Bankruptcy Judge Cristol Laments Loss of Trees Due to Lawyers' "Show of Force"!

Attention bankruptcy lawyers -- you don't need to lug boxes and boxes of documents to court anymore.

They have a thing called a "scanner" which allows you to store said documents on a "laptop" or even an "iPad."

Bankruptcy Judge Cristol recently pointed out the blow-back effect of boxes of documents in the courtroom that remain untouched:

In view of the Court’s findings of fact and conclusions of law, the Court retains jurisdiction to enter such further orders as may be reasonable and just, including whether to sanction the lawyers who tried this case for needlessly killing forests of trees simply to display a show of force in the form of bankers boxes filled with documents. Each side brought about 65 boxes to the trial and did not seem to use more than 2 – maybe 3, at most. Wasteful! The Court believes the planting of 65 trees for each party may be an appropriate sanction, but it will decline to order the sanction at this time.

Judge, I know some nice land in Israel that could use new trees.

(Just no etrogs please -- they taste terrible!)

"Bottle of Wine" Bankruptcy Sanctions Order Upheld!

Boy I remember the days when you could smooth over a dispute with a federal judge simply by delivering a nice bottle of wine and a hand-written note on the judge's doorstep.

Actually, I don't ever remember those days.

Regardless, the 11th has weighed in and affirmed the sanctions order:

Gleason has identified no authority supporting his contention that the First Amendment shields from sanctions an attorney who files an inappropriate and unprofessional pleading and then contacts a presiding judge ex parte with an offer to share a bottle of wine and “privately” resolve their dispute. When an attorney files inappropriate and unprofessional documents, a court may impose sanctions based on its “inherent power to oversee attorneys practicing before it.” Thomas v. Tenneco Packaging Co., 293 F.3d 1306, 1308 (11th Cir. 2002) (upholding a district court’s decision to sanction an attorney who submitted documents containing personal attacks on opposing counsel).

In the present case, the bankruptcy court found that Gleason’s written submissions to the court and sending a judge a bottle of wine with an offer to resolve their differences privately amounted to “sanctionable professional misconduct.”

Oh well,  I hope somebody drank it, a nice bottle of wine is a terrible thing to waste.

(Maybe it was part of the record on appeal?)

Bankruptcy Nerds: This Opinion Could Mean Something to Somebody!

 
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.

So take that sucker off my bucket list!

Kevin Gleason and Judge Olson -- Yes, There's More.

We've reported extensively on the saga involving bankruptcy lawyer Kevin C. Gleason and his unique brand of written advocacy before Bankruptcy Judge John K. Olson.

Well of course Gleason appealed the en banc sanctions order, leading to yet another Order on this topic, this time from Judge Marra:

Based on the Court’s review of the record, the Court concludes that the Bankruptcy Court did not abuse its discretion in sanctioning Mr. Gleason pursuant to its inherent power. The April 18, 2011 Response to Order to Show Cause and May 13, 2011 Supplemental Response demonstrate bad faith on the part of Mr. Gleason, violated his duty as a member of the bar and damaged the reputation of the Court, the judicial system, the legal process and the legal profession.

 Unfortunately for Mr. Gleason, it goes downhill from there......

A Look Inside Ruden's Bankruptcy.

Am Law Daily has a great history and summary of how venerable Ruden McClosky wound up in bankruptcy court, relying in large part on Julie Kay's terrific reporting:

After more than two years of partner defections, layoffs, office closings, and mounting financial difficulties, Ruden McClosky filed for Chapter 11 protection Tuesday in its hometown of Fort Lauderdale.  The firm, which has eight offices in Florida, plans to sell a substantial portion of its assets to Greenspoon Marder, another Fort Lauderdale–based firm, according to sibling publication the Daily Business Review.

