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January 31, 2005
The sad case of Jamie Olis gets even sadder
This Dallas Morning News article reports that the sad case of Jamie Olis, the mid-level Dynegy executive who was sentenced to a 24 year prison sentence last year for attempting to prove his innocence on accounting fraud charges, has taken what can only be described as a punitive turn for the worse:
First he received 24 years in prison for accounting irregularities that got his plea-bargaining boss a five-year sentence. Now Jamie Olis has been moved to a tougher prison, and his wife has e-mailed friends asking for prayers.Mr. Olis, 39, a former midlevel accounting executive at Dynegy Inc., has been transferred from a minimum-security lockup at Bastrop, Texas, to a medium-security prison at Oakdale, La., according to U.S. Bureau of Prisons records.
"He is in a place where prison gangs are a necessary part of day-to-day existence and in a population that includes people who are serving multiple life sentences," Monica Olis wrote in an e-mail to friends.
She has declined to comment to the news media.
Meanwhile, oral argument on Mr. Olis' appeal of his sentence occurred today at the Fifth Circuit Court of Appeals in New Orleans. David Gerger of Houston is representing Mr. Olis in the appeal. Here is the Chronicle story on the oral argument.
According to the Chronicle story, a substantial part of the oral argument was taken up with questions from the panel to the prosecution regarding the evidence of the financial loss that the accounting scam allegedly caused. That is a key issue because U.S. District Judge Sim Lake relied on an absurdly high financial loss figure in calculating Mr. Olis' sentence. As noted in this earlier post, even the government expert on financial loss upon whom Judge Lake primarily relied acknowledged that he did not testify that Project Alpha caused the amount of monetary loss that Judge Lake used in sentencing Mr. Olis
Although Mr. Olis is the poster boy of how the federal sentencing guidelines had run amok and needed to be overturned, the darker story is that the case is an egregious example of failed prosecutorial discretion. The conduct of the Justice Department in this case is shameful and the failure of the current Justice Department leaders to do anything about this miscarriage of justice reflects poorly on the Bush Administration. Here's hoping that the Fifth Circuit uses this opportunity to right a clear wrong.
Posted by Tom at 6:33 PM | Comments (5) | TrackBack (1)
Pam Prestridge, RIP
Pamela Adair Prestridge, a well-known Houston attorney and mediator, died suddenly this past Saturday in Houston.
Pam grew up and was educated in Louisiana, but she came to Houston early in her legal career during the early 1980's where she originally practiced at the old line downtown firm, Hirsch & Westheimer. Over the past decade or so, Pam had been in private practice as a mediator and recently served as a coordinator of Continuing Legal Education for the University of Houston School of Law. Pam was a regular in the Houston Bar Association's hilarious spoof of the legal profession, "Night Court," which is annual production and one of the Houston Bar Association's primary fund raisers.
Pam was a bright light in the Houston legal community and will be sorely missed. Funeral services will be held at 2:00 p.m. Tuesday, February 1, 2005 at Earthman Bellaire Chapel, 6700 Ferris.
Posted by Tom at 8:49 AM | Comments (0) | TrackBack (0)
Monkey see, monkey do
This is very interesting. And funny. Hat tip to Instapundit via Slashdot.
Posted by Tom at 7:46 AM | Comments (0) | TrackBack (0)
Rumbo
This NY Times article examines one of the most closely watched experiments in the publishing industry.
Rumbo (pronounced "ROOM-boh") has started four Spanish-language daily newspapers in Texas in the past year, starting in San Antonio before going to Houston, Austin and the Rio Grande Valley. Here is an earlier Houston Press story on Rumbo de Houston's entry into the local newspaper market.
According to most demographers, Hispanics will become a majority in Texas by 2030 or so and are already the largest ethnic group in several of the state's largest cities. Edward Schumacher Matos is a former Wall Street Journal editor who founded Rumbo last year with Jonathan Friedland, The Journal's former Los Angeles bureau chief. Their business plan is to have Rumbo profitable by late 2007 or early 2008. Their bet is that the state's growing Hispanic population is ready to support a sophisticated daily newspaper in Spanish that mixes coverage of local news and sports with commentary and dispatches from Latin America.
The Hispanic market already supports fast-growing Spanish-language television and radio industries, but Rumbo's Texas venture is clearly the biggest gamble yet that has been placed on the Hispanic demand for daily news in Spanish. Rumbo's combined circulation remains small (just under 100,000 a day), but the venture has already generated a market reaction in each of the markets Rumbo entered in recent months. The English language newspaper in each of those markets has reacted to Rumbo by creating or buying newspapers to compete with Rumbo's tabloids.
As an aside, I am going to be on a panel with Carlos Puig, managing editor of RUMBO de Houston, on February 19 at the Houston Bar Association's annual Law & the Media Seminar that will be discussing ways in which the media can maintain its independence in the face of legal and economic threats to it.
Posted by Tom at 6:44 AM | Comments (3) | TrackBack (0)
Disneywar
First it was the battle to fight off the Comcast bid.
