I bless my lucky stars every day I don't have to think about bankruptcy court and the odd quirks of its jurisdictional reach, the appropriate scope of and standard for district court review, and what can and can't be heard there and why.
(We have geeks skilled bankruptcy specialists for that.)
That's why when I read this important opinion from Judge Marra (involving Judge Stettin, the Rothstein bankruptcy, and TD Bank), I promptly forgot all about it and went to lunch.
Then, as my food was digesting nicely, I felt a sudden rumble in my belly and remembered I forgot to write anything at all about it.
Frankly I'm bored by the Rothstein "revelations" -- about his partners' alleged involvement, the slush funds, the hookers etc. -- but I did find Judge Cohn's order regarding the Trustee sharing confidential information gleaned from an earlier Rothstein interview to be pretty interesting:
In opposition to this cross-motion, counsel for the Trustee explains that the disclosure made to counsel for the Coquina plaintiffs was part of the settlement between the Trustee and Coquina of an adversary action. Counsel states that in the rush to expedite approval of this settlement by the bankruptcy court, he “forgot” the pledge he made to the Court not to disclose the information, and while sincerely apologizing to the Court, further defends the disclosure under the joint interest doctrine. The Trustee contends that the legal basis for non-disclosure of the interview, the work product privilege, is subject to the joint interest doctrine exception, in that once the settlement occurred, the Trustee and Coquina’s interests were aligned against TD Bank.
Ok, that's pretty lame -- I think he should have stopped after "I forgot."
Why apologize if you did nothing wrong?
On the other hand, if you did something wrong, and you have apologized (for which you get much credit in my book), why diminish the apology by trying to defend your actions?
That's the burning question raised by Judge Cohn in his order today:
Counsel for Mr. Rothstein shall respond to the Trustee’s Expedited Motion to Amend Writ of Habeas Corpus Ad Testificandum [DE 53] by November 21, 2011, by updating the Court on his availability for the December 12 deposition, and by stating his client’s position on whether the deposition can go forward without Mr. Nurik’s presence, either with no counsel or substitute counsel;
Well, I suppose you could also pen a deeply-felt and tenderly expressed tome, professing unabiding and undying love, admiration, and respect.
But I know you guys too well for that.
Anyhoo, here's the list of usual suspects:
Philip Cook, Robert M. Deehl, Charles D. Edelstein, Eugene J. Fierro, Seymour Gelber, Marvin H. Gillman, William E. Gladstone, Leonard E. Glick, Jon I. Gordon, Edward S. Klein, Judith L. Kreeger, Thomas K. Petersen, Jeffrey Rosinek, Alan R. Schwartz, Martin Shapiro, Roger A. Silver, Stuart M. Simons, Raphael Steinhardt, Herbert Stettin, Sandra Taylor and David L. Tobin.
You can send your comments via email to seniorjudge@flcourts.org, or snail mail toThomas D. Hall, Clerk, Florida Supreme Court, 500 South Duval Street, Tallahassee 32399.
You can also make actual, real live human contact by calling our very own Judge Juan Ramirez, Jr., chair of the Review Board, at (305) 229-3200, ext. 3216.
I recently had the great pleasure of rewatching Jimmy Caan's best film, Thief, where he plays a Chicago freelance diamond thief dreaming of a better life who gets sucked into working for a local mob kingpin for what Caan thinks is one final heist.
Of course the mobster, brilliantly played by Robert Prosky, has other, longer term plans for the profitable crook.
Naturally we are in a very different context, yet for whatever reason I'm reminded of this superb story line when I read the curious settlement terms reached by receiver Herb Stettin and Russ Adler in the Rothstein bankruptcy, which involves Russ handing over a portion of his settlements or judgments should he be successful in future cases:
The settlement stipulates Adler will pay off the settlement by liquidating a $90,000 IRA and by providing liens on any attorney fee recoveries. The lien is 50 percent on lawsuits Adler prosecuted while at RRA and 15 percent afterward.
So now they're in business together? And Russ is now working to pay off the settlement by trying to settle cases he either has in the hopper or may one day have in the hopper.
This is allegedly due to his current financial situation:
Critical to determining settlement was a detailed analysis of the Adlers’ current financial condition, which based upon mediation related financial disclosures revealed that the Adlers have no existing bank, securities or other accounts upon which to execute, no equity in their home, leased vehicles and no other liquid non-exempt assets that could be used to satisfy any potential judgment. Further, it appears as if the Adlers may be subject to an IRS notice of lien or other action in an approximate amount of $234,000 and Mr. Adler could be facing other types of exposure in potential Florida Bar or criminal proceedings. Thus, the Trustee could have spent a significant amount of money to prepare for and conduct a lengthy trial which he believes would have resulted in a favorable jury verdict, but the likelihood of a successful collection on any such judgment would have proven difficult.
So who's the winner here -- is this a brilliant move by Adler, a smart move by the trustee, or something else entirely?
If she didn't know exactly how her husband made his money, and assumed like all the big shmarties in town that Rothstein had legitimate business investments, then maybe she is somewhat of a victim in all this?