Founded in 1959, Ruden McClosky had vociferously denied that it would consider dissolving, even as a flood of lateral departures caused the firm to suffer financially. Ruden McClosky responded to the loss of lawyers by shaking up its leadership and pursuing potential mergers with Cleveland-based Benesch, Friedlander, Coplan & Aronoff over the summer and Greenspoon Marder last month.
Ruden McClosky, which once boasted more than 200 lawyers, was hit hard by the collapse of the Florida real estate market and saw its head count dwindle to its current total of 66 lawyers. In its bankruptcy filing, the firm lists both debts and assets of between $10 million and $50 million.

But the deal was contingent on former partners accepting only 30 percent of their equity payments, an arrangement that has apparently collapsed:

The deal with Greenspoon Marder was contingent on 58 former Ruden McClosky equity partners accepting payouts of 30 percent on $3.5 million in outstanding equity payments, according to DBR. Ruden McClosky had stopped making payments to former partners in January, and many of those same partners faced a Monday deadline to reach a deal on the remaining $3.5 million obligation so that the agreement with Greenspoon Marder could proceed. The sale to Greenspoon Marder was structured as a sale, rather than a merger, so that the successor firm wouldn't acquire any of Ruden McClosky's liabilities, according to a lawyer familiar with the Chapter 11 case.

But the South Florida Business Journal reported Wednesday that the plan to pay dozens of former Ruden McClosky partners had collapsed prior to the firm filing its Chapter 11 petition, and that they would have to file claims with the bankruptcy court in order to recoup what they are owed. Lawrence Gordich, a former Ruden McClosky partner who left the firm last year to open his own shop in Miami, is representing a group of ex-partners in the case. Gordich did not respond to a request for comment.

 You car crash gawkers can see the bankruptcy docket here and the Chapter 11 filing here.

To the Moon, Gleason!

Well, for at least 60 days.

Kevin Gleason Offers Wine as Peace Offering to Bankruptcy Judge Olson.

So it all comes down to this: an apology and a bottle of wine.

What, no flowers?  No chocolate?

And guess what -- those vituperative responses was all borne from frustration:

B. The Responses Are the Product of Frustration.

14. Attorney Gleason’s responses are the product of frustration due in large part to the
Court’s mistaken conclusion that his client had assented, pursuant to an agreed order, to the turnover of his commission to the plan administrator. The proper method to seek redress in such circumstances is to file an appeal, which Attorney Gleason did. During the pendency of the appeal, which was filed on November 4, 2010, the Court issued the Show Cause Order and later submitted the order for publication with Westlaw. This unfortunate turn of events escalated what was initially perceived as a mere legal conflict into something more personal in nature. The Responses, while intentional, do not reflect a dishonest or selfish motive.

I see -- the old "Westlaw-as-provocation" defense.

In other words, the judge should have kept quiet about the whole thing, but he had to go and blab about it to all our neighbors!

Is Local Bankruptcy Bar Too "Understandably Tepid" To Represent Kevin Gleason?

Tepid Bankruptcy Bar

Kevin Gleason has a show cause hearing to worry about in front of Bankruptcy Judge Olson just because of a bunch of words he put on digital paper (and then filed with the Court).

So naturally he reached out to hire an attorney to represent him.

But this was not easy, according to his motion to continue:

Immediately upon receipt of the En Banc Order, I began a search for counsel.

3. The response from attorneys practicing before this Court was understandably tepid.

4. It was suggested that I seek counsel outside of this District, and I immediately reached out to my first choice, the Honorable Francis G. Conrad.

5. Former Judge Conrad is currently of counsel to the firm of Jager Smith, practicing from offices in Manhattan and Boston.

A Big City lawyer, I see.

But Judge Conrad has hip surgery plus rehab coming up, so will Judge Olson reschedule the hearing?

Stay tuned......

Judge Olson Schedules En Banc Show Cause Hearing Against Kevin Gleason.

Olson Gleason En Banc Show Cause

Bankruptcy attorney Kevin Gleason's blistering response to Judge Olson's order to show cause is already legendary, and led to an order by the Judge promising further sanctions.