Then, it was the trial of the corporate case of the decade.
Now, it's the book -- Disneywar: The Battle for the Magic Kingdom (Simon & Schuster; 2005) by James B. Stewart, the former Pulitizer Prize winning Wall Street Journal reporter and the author of Den of Thieves, which chronicled the insider trading scandals of the 1980's. According to this NY Times article, Mr. Stewart's new book is not going to be particularly complimentary of Disney CEO, Michael D. Eisner.
Regardless of one's opinion of Mr. Eisner's performance in running Disney from a business standpoint, everyone must concede that he does have a knack for keeping the company in the news.
Alas, yet another epitaph that few CEO's envision: "Kept company in the news."
Posted by Tom at 6:05 AM | Comments (0) | TrackBack (0)
A diplomatic coup?
Texan and U.S. Ambassador to Mexico Tony Garza is engaged to marry María Aramburuzabala, who is reportedly Mexico's richest woman and who is dubbed "the Beer Queen."
Posted by Tom at 5:54 AM | Comments (0) | TrackBack (0)
Big deals brewing
Following on this post from last week, the boards of San Antonio-based SBC Communications Inc. and AT&T Corp. approved a mostly stock deal under which SBC will acquire AT&T for roughly $16 billion.
SBC's board approved the transaction Sunday evening, while AT&T's board approved it just before 1 a.m. Monday. The acquisition remains subject to approval by AT&T's shareholders and regulatory authorities, and is expected to close by the first half of 2006.
The deal would create the nation's largest telecommunications company. The merger will end AT&T's 130-year remarkable run as an independent company, which began with the invention of the telephone.
Meanwhile, the Wall Street Journal ($)is reporting this morning that MetLife Inc. is close to striking a deal for Citigroup Inc.'s Travelers Life & Annuity Co. in a deal that would probably be valued at around $12 billion.
Consolidation within the life insurance industry has been predicted for some time, but the predicted consolidation has not taken place as quickly as many have predicted. If the MetLife-Travelers' deal makes, that could trigger the predicted round of consolidation in the industry. The theory of the MetLife-Travelers' deal is that insurance companies can generate better profit margins by serving larger numbers of customers with essentially the same back-office systems and only incrementally larger sales forces.
Both these deals signal that the markets are coming back to the type of big-scale merger deals that had largely disappeared from the business landscape over the past three years.
Posted by Tom at 5:20 AM | Comments (0) | TrackBack (0)
January 29, 2005
More clear thinking on reforming corporate governance
Following on a thread that involved earlier posts here and here, Professor Ribstein expands in this post on his proposal for reforming corporate governance:
My solution to the problems of corporate governance is to put pressure on managers to distribute excess cash by increasing owner distribution and liquidation rights. Ironically, it is the corporate form's elimination of these partnership-type rights that Margaret Blair argues made modern business possible. I dispute that proposition here. In that article I also argue that thick sophisticated markets have made the giant corporation no longer as important as it once was.You might well ask, if this is such a good idea, why haven�t we seen more of it � e.g., partnership type provisions in corporate charters that mandate distributions? Why not more publicly traded LLCs?
My explanation is that the corporate tax and the �double� tax imposed on corporate distributions reduce owners' incentives to insist on distributions even if requiring distributions would efficiently reduce managerial agency costs, and therefore be value-increasing in the absence of this tax. So I propose eliminating the bias favoring retained earnings inherent in the our current tax system. Firms would then be freer to move toward more efficient governance forms.
Professor Ribstein's focus on the detrimental effects of the double taxation of corporate profits raises an interesting incongruity of the related political issue.
The anti-business crowd rails against removal of the double taxation of corporate profits as an unfair concession to the rich capitalist roaders. However, the retention of corporate profits contributes to corporate blunders (such as HP's acquisition of Compaq) and Enron-type scandals, which the anti-business forces attempt to remedy through bigger government -- that is, shareholder lawsuits in the civil justice system, criminalization of questionable corporate actions in the criminal justice system, and greater governmental control in the regulatory system (i.e., Sarbox).
Thus, the anti-business crowd's opposition to removal of the double taxation on corporate profits has the unintended consequence of promoting bigger businesses and bigger business blunders that, in turn, require bigger government to control. I'm not sure where the anti-business forces want to go with all of this, but my sense is that "bigger in everything" is not the destination that they have in mind.
Also, check out Professor Bainbridge's additional cogent thoughts in this post on corporate governance issues, and also Professor Ribstein's follow up post. Likewise, Professor Bainbridge passes along this site where you can download the papers presented at a conference over the weekend that addressed these and other corporate governance issues. These are great resources.
Posted by Tom at 11:43 AM | Comments (3) | TrackBack (1)
Is it time for Drayton to sell the Stros?
Drayton McLane has done a pretty darn good job of running the Stros. During his tenure, the club has been in the top tier of performance among Major League teams and a consistent playoff participant or contender. Under his tutelage, the club developed a fine minor league system that has produced a number of solid Major League players. Drayton also did a good job of coordinating the approval and construction of a downtown ballpark that has generated attendance records. Although Drayton has made his share of mistakes, he is unquestionably the best owner that the Stros have had in their 40 year existence.
