A July 10 article in the Mirror reports (bitterly) that the British government has taken a decision not to reinstate compensation for pleural plaques. The decision follows up on last summer's government Consultation paper available here. The decision apparently will be formally announced this coming week ahead of the July 20 recess date for Parliament. The apparent decision in London stands in marked contrast to Scotland's mistaken decision to legislate to reinstate compensation for pleural plaques, a decision presently under legal attack as described here back in April.
According to the Mirror article, the government in London has made the wise decision not to encourage pleural plaques claiming. Specifically, the government apparently will not pass legislation to overrule the Rothwell decision by the House of Lords. The gist of the Rothwell was the holding that pleural plaques are not compensable because they virtually never cause any physical impairment or pain, and therefore there is no compensable injury. According to the Mirror article, the government will, however, establish an online research center for asbestos-related disease and will pay compensation of £5,000 to about 6,500 persons whose claims predate Rothwell.
According to the Mirror article, unions are unhappy with the decision taken by the government. However, one hopes that on reflection, the unions and their members will appreciate the wisdom of the long-term decision. Why? There are myriad reasons, most of which I described in a detailed paper submitted last fall in opposition to the extreme parts of the proposals set out in the UK government's Consultation paper. Overall, the big picture point is that experience in the US has proven that paying compensation to persons without impairment is bad policy that drains away resources (medical, financial, judicial, and governmental) that should be focused instead on coping with the terrible burdens inflicted by mesothelioma tumors and certain other asbestos-related cancers that tend to arise in some parts of the body for persons with material amounts of work in certain occupations.
Ultimately, the folly of paying compensation to the unimpaired is evidenced by the tidal waves of claims that swamped US courts and asbestos trusts to the point they ceased to provide anything even remotely close to justice for injured persons or corporate defendants, as has been detailed by Professor Lester Brickman, with key excerpts set out in the opposition paper. Ultimately, claiming by the unimpaired became so enormous and costly it rendered the Johns-Manville asbestos trust insolvent more or less on the day it opened its doors, causing it to shut down operations in 1990, two years after it opened in 1988 after 6 years of legal wrangling. Then, after about 5 more years of lawyering, the Manville trust reopened but paying only a tiny fraction of the amounts that would otherwise be available to mesothelioma victims.
For more specifics, read the Manville trust history here on the Manville Trust website. Then read Judge Weinstein's 2009 paper lamenting the reality that the US legal system has done at best a lousy job dealing with mass tort issues. Judge Weinstein's words deserve special heed because he was central to Manville, Agent Orange and other mass tort cases described in his thoughtful paper. Also read the 2005 RAND report that details developments in the US asbestos claiming process. Finally, read through at least some of Professor Lester Brickman's voluminous law review articles and Congressional testimony regarding the disastrous developments in mass asbestos-claiming by unimpaired persons.
The unions and their members also should heed the growing need to focus on cancer because the cancer situation is only going to get worse in the UK for - at least - another decade and perhaps much longer. Specifically, after the UK Consultation was issued last summer and after oppositions to the Consultation were submitted in fall 2008, the case against paying compensation for pleural plaques became even more compelling when a cadre of highly qualified and experienced UK researchers published a landmark medical article further detailing the growing UK epidemic of mesothelioma tumors. The article explains that widespread and long-running use of amphibole asbestos fibers in the UK has resulted in the UK having the highest mesothelioma rate in the world. The conclusions and work of the group, lead by the much-honored Professor Julian Peto, are summarized here, and an online paper is here. The work of the research group is ongoing until at least 2015 - a clinical research description for the ongoing work is here. The citation for the landmark paper and related online paper are:
Rake C, Gilham C, Hatch J, Darnton A, Hodgson J, Peto J. Occupational, domestic and environmental mesothelioma risks in the British population: a case-control study. British Journal of Cancer. 2009;100:1175-1183.
Peto J, Rake C, Gilham C, Hatch J. Occupational, domestic and environmental mesothelioma risks in Britain: a case-control study. Health And Safety Executive Research Report RR696 (2009) published online here.