Well things do not look so good, according to today's order, and may include possible criminal sanctions:

The nature of Attorney Kevin Gleason's April 18, 2011 written response to the court's sua-sponte show-cause order is such that the continued show-cause hearing will be en banc. 

Local Rule 2090-2(B)(1) provides:

Upon order to show cause entered by at least one judge, any attorney appearing before the court may, after 30 days' notice and hearing and for good cause shown, be suspended from practice by the court, reprimanded or otherwise.

The continued show-cause hearing will consider appropriate sanctions under the court's inherent authority for Gleason's November 2, 2010 and April 18, 2011 Rule 9011(b) violations.  The continued show-cause hearing will also address whether the tone and/or content of Gleason's April 18th written response constitutes civil or criminal contempt of this court.  Attorney Kevin Gleason is ordered to appear and articulate cause why civil or criminal  contempt sanctions should not be imposed.

Mark your calendars:  June 16th at 1:30 p.m.

No mention as to whether Mr. Gleason should be taking his toothbrush to this hearing as well.

One Way to Answer an Order to Show Cause.

Gleason Response

Anyone remember SD FL Bankruptcy Judge John K. Olson?

Well on March 31st he entered an order to show cause against Hollywood bankruptcy attorney Kevin C. Gleason, reported at 2011 WL 1355300 (Bankr.S.D.Fla).

Kevin's response is an interesting read, to say the least.

The opening paragraph is a doozy -- so much for mindfulness...

(It would have made a really great first draft!)

To my loyal tipsters -- what happened at the 4/20 hearing?

Judge Olson Recuses!

Judge Olson Recusal Order

Bankruptcy Judge Olson, who previously denied a motion to recuse based on his partner's employment in the bankruptcy group at Ruden McClosky, has now changed his mind and granted a second motion to recuse (although he still thinks he doesn't have to):

 On September 3, 2010, the Defendants filed “Second Motions” seeking my recusal and vacatur of rulings. These “Second Motions” are actually reconsideration motions which do not satisfy reconsideration standards. Nevertheless, for the reasons stated on the record at the hearing conducted October 28, 2010, the Plaintiff believes that recusal and reassignment will be beneficial as a practical matter. I will accordingly recuse myself to speed these adversary proceedings to a more prompt conclusion.

So I guess the Judge is saying that if the plaintiff did not otherwise agreed, the second motion would also have been denied.

Bankruptcy Judge Olson Denies Incendiary Motion To Recuse.

orderdenyingrecusal

Although many tipsters (thank you!) alerted me to this motion to recuse filed before Fort Lauderdale Bankruptcy Judge John K. Olson last week, I was reluctant to blog about it.

To be honest, I still am.

In any event, Judge Olson has now forcefully (in my view, persuasively) addressed the motion on the record.

He held an expedited hearing on the motion Thursday afternoon, and just entered his order denying the recusal request.

The order has a pretty good summary of the alleged grounds, which I won't repeat here, but Judge Olson really gets going when he discusses the type of "disclosure" the movants appear to be requiring of him:

The movants would have me engage in pointless record disclosure at the beginning of every matter in which Ruden McClosky represents a party:

For the record, I am getting married to an attorney who works for the Plaintiff’s firm. He is not involved in this case and recusal is therefore not required under 28 U.S.C. § 455(b)(5)(ii). He is a salaried attorney who has no interest which could be affected such that recusal is not required under 28 U.S.C. § 455(b)(4) or (b)(5)(iii).  This record disclosure is required pursuant to § 455(a) and (e) to avoid any appearance of impropriety, but you are not entitled to withhold waiver because my fiancé’s employment is an insufficient basis for recusal under the case law applying § 455. Please confer outside of my presence and notify my law clerk when you are prepared to give your mandatory record waiver.