However, as I noted in previous posts here and here, I have suspected for awhile that Drayton is preparing to sell the Stros. Given that Drayton is the best owner in Stros' history, I have not heretofore considered rumors of him thinking about selling the club to be particularly good news. But based on developments over this past off-season, I am beginning to think that it may be time for Drayton to sell the club.
As noted in this earlier post, this off-season began with the resignation of Stros' general manager Gerry Hunsicker. Although I was more measured than some others about Drayton's failure to retain Hunsicker, it's certainly not a feather in one's cap that the best general manager in the club's history decided to move on after the best decade in the club's history.
Then came the ill-fated negotiations with free agent Carlos Beltran. With Hunsicker gone and new GM Tim Purpura just gaining his bearings, Drayton allowed Beltran agent Scott Boras to play him like a fiddle during the negotiations rather than making his best offer up front and then placing a relatively short deadline on Boras to consummate a rich deal or risk losing it. Consequently, when Drayton's initial low-ball offers for Beltran quickly went by the wayside, negotiations dragged on, preventing the Stros from taking care of other business, such as signing cornerstone stars Lance Berkman and Roy Oswalt to long term deals. When Boras gave Drayton only a couple of hours to respond to the Mets' final offer, Drayton was unprepared to play by Boras' rules and Beltran was gone. As noted here and here, the Stros are probably better off without Beltran at the price they would have had to pay for him, but that does not excuse Drayton from mishandling the negotiations in a manner that was detrimental to the club overall.
The first fallout from the mishandling of the Beltran negotiations was felt this week as Berkman and the Stros agreed to a one-year deal to settle Berkman's arbitration case. The failure to lock him up to a long term contract now places the Stros at risk of losing Berkman, who will be a free agent at the end of the upcoming season absent the signing of a new deal. Losing Berkman -- who has been one of the best hitters in the Major League Baseball over the past four seasons -- would be devastating to the Stros, who now will probably have to pay Berkman far more than they would have had to pay him had they not neglected to sign him to a long term deal earlier.
Just to give you an idea of the market for a player of Berkman's caliber, take a look at J.D. Drew, who is a player of roughly Berkman's age and experience, but who is not as durable as Berkman and is not quite as good a hitter as Berkman. Drew recently signed with the Dodgers for $11 million a year over five years. Given that, there is little reason for Berkman to settle for less than $60-$65 million over the same period because, if the Stros aren't willing to pay it, the Rangers almost certainly will. Chronicle sports columnist Richard Justice speculates that the Stros could have locked Berkman up for $30 million over three years as late as last season.
Meanwhile, the Stros remain at impasse with their best pitcher (Oswalt), whose arbitration demand of $7.8 million appears to be a clear winner over the Stros' $6 million offer. Absent the signing of a long term deal with the Stros, Oswalt can become a free agent at the end of the 2006 season.
So, after the best season in the club's history, the Stros now find themselves in turbulent waters. The club's best two players in history -- Bidg and Bags -- are closing in on retirement. The club lost out on its attempt to retain Beltran, who would have been one of the building blocks for the future. Meanwhile, the club's best two young players -- Berkman and Oswalt -- are at risk of being lost in the near future to the free agent market. Although potentially formidable, the club's pitching rotation for this upcoming season will nevertheless rely heavily on a 43 year old superstar (the Rocket), another veteran (Andy Pettitte) who is coming off of elbow surgery, and a converted outfielder (Brandon Backe) who has not yet proved that he can pitch effectively over the course of an entire season.
Thus, Drayton has his work cut out for him in steering the Stros through these turbulent waters. Given his handling of the Hunsicker, Beltran, Berkman and Oswalt situations, my sense is that he may be losing his enthusiasm for doing so. If that is the case, then here's hoping that Drayton sells the club before it is too late for a new owner to solve these quickly accumulating, and increasingly serious, problems.
Posted by Tom at 6:59 AM | Comments (1) | TrackBack (0)
Now, how did that happen again?
In what can only be described as the result of an embarrassing lack of oversight, a grand jury in Williamson County indicted six people yesterday for allegedly being involved in a strikingly simple scam of the state's electricity grid operator, the Electric Reliability Council of Texas ("ERCOT").
The five former top managers and one contractor at ERCOT billed the organization $2 million for work by shell security and computer-contracting companies that the individuals controlled, even though much of the work was not performed. The activities were first detailed last summer in a series of articles by The Dallas Morning News, which prompted questions around the state about whether anyone involved with ERCOT had ever heard of the concept of "financial controls."
All of the indicted individuals joined ERCOT as it grew rapidly in response to the introduction of electric competition in Texas in 2002. ERCOT's mission is to maintain the reliability of the Texas electricity grid and coordinate key pieces of the state's $20 billion deregulated electricity market. The nonprofit organization's $127 million annual budget is generated through mandatory fees paid by electricity customers or their power providers.