Saturday, July 11, 2009
Germany Tries to Change D + O Behavior With Limits on D + O Insurance
The D + O Diary, a blog on D + O liability, includes this post about a new German law that seeks to change behavior of corporate officers and directors by imposing 10% of a loss on the individual officers subject to an annual cap. Here's the gist of the law as described by the post:
"Among other things, this new Act will impose a new requirement that German Stock Corporations (Aktiengesetz) purchasing D + O insurance for their executives must impose a personal deductible to be borne by the directors in an amount equivalent to at least 10% of the relevant loss, up to an annual cap. Comments accompanying the Act specify that the annual cap must be set at not less than one and one half the annual fixed remuneration of the director."
The post goes on to cover issues/methods that may come into play if Ds and Os and their companies seek to skirt the new law. In short, an interesting article about an interesting new law, but perhaps the ultimate point is that the article proves that most any government has a heck of a time actually regulating business because lawyers and business persons often can find or create a way to skirt many laws, for better or for worse.
"Among other things, this new Act will impose a new requirement that German Stock Corporations (Aktiengesetz) purchasing D + O insurance for their executives must impose a personal deductible to be borne by the directors in an amount equivalent to at least 10% of the relevant loss, up to an annual cap. Comments accompanying the Act specify that the annual cap must be set at not less than one and one half the annual fixed remuneration of the director."
The post goes on to cover issues/methods that may come into play if Ds and Os and their companies seek to skirt the new law. In short, an interesting article about an interesting new law, but perhaps the ultimate point is that the article proves that most any government has a heck of a time actually regulating business because lawyers and business persons often can find or create a way to skirt many laws, for better or for worse.
Friday, July 10, 2009
No Recession in Fees for Massive Bankruptcies - $ 262 Million to Date for Lehman
Wow - see here for a basic article on the Lehman fees, and here is a link saying that Prof. LoPucki thinks fees may end up at slightly less than $ 1 billion.
Among the fee earners, lawyers are doing well as shown by the exceprt below from an article on Lehman by LAW360 is a subscription service.
http://bankruptcy.law360.com/articles/110521
By Anne Urda
***
Thus far, Lehman has paid the firm an estimated $114 million for its services, which has included Marsal taking over the reins at Lehman and guiding it through the bankruptcy process.
In May and June alone, the firm earned $18 million for the interim management provided, according to the report.
Lead counsel Weil Gotshal & Manges LLP has also raked in an estimated $63 million for the work it has performed on the massive bankruptcy case thus far, with special conflicts counsel Curtis Mallet-Prevost Colt & Mosle LLP collecting an estimated $6 million over the past few months for the work performed, the report revealed.
Milbank Tweed Hadley & McCloy LLP, which serves as lead counsel for the creditors committee, reaped just over $17 million for the hours logged, while court-appointed examiner's lead counsel Jenner & Block LLP has been paid more than $6 million for services rendered so far, according to the report.
Among the fee earners, lawyers are doing well as shown by the exceprt below from an article on Lehman by LAW360 is a subscription service.
http://bankruptcy.law360.com/articles/110521
By Anne Urda
***
Thus far, Lehman has paid the firm an estimated $114 million for its services, which has included Marsal taking over the reins at Lehman and guiding it through the bankruptcy process.
In May and June alone, the firm earned $18 million for the interim management provided, according to the report.
Lead counsel Weil Gotshal & Manges LLP has also raked in an estimated $63 million for the work it has performed on the massive bankruptcy case thus far, with special conflicts counsel Curtis Mallet-Prevost Colt & Mosle LLP collecting an estimated $6 million over the past few months for the work performed, the report revealed.
Milbank Tweed Hadley & McCloy LLP, which serves as lead counsel for the creditors committee, reaped just over $17 million for the hours logged, while court-appointed examiner's lead counsel Jenner & Block LLP has been paid more than $6 million for services rendered so far, according to the report.
The Future of Legal Education in the US ?
An interesting and detailed post here from Empirical Legal Studies on the future of legal education, including recent "radical" but great questions/issues posed by maverick Paul Lippe of Legal Onramp.
Thursday, July 9, 2009
$ 700,000 + per Claimant Expected Payouts for Certain Claimants to An Expected Chapter 11 Asbestos Trust
Updated: Nothing is simple. Some links below are not working to see the underlying documents were uploaded as "pdf packages" instead of simple .pdf files. So, while the link provider figures why a package is a problem at least on some browsers, you may find it easier to see the papers on the free THAN website, which is here. See docket numbers 453 (objection of Waters & Kraus), 454 (Kraus Declaration), 455 (Debtor's response), 456 (Bae declaration), and 457 (Kozen declaration). My apologies for the hassle.
