the Ohio Republican Party, the Pennsylvania Republican Party, the Missouri Republican Party, the Michigan Republican Party and Governor Charlie Crist. The bonus or other compensation payments that were used to pay for political contributions provided no consideration to RRA and thus, RRA received less than a reasonably equivalent value in exchange for these payments.

28. The second set of payments the Trustee seeks to recover includes reimbursements for personal expenses that improperly benefited both Rosenfeldt and Suzanne Rosenfeldt. During the years 2006 through 2009, on a monthly basis, Rosenfeldt had unfettered personal use of the RRA American Express card. During this time, for his and his wife’s benefit, Rosenfeldt improperly charged to RRA over $1 million in purely personal expenses, including $439,337.45 just from December 3, 2008 through June 18, 2009. Examples of Rosenfeldt’s personal expenses paid by RRA that personally benefitted Rosenfeldt and Suzanne Rosenfeldt include: 72 pieces of jewelry purchased from J.R. Dunn Jewelers, numerous local hotel room charges, furniture for their home, vacations and personal travel, exotic reptiles, home repairs, athletic club charges, men’s and women’s clothing, groceries, charitable contributions, personal meals, general household items and other items (“Personal Expense Payments”). RRA received less than reasonably equivalent value in exchange for these expense reimbursements.

29. The third set of payments the Trustee seeks to recover includes reimbursements for payments made by RRA to Rosenfeldt which were classified in RRA’s financial records as “loans” and are referred to below as the “Rosenfeldt Loans.” These payments were reflected by numerous checks written by RRA to Rosenfeldt from the RRA operating account, often in random dollar amounts. The loan checks were sometimes issued on the same day with a loan check in numbered sequence to another RRA partner, Steven Lippman (“Lippman”). Typically, Rosenfeldt would deposit each check into his personal bank account, then shortly after the deposit by Rosenfeldt of the RRA check, he would write a check out that personal account payable to RRA in an amount less than the check RRA had given him. The Rosenfeldt Loans totaled $8,960,310.75.

30. In some instances, after Rosenfeldt received a check from RRA, and rather than repaying RRA, he wrote the return check to third parties including: (a) at least one check to Kendall Sports Bar on June 19, 2006 in the amount of $61,500, (b) numerous checks to Russell Adler in amounts of $1000 to $5000 referencing “loan.”

Exotic reptiles?

Oy.

Putting aside questions of knowledge etc, what kind of farcockta law firm operates like this?

There's not enough Xanax in South Florida for me to be able to deal with these kinds of crazy allegations.

Judge Moreno Awards Fee Enhancement in MBC Receivership

Remember Judge Moreno's reaction to the requested $11 million MBC fee enhancement request?

It almost caused a judicial heart attack:

“I needed a defibrillator,” he joked. “We’re talking about a lot of money.”

Well the judge must have had a nice herbal tea which settled his nerves, because on Friday he granted most of the request:

In this case, the uniqueness and complexity of the issues required lawyers with substantial skill, expertise, and tenacity, and it is undisputed that the lawyers' excellent representation enhanced the asset pool of funds to be distributed. Under these facts, these great lawyers did make a difference, and they should be compensated at a rate higher than $2 18 or even $264 per hour.

On the other hand, as the Receiver concedes, the Court wrote in WaIco Investments, Inc. v. Thenen, 975 F. Supp. 1468,1472 (S.D. Fla. 1997), that "the presence of a consistently paying client for four years, even at a reduced hourly rate, would warm the heart, let alone the pocketbook, of even the most successful securities litigator." Therefore, the Court must consider the good results obtained as a result of the attorneys' great work, but at a rate less than the $550 to $765 being paid by clients in the free market in South Florida.

Balancing these factors, the Court believes that $450 per hour is a reasonable rate in this case in the Southern District of Florida. At $450 per hour, the total compensation for 18,740 hours should be $8,433,000. The Receiver's motion states that the Receiver's lawyers have already been paid $3,876,081. Thus, the Receiver's lawyers shall be entitled to an additional award of $4,556,919 for its work through April 2009. Moreover, because the 18,740 hours worked by the law firms do not include work past April 2009, the Court will grant attorneys' fees for the work done after April 2009.

Seems like the right call to me.

Curtis Miner Bottom Lines and Triple Underscores Something

Colson Hicks attorney Curtis B. Miner nudges his case into the headlines today on the big sugar deal:

In January, three former U.S. Sugar employees filed a federal lawsuit in West Palm Beach seeking class-action status, alleging the privately held company's board kept secret two $575 million buyout offers in recent years that were rejected.

An attorney for the employees said on Monday that the lucrative state deal shows employees were getting less for their stock than it was worth.

U.S. Sugar employees own about 35 percent of the company through an Employee Stock Ownership Plan, or ESOP, according to the suit. The employee stock plans are a common ownership structure for thousands of American companies.

U.S. Sugar bought back employee-owned shares in recent years for about $200 per share as employees retired, according to the suit. The two $575 million offers rejected by the board valued the shares at $293 apiece, the suit says. As the number of outstanding shares were reduced, the suit alleges that increased the value of the remaining shares, including those controlled by directors, officers and descendants of the company's founder.

U.S. Sugar and the other individual defendants, including board chairman William S. White, have filed motions to dismiss the suit. The company has said the suit has no merit.

Some 4,000 former and current employees are affected.

The suit also names as a defendant the $2.5 billion Charles Stewart Mott Foundation of Flint, Mich., which owns 19 percent of the shares and donates millions of dollars annually to combat poverty, promote social causes and protect the environment.

Coral Gables attorney Curtis Miner, who represents the plaintiffs, said the $1.7 billion public buyout of U.S. Sugar bolsters the contention that employees were paid below fair value.

"The bottom line is, I think this just triple underscores that the U.S. Sugar employee shareholders were being vastly underpaid for shares," he said.

Throwing in "bottom line" only makes that "triple underscoring" quote doubly delicious. Good luck with the suit.