A state district judge appointed Texas Attorney General Greg Abbott in November, 2004 as special counsel in the case after the findings of an internal ERCOT investigation were disclosed to the Williamson County district attorney. At the same time, the judge impaneled the special grand jury in Williamson County, where ERCOT has its primary control center. ERCOT's headquarters are in Austin.
In announcing the indictments yesterday, Mr. Abbott said that the case is "far from over" and that additional indictments may be coming down the pike. Indictments make for good publicity, but I'm more interested in the identities of the people in ERCOT management, on the ERCOT Board, and at the Texas Public Utility Commission (ERCOT's regulator) who were asleep at the switch and missed such a simple scam. Funny how those names tend to get lost in the shuffle of indictments.
Posted by Tom at 6:07 AM | Comments (0) | TrackBack (0)
January 28, 2005
What? You mean a board member has to work?
In this earlier post on the corporate case of the decade, it was noted that the outcome of the Disney-Ovitz trial may provide yet another reason for competent businesspersons to avoid serving as independent directors on boards in a business climate that already makes it increasingly difficult to find qualified board members. My own anecdotal experience is that businesspersons are avoiding board membership in droves.
This timely Wall Street Journal ($) article confirms my experience as business leaders converging on Davos, Switzerland this week for the World Economic Forum tell the Journal that they are increasingly saying "no thanks" to serving as independent members on outside boards of public companies:
Such anecdotal evidence is borne out by some hard statistics. In 1997, the chief executives of S&P 500 companies served on average on two outside boards, . . . Today, that number has fallen to an average of less than one, or 0.9%, outside board seats, . . . Until recently, about one in four companies had policies limiting the number of boards their CEOs served on, . . . Today, more than half of companies have such policies, . . .
One of the examples that the article uses for explaining the reasons for declining independent board membership is the experience of Michael D. Capellas, the former Compaq Computer Co. CEO who served on the Dynegy, Inc. board while at the helm of Compaq:
Mr. Capellas's experience on the Dynegy board is a telling example of the changing dynamic of being a board member. While a director from May 2001 to June 2002, he recalls "we met four times a year [and] far less preparation was required. In fact, I would read the material the night before."Today, Mr. Capellas says, "if you are going to be on a board, you have to attend many more board meetings" and the reading material is "much more voluminous." For example, the Dynegy board meets every other month, not counting about two other meetings via telephone, according to the company. What's more, Dynegy's current board members receive annual performance reviews by other board members.
Meanwhile, Mr. Capellas's compensation as a Dynegy board member paled when compared to his salary as Compaq's CEO. As a Dynergy director in 2001, he received an annual retainer of $30,000, plus $1,500 for each board meeting and $1,000 for each committee meeting. The same year, he was paid $3.8 million as Compaq's CEO.
And the risks were increasing. In September 2002, Houston-based Dynegy, among the energy companies caught up in the corporate scandals of recent years, paid $3 million to settle civil charges brought by the U.S. Securities and Exchange Commission over irregular energy trades and some financial transactions that had been used to burnish the company's financial results.
Though no directors were charged by the SEC in the September action, some current and former Dynegy directors have been named in related class-action lawsuits. Mr. Capellas, who quit the company's board three months before the SEC settlement, isn't a defendant in the class-action lawsuits. Since then, Dynegy has almost completely revamped its board, with 10 of its 12 directors joining over the last three years.
Mr. Capellas says he believes he and other Dynegy directors lived up to their responsibilities as board members. "I don't believe there was any lack of preparation," he says. "There were four board meetings scheduled but the board actually met many, many times. It's just that to do the bread-and-butter stuff today, you have a lot more work to do."
It is a sad commmentary on the state of American corporate governance when the main reason for declining board membership is that directors are concerned that they are not going to have the protection of the business judgment rule even after expending an inordinate amount of their time on the board matters.
Posted by Tom at 5:32 AM | Comments (0) | TrackBack (0)
It's Car Show time
Over 600 vehicles will be on display through Super Bowl Sunday on February 6 as the annual Houston Auto Show kicks off today at the Reliant Center convention facility at Reliant Park.
The Auto Show runs from noon through 10:30 p.m. today and next Friday, 10 a.m. through 10:00 p.m. the next two Saturdays, and noon through 7:00 p.m. the next two Sundays. From Monday through Thursday of next week, the show will run from noon to 7:00 p.m.
Tickets are $10.00 for adults (cash only) and children under the age of 12 are admitted free when accompanied by an adult. Tickets are sold only at the Reliant Center Box Office Halls B & D ticket windows, and the ticket windows open 30 minutes prior to show opening. There are no advance sales of tickets.
The Auto Show is always an entertaining affair, and the huge Reliant Center is a comfortable venue for such an exhibition. Check it out.
Posted by Tom at 5:05 AM | Comments (2) | TrackBack (1)
January 27, 2005
Can SBC eat AT&T?
San Antonio-based SBC Communications Inc. is in talks to acquire AT&T Corp., a combination that could create the nation's largest telecommunications company in an industry where companies are feverishly attempting to grow in an effort to keep up with new technologies and competitors.