How much money are asbestos claimants obtaining from asbestos bankruptcy trusts ? Unfortunately, different people will give you different answers, and they can sometimes get away with it because most if not all of the asbestos trusts fail to act in a transparent manner. However, some concrete facts about payouts from one trust in formation have now surfaced in papers filed in the Thompson-Hayward asbestos-driven chapter 11 case (commonly known as the THAN case). The papers are especially significant because they include facts about asbestos payments that are set out in a declaration from a credible source - highly successful plaintiff's lawyer Peter Kraus. And, his declaration is backed by confirming emails and spreadsheets. The bottom line, further explained below, is that his declaration and supporting spreadsheets prove significant tort system payments by THAN to Waters + Kraus clients, and that his law firm expects equally large payments for the firm's clients when the THAN trust starts operation. How much? Over $ 700,000, per Waters + Kraus claimant.
How has this information surfaced ? Claimants represented by the Waters + Kraus firm filed with the bankruptcy court late last month a last minute and technically untimely objection to plan confirmation ( I say technically untimely because bankruptcy court deadlines are often absurdly short, and one could very well make that argument here.) The facts about present and expected payments are set out in the Waters + Kraus objection and related papers. The objection already has been denied by Bankruptcy Judge Gerber (yes, the same Bankruptcy Judge Gerber who is hearing the GM case). But, denial of the objection does not change the facts stated in the papers. Meanwhile, Waters + Kraus has filed an appeal to the district court.
What do the papers show about tort system payments? The papers show that the THAN-related entities and Waters + Kraus agree that there was an average tort system payment of at least $ 710,000 per claimant to about 65 mesothelioma claimants represented by the Waters + Krause firm. Why so much ? Mr. Kraus' declaration attributes the average to his firm's zealous investigation of and ability to prove up THAN's history as a seller of asbestos fibers (fyi, THAN also was a maker of Agent Orange). Mr. Kraus' declaration includes supporting spreadsheets listing the claimants represented by his firm by name, along with the 4 digits of their social security numbers. His declaration also includes an interesting form of agreement with respect to solicitation of votes for the prepack.
What do the papers say about payouts from the upcoming THAN trust? read it for yourself, but to me the essence of Mr. Kraus' declaration is the assertion that the Waters + Kraus lawyers agreed to recommend that their asbestos clients vote in favor of the THAN plan based on prepack negotiations in which lawyers for THAN and related entities assured Mr. Kraus that the trust would be created so that payouts to clients of his firm would be on average at least as ample as the tort system payouts.
What are the exact numbers? The papers, indicate a slight disagreement as to the average amount of tort system payments to the 65 claimants. Mr. Kraus asserts that the average payment in the tort system for Waters + Kraus claimants was $ 721,000 per claimant. But, as Mr. Kraus acknowledges, counsel (Mr. Kozen) for an entity known as PENAC (a Phillips Electronics entity) had asserted $ 710,000 as the average, with this modest disagreement apparently never brought to a close.
What other testimony is in the record? Lawyers for THAN (Mr. John Bae) and PENAC (Mr. Michael Kozen) submitted declarations to counter Mr. Kraus' testimony as to exactly how the deal was negotiated and expressed. I commend reading the papers to make your own decision about whether they actually assert a meaningful distinction from the statements of Mr. Kraus. But, plainly their testimony does not take issue with Mr. Kraus' fundamental assertion that he ended the negotiations understanding that the trust is expected to make payments to Waters + Kraus claimants that are consistent with the tort system payments of well more than $ 700,000 per Waters + Kraus claimant. Under the "forthright negotiator" line of reasoning, what he and they knew about the negotiations are relevant facts.
Where are the papers? At least for now, all the papers are available on the free THAN website, which is here, or of course are available through PACER. In addition, copies of some of the papers I thought relevant have been posted to a hopefully permanent spot on the web. Mr. Kraus' Declaration (with exhibits) is here. Briefs and other motion papers are here. And here are the declarations from Messrs. Bae and Rozen.