The lawyers itemized a litany of questionable expenses:
• $880,609.77 on an American Express card paid for by her husband's Fort Lauderdale law firm. Among the charges: plastic surgery treatments, hotel and spa charges, groceries, handbags and vacations.
• $104,223.99 on campaign contributions to GOP presidential nominee John McCain and the National Republican Senatorial Committee, which were reimbursed by the firm.
• $153,198.71 for ``professional fees'' paid to her by Rothstein Rosenfeldt Adler.
Kimmie says she was in the dark:
Kim downplayed her shopping sprees, arguing they weren't ``frivolous.'' When asked about buying $21,180 in shoes -- including nearly $5,000 on Oct. 23, 2009 online -- she explained: ``I have very small feet, I have to special order.''
She even went shopping -- at Nordstrom's for shoes -- over the Halloween weekend when news surfaced that her husband's law firm had failed amid the collapse of Rothstein's massive investment racket. She denied that she was aware of the media frenzy surrounding her husband.
SHOPPING SPREES
In the deposition, Kim Rothstein comes across as a woman who filled her days with shopping sprees for herself, friends and relatives while being in the dark about her husband's finances and enterprise.
She said she was unaware of much of her husband's spending -- including a $475,000 Weston home for Villegas or the $250,000 in cash stashed at their Fort Lauderdale home.
``I didn't even have knowledge of half those vehicles,'' she told the lawyers after they read her the list of Ferraris and other luxury cars.
Though Kim and Scott socialized with investors, she said she never overheard them discuss the investments.
When asked if she ever overheard such business conversations between her husband and George Levin -- who along with his Banyon investors sank around $775 million into Rothstein's scheme -- Kim described much more mundane conversations between the two men.
``Bagels, lox, the difference between lox and salmon, and cream cheese consistency, like the stupidest things you could think of,'' she said.
Ok, let me stop Kim right there -- there's nothing "stupid" about discussing the difference between lox and salmon.
In fact, if you add a little whitefish to the conversation, these are topics I can (and have) discussed for hours.
I see that yesterday Judge Stettin served a whole bunch of depo notices for late January and early February on folks such as Ingrid Sahdala, Michael Szafranski, Banyon Investments, LLC, Frank Preve, George Levin, Mark S. Nurik, Esq., Cafe Iguana, Steven Caputi, Michael F. Meldeau, William Brock, Amy Howard, Priscilla (Ludmila) Nasciamento, Irene Stay, and Debra Villegas.
You know, I'd like to see someone put together a Sgt. Pepper-style pastiche of all of those faces, right behind Scott, Stu, Russ and Ringo dressed in colorful Beatles outfits.
But that's just me.
Here is the one he served on Kim Rothstein, compelling her testimony on January 26th.
It seems pretty broad -- documents evidencing "all communications between you and Rothstein."
Hey, they were married, oops I mean are married, right?
1. This 70-lawyer firm only took in $10 million in 2008 and 2009;
2. Kim Rothstein was employed by RRA at a salary of $45k; and
3. This was some wildly f&(ked up place.
You know how lawyers, particularly litigators, pride themselves on being good judges of character? They just know when a witness is not telling the truth, or being evasive, or when something is "not quite right."
Indeed, their self-worth as a lawyer is sometimes bound up with their inflated view of themselves as being able to "put the pieces together," find a seemingly meaningless clue in a document or a stray aside by a witness, and sleuth their way on a hunch, flop sweat, and good detective work to unraveling the key to winning a case.
Why didn't anyone at RRA do that with Scott Rothstein?
Judge Stettin has asked politely, very very politely, to pretty please have access to eight RRA operating accounts that are the subject of Judge Cohn's protective order in the Rothstein criminal case.
The Rule 2004 examination is set for 12/21 (will probably change) but I found the duces tecum to be intriguing:
1. All invoices and all other related documents reflecting jewelry purchased by (i) Scott Rothstein, (ii) Rothstein, Rosenfeldt & Adler, (iii) Kim Rothstein, (iv) any RRA Entity.
For purposes of this category, we seek documents that identify the name of the purchaser, a detailed description of the item purchased, the amount paid for the item and the method of payment which includes copies of checks or credit card slips.
2. All general ledger account entries that list debits and credits for jewelry purchased by any of the foregoing persons or entities listed above.
3. All agreements of any nature between Levinsons and any of the foregoing persons or entities listed above.
4. All e-mails, written memorandum or correspondence exchanged between Levinsons and any of the foregoing persons or entities listed above.
5. All titles to boats owned by Levinsons, Mark or Robin Levinson, or a business entity owned by them directly or indirectly.
6. All checks payable by Levinsons, Mark or Robin Levinson or any business entity owned by them directly or indirectly, paid to (i) Scott Rothstein, (ii) Rothstein, Rosenfeldt & Adler or (iii) any RRA Entity.
I'm sure this means nothing, why should anyone worry?
That complaint is here and is a fun read. God those watches seem dreadful (please don't sue!).
Both cases were voluntarily dismissed shortly after filing, indicating they either settled quickly or were "strike suits" and dropped after having (or not having) their intended effect.