So, over 20 years after the breakup of Ma Bell, the breakup may be coming full circle. SBC is now the second-largest U.S. regional phone company and one of the three huge telecoms to emerge from the consolidation of the Baby Bells. Although such a deal is fraught with hurdles before it could be consummated, the proposed merger would combine some of the largest pieces of the Ma Bell monopoly that was broken up in 1984. It appears that the primary attraction of the deal is linking SBC's 50 million local-line customers with AT&T's world-largest international fiber network and its large corporate client list.
The deal makes sense for AT&T because it is struggling to compete in the vicious long-distance price wars with MCI and the Baby Bells. Moreover, given AT&T's diminished role in the industry, the Justice Department would be unlikely to try and block such a merger. Probably the biggest industry issue is how other big telecommunications companies such as Verizon and BellSouth will respond, particularly since BellSouth had similar talks with AT&T in 2003 that did not result in a deal.
Posted by Tom at 9:49 AM | Comments (0) | TrackBack (0)
Making Congressional voting transparent
This post by Tom Mighell over at Inter Alia reminded me to pass along GovTrack (www.govtrack.us), a new site that will provide you email notification of up-to-the-minute information about Congress.
GovTrack differentiates itself from other sites devoted to Congress in that it sends users e-mail updates anytime there is activity on legislation that they want to monitor. GovTrack lets users track activity of specific legislators. It can also send updates via RSS, or Real Simple Syndication, which is the most efficient way to organize and review such updates, as well as blog updates. The site collects information from Thomas (thomas.loc.gov), which is the Library of Congress's legislation tracking site, as well as the websites for the House of Representatives and the Senate. Check it out.
Posted by Tom at 8:19 AM | Comments (0) | TrackBack (0)
Ernst settles long pending Bank of New England malpractice claim
Ernst & Young LLP agreed to pay an $84 million settlement two weeks into the ongoing trial of a long pending malpractice lawsuit in Boston over its audit work more than a decade ago for the defunct Bank of New England Corp. Here is an article that set the stage for the trial.
The bank's bankruptcy trustee filed the lawsuit in 1993 accusing Ernst of malpractice, among other claims. The bank's demise was triggered by the January 1990 announcement that it would report more than $1 billion in previously undisclosed losses on bad loans for its 1989 fourth quarter. Just four months earlier, the bank had raised $250 million through a public debt offering. The bank filed a chapter 7 (i.e., a liquidation) bankruptcy case in January 1991.
The settlement is yet another reminder of the litigation pressures that the Big Four accounting firms are currently facing over big business failures. Here are earlier posts on Ernst's other legal problems over the past year.
Posted by Tom at 7:06 AM | Comments (0) | TrackBack (0)
Clear thinking on Social Security reform
The Bush Administration's initiative to reform the Social Security system has been criticized recently as being premature because the system is not really in crisis and there are more pressing fiscal problems, such as reforming the health care finance system. Well, Social Security is clearly not in as bad a shape as say, Medicare, but to put off reforming Social Security for that reason is akin to reasoning that there is no need to tend to that long overdue tune up of the family's better car because it seems to be driving better than the family's clunker.
In this Wall Street Journal ($) Capital column, David Wessel interviews Edward "Ned" Gramlich, a U.S. Federal Reserve governor who chaired the Social Security advisory commission during the Clinton Administration and is the former dean of the University of Michigan's School of Public Policy. Although not enamored of the Bush Administration's initial proposal for reforming Social Security, Mr. Gramlich nevertheless is a strong proponent for Social Security reform now:
I don't think the system is in crisis. But we can make much more desirable changes if they're made early. The problem with waiting until the car is about to go off the road is that our options are constricted. It's hard to make sensible benefit cuts if people have already retired or are close to retirement. It's easier to do if cuts are well-advertised. In the past, we have waited, the benefit system has expanded and we've raised the payroll tax. At some point, we can't do that.
We can do much more sensible things if we act early. But it's hard to generate the requisite urgency when the system is projected to be paying full benefits for the next 40 years or so. I'm not an advocate of the president's general approach, but I have sympathy for arguments that the president's people are making about the wisdom of acting now.
Posted by Tom at 6:40 AM | Comments (2) | TrackBack (0)
The economics of extracting oil & gas
One of the most interesting (and misunderstood) aspects of the energy business is the economics of extracting oil and gas. Those economics not only have much to do with the price that we end up paying for energy, but also the success or failure of investing in a particular exploration project.
In this instructive Wall Street Journal ($) op-ed, Peter Huber and former Reagan administration staffer Mark Mills -- who are authors of the new book, The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy (Basic 2005) -- make an interesting point about why energy prices tend to gyrate from time to time:
Oil prices gyrate and occasionally spike -- both up and down -- not because oil is scarce, but because it's so abundant in places where good government is scarce. Investing $5 billion dollars over five years to build a new tar-sand refinery in Alberta is indeed risky when a second cousin of Osama bin Laden can knock $20 off the price of oil with an idle wave of his hand on any given day in Riyadh.By simply opening up its spigots for a few years, Saudi Arabia could, in short order, force a complete write-off of the huge capital investments in Athabasca and Orinoco. Investing billions in tar-sand refineries is risky not because getting oil out of Alberta is especially difficult or expensive, but because getting oil out of Arabia is so easy and cheap.