A future post will provide more on why these numbers are so important in underlying tort cases, and why the numbers and papers provide yet another example of why it is poor policy to allow most if not all of the chapter 11 trusts to operate, as they do now, with virtually no automatic transparency at the claimant by claimant level and with layers of hoops and burdens "baked in to" trust distribution procedures to thwart, delay and increase the expense and difficulty of obtaining meaningful information from the trusts. As always, please bear in mind my continuing disclosure about my work and history to the extent anyone wishes to say they color or inform my statements.
How much money are asbestos claimants obtaining from asbestos bankruptcy trusts ? Unfortunately, different people will give you different answers, and they can sometimes get away with it because most if not all of the asbestos trusts fail to act in a transparent manner. However, some concrete facts about payouts from one trust in formation have now surfaced in papers filed in the Thompson-Hayward asbestos-driven chapter 11 case (commonly known as the THAN case). The papers are especially significant because they include facts about asbestos payments that are set out in a declaration from a credible source - highly successful plaintiff's lawyer Peter Kraus. And, his declaration is backed by confirming emails and spreadsheets. The bottom line, further explained below, is that his declaration and supporting spreadsheets prove significant tort system payments by THAN to Waters + Kraus clients, and that his law firm expects equally large payments for the firm's clients when the THAN trust starts operation. How much? Over $ 700,000, per Waters + Kraus claimant.
How has this information surfaced ? Claimants represented by the Waters + Kraus firm filed with the bankruptcy court late last month a last minute and technically untimely objection to plan confirmation ( I say technically untimely because bankruptcy court deadlines are often absurdly short, and one could very well make that argument here.) The facts about present and expected payments are set out in the Waters + Kraus objection and related papers. The objection already has been denied by Bankruptcy Judge Gerber (yes, the same Bankruptcy Judge Gerber who is hearing the GM case). But, denial of the objection does not change the facts stated in the papers. Meanwhile, Waters + Kraus has filed an appeal to the district court.
What do the papers show about tort system payments? The papers show that the THAN-related entities and Waters + Kraus agree that there was an average tort system payment of at least $ 710,000 per claimant to about 65 mesothelioma claimants represented by the Waters + Krause firm. Why so much ? Mr. Kraus' declaration attributes the average to his firm's zealous investigation of and ability to prove up THAN's history as a seller of asbestos fibers (fyi, THAN also was a maker of Agent Orange). Mr. Kraus' declaration includes supporting spreadsheets listing the claimants represented by his firm by name, along with the 4 digits of their social security numbers. His declaration also includes an interesting form of agreement with respect to solicitation of votes for the prepack.
What do the papers say about payouts from the upcoming THAN trust? read it for yourself, but to me the essence of Mr. Kraus' declaration is the assertion that the Waters + Kraus lawyers agreed to recommend that their asbestos clients vote in favor of the THAN plan based on prepack negotiations in which lawyers for THAN and related entities assured Mr. Kraus that the trust would be created so that payouts to clients of his firm would be on average at least as ample as the tort system payouts.
What are the exact numbers? The papers, indicate a slight disagreement as to the average amount of tort system payments to the 65 claimants. Mr. Kraus asserts that the average payment in the tort system for Waters + Kraus claimants was $ 721,000 per claimant. But, as Mr. Kraus acknowledges, counsel (Mr. Kozen) for an entity known as PENAC (a Phillips Electronics entity) had asserted $ 710,000 as the average, with this modest disagreement apparently never brought to a close.
What other testimony is in the record? Lawyers for THAN (Mr. John Bae) and PENAC (Mr. Michael Kozen) submitted declarations to counter Mr. Kraus' testimony as to exactly how the deal was negotiated and expressed. I commend reading the papers to make your own decision about whether they actually assert a meaningful distinction from the statements of Mr. Kraus. But, plainly their testimony does not take issue with Mr. Kraus' fundamental assertion that he ended the negotiations understanding that the trust is expected to make payments to Waters + Kraus claimants that are consistent with the tort system payments of well more than $ 700,000 per Waters + Kraus claimant. Under the "forthright negotiator" line of reasoning, what he and they knew about the negotiations are relevant facts.