And this is no joke. This is quite literally what the movants are asking for. Their misunderstanding of § 455 was painfully betrayed at the August 26th hearing when movants’ counsel forcefully argued that I should recuse myself from any matter in which Ruden McClosky represents a  party. Whether movants’ counsel did not adequately research the case law on this subject, or simply did not digest it, I do not know. But fiery, impassioned oral argument in the face of a glass mountain of precedent, with no acknowledgment of that glass mountain, and no hint at a good faith basis for a change in the law? This is normally sanctionable under Fed. R. Bankr. P. 9011(b). The only reason why sanctions are not warranted here despite this appalling lack of diligence is the “layman perception” rule.

As they say, read the whole thing.

SFL Friday -- A Piece of the Action?

Hi kidzzzz, I was briefly detained by an actual court proceeding but I'm back and wrapping it up.

Congrats to entering an era of 100% Rothstein-free JNC appointments:

The Florida Supreme Court screening committee includes Jay Cohen of the Law Office of Jay Cohen in Fort Lauderdale.

The 3rd District Court of Appeal committee is chaired by Edwin Scales III of Edwin A. Scales III P.A. in Key West and includes Miami attorneys Ramon Abadin of Abadin Cook, Dori Foster-Morales of Elser & Foster-Morales, Juliet Roulhac of Julie Roulhac P.A. and Michael Higer of Higer Lichter & Givner of Aventura.

The 4th District Court of Appeal committee is chaired by Cohen and includes Greg Coleman of Burman Critton Luttier & Coleman in West Palm Beach, Eugene Pettis of Haliczer Pettis & Schwamm in Fort Lauderdale, David Prather of Lytal Reiter Clark Fountain & Williams in West Palm Beach and Lisa Small of Small & Small in Palm Beach.

Big firms and their bankruptcy fee requests are getting renewed scrutiny -- damn the trial lawyers!

And Marc Nurik has room in his briefcase for a few photos:

"We want to pick up those photos,'' Nurik said. "I don't know why his personal photos have to be auctioned off, and I'm going to talk to the trustee about that. His personal items should be returned to him.''

I don't know, I don't believe this issue was addressed anywhere in the Dreier sentencing memo.

I'll go Marc one step further -- I'd like to see an entire civilization formed exclusively upon the Dreier sentencing memo, you know like that classic Star Trek episode "A Piece of the Action," where an entire culture was built upon a book about Chicago mobsters of the 1920s.

Ok, maybe that's where Scott's head was at after all.

Oh well, time to watch cartoons and eat cereal all day, stare at the perfect female face, pour another drink, and of course stick to my diet.

I've always been into having my hands manicured but either way put your hands on something worthwhile this holiday season -- you'll feel better for it.

Have a great weekend!

Barry Mukamal Update!

Face it, you guys can't go more than a few hours without thinking about Barry Mukamal.

I know I can't.

Sometimes it's almost like a weird kismet, I can be walking down the street or having lunch at the Bankers Club, not planning at all to think about Barry, when suddenly -- BOOM -- there he is!

True story -- one time I even thought of Barry while I was windsurfing.

What the hail is it about this guy?

Well, even the 11th Circuit has Barry on its mind, as it entered a pretty interesting order affirming The Power of Barry.

The question before the Court was whether a debtor's efforts to consolidate debt among credit cards constituted a "preferential transfer" or merely bank-to-bank transfers among creditors.

Even though there was not much at stake, Barry as trustee was not about to let that money escape:

The decisions of the Bankruptcy Court and District Court are affirmed. The
transfer of credit card funds to pay Egidi’s debt owed to MBNA now BOA, which
occurred within 90 days of the bankruptcy petition, was a preference subject to
avoidance by the trustee under 11 U.S.C. § 547(b) and were not subject to
earmarking. The trustee was entitled to judgment in his favor in the amount of the
transfer, $16,065.00.

Allow me to translate all that bankruptcy gobblygook: You Don't Mess With The Mukamal.