Moreover, the authors point out that new technology is having a dynamic impact on the cost of extracting oil and gas:
The cost of oil comes down to the cost of finding, and then lifting or extracting. . . But these costs have been falling, not rising, because imaging technology that lets geologists peer through miles of water and rock improves faster than supplies recede. Many lower-grade deposits require no new looking at all.To pick just one example among many, finding costs are essentially zero for the 3.5 trillion barrels of oil that soak the clay in the Orinoco basin in Venezuela, and the Athabasca tar sands in Alberta, Canada. Yes, that's trillion -- over a century's worth of global supply, at the current 30-billion-barrel-a-year rate of consumption.
Here is the entire piece. Also, Tyler Cowen over at Marginal Revolutions has this comment on Messrs. Huber and Mills' new book.
Posted by Tom at 6:03 AM | Comments (0) | TrackBack (0)
Juror Questionnaire in the Enron Broadband case
This is the questionnaire that prospective jurors in the upcoming Enron Broadband criminal trial will be given. Here are the prior posts on the Broadband case, which is scheduled to crank up on April 1 in Houston before U.S. District Judge Vanessa Gilmore.
Posted by Tom at 5:00 AM | Comments (0) | TrackBack (0)
January 26, 2005
Philip Johnson, RIP
Philip Johnson, the innovative architect whose collaboration with local Houston real estate developer Gerald Hines defined Houston's modern skyline, died Tuesday at the age of 98 in New Canaan, Conn. Mr. Johnson designed many buildings in Houston, including Pennzoil Place, Bank of America Center, Williams Tower, the Gerald Hines College of Architecture Building at the University of Houston, and the Rothko Chapel on the campus of the University of St. Thomas in the Montrose area of Houston, which was discussed in this earlier post.
Posted by Tom at 4:31 PM | Comments (2) | TrackBack (0)
Second Circuit reverses "Super Size Me" lawsuit dismissal
Super Size Me is the Morgan Spurlock documentary that chronicled Spurlock's health as he as he ate nothing but McDonald's food at least three times a day for a month. Although certainly not a balanced treatment of the fast food industry, Super Size Me is quite clever and certainly worth watching. Last week, the film was nominated for an Academy Award in the best Documentary Feature category.
One of the criticisms of Super Size Me was that it was a transparent attempt to promote frivolous lawsuits against the fast food industry, although the onslaught of such litigation has not occurred. Nevertheless, such lawsuits received a glimmer of light yesterday from the Second Circuit Court of Appeals. In this decision, the Second Circuit reinstated part of a highly publicized lawsuit that accused McDonald's of misleading young consumers about the healthiness of its products.
The Second Circuit's decision concluded that the trial judge in the case incorrectly dismissed parts of the lawsuit brought on behalf of two New York children on the grounds that the lawsuit complaint failed to link the children's alleged health problems directly to McDonald's products. For the trial court to dismiss the case on those grounds without a trial, the Second Circuit essentially held that such a ruling could only come in summary judgment proceedings after discovery and presentation of summary judgment evidence. Thus, the decision at least opens the door a crack for the plaintiffs' lawyers to demand in discovery from McDonald's the type of previously secret documents regarding the company's promotion of unhealthy products that ultimately led to a string of multi-billion dollar verdicts against Big Tobacco companies.
John F. Banzhaf III, a George Washington University professor of public-interest law who has advised plaintiffs in the big tobacco cases, is an unpaid adviser to the McDonald's plaintiffs in this case.
Despite McDonald's protestations to the contrary, Super Size Me has already had an effect the way in which McDonald's promotes its menu. In early 2004, McDonald's removed the "super size" option from the menus of its 13,000 U.S. restaurants and it began promoting a new line of premium salads. The company also began promoting milk as an alternative to soft drinks and sliced apples as a substitute for French fries in its famous Happy Meals for children.
I suspect that those apples have not competed particularly well against McDonald's French fries. ;^)
Posted by Tom at 4:18 AM | Comments (0) | TrackBack (0)
January 25, 2005
The end of the imperial CEO?
Don't miss the discussion between the two foremost corporate law experts in the blawgosphere -- Professor Bainbridge and Professor Ribstein (with an update here) -- over the implications to the corporate model of the Hewlett-Packard Co. Board's deliberations over limiting HP CEO (and notorious micro-manager) Carly Fiorina's managerial role in the company. Here is the Wall Street Journal ($) article and a free CNN Money article on the HP Board's discussions.
Professor Bainbridge suggests that the HP Board's actions foreshadow the end of the Imperial CEO era, while Professor Ribstein observes that HP's troubles indicate a fundamental problem with the way in which control decisions are made within the inflexible corporate structure.