Where are the papers? At least for now, all the papers are available on the free THAN website, which is here, or of course are available through PACER. In addition, copies of some of the papers I thought relevant have been posted to a hopefully permanent spot on the web. Mr. Kraus' Declaration (with exhibits) is here. Briefs and other motion papers are here. And here are the declarations from Messrs. Bae and Rozen.
A future post will provide more on why these numbers are so important in underlying tort cases, and why the numbers and papers provide yet another example of why it is poor policy to allow most if not all of the chapter 11 trusts to operate, as they do now, with virtually no automatic transparency at the claimant by claimant level and with layers of hoops and burdens "baked in to" trust distribution procedures to thwart, delay and increase the expense and difficulty of obtaining meaningful information from the trusts. As always, please bear in mind my continuing disclosure about my work and history to the extent anyone wishes to say they color or inform my statements.
Wednesday, July 8, 2009
GM - Denial of Stay of Asset Sale and Denial of 2d Circuit Direct Appeal - "Equitable Mootness" to Follow and Defeat Appeals ?
Judge Gerber denied a stay of the asset sale and denied a direct appeal to the 2d Circuit; the order is here (Docket No. 3046). Basic news articles are here (WSJ) and here (NYT).
What the news articles do not mention is a bankruptcy appeal doctrine known as the "equitable mootness" doctrine. Under that doctrine, appeals are sometimes dismissed as moot after the relevant bankruptcy event has happened. Here, the relevant event would be the consummation of the upcoming asset sale that Judge Gerber has refised to stay.
For a recent, cogent and free law review article explaining the "equitable mootness" doctrine and why some say it is unconstitutional, go here for a Santa Clara Law Review article by a law student, Katelyn Knight.
There is irony to the current events in GM. Why? Because in various asbestos chapter 11 cases, counsel for asbestos claimants and counsel for futures representatives have argued and used the equitable mootness doctrine as a leverage point to try to shield chapter 11 plans they approved when many, many millions were being set aside for asbestos claimants. Now the equitable mootness doctrine may hit them as a sword. So goes life in litigation where much time is spent trying to dance on both sides of a sharp edge.
What the news articles do not mention is a bankruptcy appeal doctrine known as the "equitable mootness" doctrine. Under that doctrine, appeals are sometimes dismissed as moot after the relevant bankruptcy event has happened. Here, the relevant event would be the consummation of the upcoming asset sale that Judge Gerber has refised to stay.
For a recent, cogent and free law review article explaining the "equitable mootness" doctrine and why some say it is unconstitutional, go here for a Santa Clara Law Review article by a law student, Katelyn Knight.
There is irony to the current events in GM. Why? Because in various asbestos chapter 11 cases, counsel for asbestos claimants and counsel for futures representatives have argued and used the equitable mootness doctrine as a leverage point to try to shield chapter 11 plans they approved when many, many millions were being set aside for asbestos claimants. Now the equitable mootness doctrine may hit them as a sword. So goes life in litigation where much time is spent trying to dance on both sides of a sharp edge.
Aiding & Abetting Investigation - Madoff and Austrian Interests
An Amlaw article here details global government cooperation with respect to potential claims arising from the Madoff ponzi scheme. Accoridng to the article:
"Gerhard Jarosch, spokesman for the Vienna public prosecutor's office, told The Associated Press his office is aiding the U.S. Justice Department and Britain's Serious Fraud Office in separate investigations of Bank Medici AG and its chairwoman, Sonja Kohn."
***
"The Wall Street Journal, citing affidavits filed in the case, reported Friday that prosecutors from all three investigations believe Madoff -- sentenced a week ago to 150 years in prison -- paid Kohn in exchange for allegedly funneling billions of dollars in European investments to Madoff. "
"Gerhard Jarosch, spokesman for the Vienna public prosecutor's office, told The Associated Press his office is aiding the U.S. Justice Department and Britain's Serious Fraud Office in separate investigations of Bank Medici AG and its chairwoman, Sonja Kohn."
***
"The Wall Street Journal, citing affidavits filed in the case, reported Friday that prosecutors from all three investigations believe Madoff -- sentenced a week ago to 150 years in prison -- paid Kohn in exchange for allegedly funneling billions of dollars in European investments to Madoff. "
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