Meanwhile, HP shares are flat at $19.95 in morning trading on the New York Stock Exchange. In comparison, HP's closing stock price was $18.22 on May 6, 2002, the day on which the company finalized its merger with Compaq Computer Corp that Ms. Fiorina orchestrated over strenuous opposition from several of HP's longtime directors. Thus, two and a half years after Ms. Fiorina had HP pay $19 billion for Compaq, the market attributes virtually no value to the acquisition.
Given that scoresheet, it appears that HP has succumbed to both an Imperial CEO and a broken business model. In this Wall Street Journal column, Jesse Eisinger essentially says the same thing, and passes along this comment about Ms. Fiorina's performance:
Ms. Fiorina has had more than 2½ years since completing the merger in May 2002 to make it work. But H-P is still stuck in between high-end services provider IBM and master of the PC-as-commodity market Dell."I'm not sure anyone could have pulled this off," says Merrill Lynch analyst Steve Milunovich. "I wouldn't give her a high grade, but I wouldn't call her a disaster."
Alas, few CEOs envision epitaphs reading, "Not Disastrous."
Posted by Tom at 8:56 AM | Comments (0) | TrackBack (1)
PW pays $87.5 million settlement in Safety-Kleen case
Houston business plaintiffs' firm Susman Godfrey recently obtained an $87.5 million settlement from Big Four accounting firm PricewaterhouseCoopers in connection with a negligent misrepresentation claim of over $1 billion that arose from Laidlaw Environmental Services' ill-fated 1999 takover of scandal-ridden Safety-Kleen Corp.
Susman Godfrey represented a syndicate of lenders headed by Toronto Dominion Bank that provided almost $3 billion in financing to Laidlaw in connection with the Safety-Kleen adverse takeover. Shortly after Laidlaw acquired the company, Safety-Kleen filed a chapter 11 case amidst revelations of an internal accounting scandal. As a result of the scandal and Safety-Kleen's reorganization, the value of the bank syndicate's loans declined dramatically.
The banks sued PW and alleged that the loans would not have been made but for the fact that PricewaterhouseCoopers had provided audit reports indicating that Safety Kleen was financially healthy. PricewaterhouseCoopers contended that Safety-Kleen's management had misled it in connection with the audits (former Safety-Kleen executives were sanctioned by the SEC and at least one criminal proceeding arose from the scandal), and that besides, the banks had not relied on the PricewaterhouseCoopers' audits anyway in making the loans to fund the takeover. The case settled on the courthouse steps before trial last October, but the details of the settlement are just now becoming public.
The settlement is interesting in that it was came in mediation after the parties had engaged in a summary jury trial last May, in which the parties engage in a non-binding, streamlined presentation of their cases to a jury, which then gives each side feedback on how the jury would decide the key fact issues in the case. Although not used nearly enough in complex litigation, summary jury trials are an efficient and effective tool for parties involved in such mattrs to assess the risks of proceeding to trial versus a pre-trial settlement.
Posted by Tom at 7:57 AM | Comments (0) | TrackBack (0)
Remembering Johnny
Don't miss former Tonight Show writer Raymond Siller's piece on Johnny Carson in today's Wall Street Journal ($).
Posted by Tom at 3:36 AM | Comments (0) | TrackBack (0)
January 24, 2005
Only in Houston
A decade or so ago, a soliciter from London came over to Houston for the first time in his life to appear in federal court with me on a case that we were handling for a mutual client.
My friend was quite surprised by Houston's huge trees, numerous lakes, bayous, and wildlife, particularly near my home in The Woodlands. He candidly admitted that even most sophisticated Londoners have the misconception that Houston is in the Wild West of movie lore, located in the sagebrush and dusty desert terrain of far West Texas. This Chronicle article won't do much to correct similar misconceptions:
A police officer who struck a runaway horse on a freeway was critically injured early today, authorities say.Several other motorists struck the horse's carcass on Interstate 45 before police could shut down the freeway's northbound lanes.
The injured officer, who was off-duty and driving a personal vehicle, managed to pull over to the side of the freeway after the collision but the top of his car was sheared off by the impact, said David Gutierrez, a Houston Police Department accident investigator.
He said the horse was running southbound in the northbound lanes of I-45, just north of the I-610 loop, when the first collision occurred.
The injured officer, who had to be rescued from his vehicle using the Jaws of Life, was listed in critical condition at Ben Taub General Hospital's trauma center.
It was unknown how the horse got on the roadway.
While investigators were waiting for Harris County animal control officers to remove the horse, several other vehicles struck the carcass.
Posted by Tom at 9:17 AM | Comments (6) | TrackBack (0)
Don't let those facts get in the way of the agenda
As noted in earlier posts here and here, U.S. District Judge Vanessa Gilmore of Houston is currently presiding over a rather ugly criminal case in Houston against against three people accused in the deaths of 19 illegal immigrants who were being smuggled into this country in the back of a blistering hot trailer.
As noted in the earlier posts, Judge Gilmore and the prosecution have not been getting along very well during the course of this prosecution. After Judge Gilmore's earlier threat to hold the prosecutors in contempt of court for failing to divulge internal Justice Department deliberations regarding the decision to seek the death penalty against one of the defendants, the prosecution filed a writ of mandamus (that's like suing the judge) with the Fifth Circuit Court of Appeals requesting the appellate court to order Judge Gilmore, in effect, to quit jacking with the prosecution over communications that are clearly privileged. The Fifth Circuit agreed with the prosecution, and issued this pointy-edged 22 page opinion that, among other things, is clearly a rather sharp rebuke of Judge Gilmore's treatment of the prosecution in the case.
On the heels of that dust-up, the Houston Chronicle ran this editorial last week on the matter that contains so many errors and misleading statements that it is questionable whether the author had even bothered reading the Fifth Circuit's decision before writing the editorial. Kevin Whited over at blogHouston.net dissects the Chron editorial and, in so doing, establishes that the Chron editorial page is certainly not going to allow facts to get in the way of its political agenda.
Posted by Tom at 6:07 AM | Comments (0) | TrackBack (1)
To regulate or not to regulate? That is the question
The New York Times sometimes has trouble sorting out business news items because of its bias in favor of greater government regulation over capitalist roaders.
On one hand, this NY Times Sunday article on the struggling airline industry suggests that perhaps the solution to the industry's problems is to return to the era of regulation in which consumers paid higher prices, but airlines served better food on the flights. The only "experts" in the article quoted in favor of returning to those bygone days of high prices and limited service areas are union representatives, who believe that the higher-paying jobs of the regulation era are the birthright of airline workers. Hardly a mention is made of the fact that such increased regulation would bring increased costs to an industry that certainly doesn't need more of those.
From a consumer standpoint, airline deregulation has been a remarkable success that has resulted in far cheaper prices and much greater service than ever before. Thus, while the Times' premise for the article is that increased regulation could help the struggling airlines and their workers, the better premise would have been the following -- i.e., despite the great success of deregulation, why are so many airlines continuing to struggle and why is it so difficult to put the chronically unprofitable airlines out of their misery?
On the other hand, this Times article notes that an unintended consequence of the increased regulation of public corporations under the Sarbones-Oxley legislation is that an increasing number of public firms are delisting because of the high cost of compliance with the legislation. Thus, as Professor Ribstein notes in this typically insightful post on the same article, "we can add a decline in disclosure as firms delist and withdraw from mandatory disclosure requirements" as further negative consequences of Sarbox.
For most businesses, the primary benefit of going public is the access to cheaper equity capital. Sarbox's increased cost of compliance is effectively making that public equity capital more expensive and less attractive. Business owners don't go public just for the joy of making public disclosures and dealing with class action plaintiffs' lawyers.
Posted by Tom at 4:45 AM | Comments (0) | TrackBack (1)
January 23, 2005
On Bullshit
Harry G. Frankfurt is an emeritus philosophy professor at Princeton, and he has just published a new book, On Bullshit (Princeton 2005). Here is the product description:
Deleted at Professor Frankfurt's request.
Here is a shorter paper by Professor Frankfurt regarding the same subject matter. Hat tip to the Legal Theory Blog for the link to this fascinating analysis of bullshit.
Posted by Tom at 1:01 PM | Comments (0) | TrackBack (0)
Remembering Auschwitz and Dachau
Samuel Pisar is an international lawyer and author Of Blood and Hope (MacMillan 1979), who is probably best known for his advocacy of free trade between the U.S. and Russia. However, Mr. Pisar is also one of the youngest survivors of the Nazi death camps at Auschwitz and Dachau. Don't miss Mr. Pisar's Washington Post op-ed on the 60th anniversary of the liberation of the death camps. Wise words from a gentleman who truly understands the inherent depravity of man.
Posted by Tom at 11:42 AM | Comments (0) | TrackBack (0)
Perot on Perot
This Dallas Morning News article interviews H. Ross Perot, the founder of Electronic Data Systems, the founder and chairman emeritus of Perot Systems Corp., the two-time U.S. presidential candidate, and -- depending on your point of view -- either the Texas legend or the lengendary Texas quack.
The best book on Mr. Perot is Gerald Posner's Citizen Perot (Random House 1996). Although not as good as Posner's definitive Case Closed (Random House 1994) on the John F. Kennedy assassination, Citizen Perot nevertheless provides a generally balanced of one of the most complex, colorful, crafty figures on the American political and business landscape over the last 25 years of the 20th century.
Perot is fascinating from a business standpoint not only because of the billions he made as a pioneer in data processing and Texas real estate, but also because of the millions he lost in naive and ill-fated ventures. Although often a savvy and skillful business operator, Posner's book quotes colleagues who describe Perot as as "squirrelly" and "paranoid." Nevertheless, Perot is not one to allow his critics to gain an advantage, so he made fun of them by dancing in public to Patsy Cline's famous rendition of Willie's Nelson's classic song, Crazy.
In Citizen Perot, Posner does a fine job of delineating Perot's contradictions. One one hand, Perot can be incredibly generous to employees needing medical help, but he was also known for berating loyal workers viciously. During the 1992 Presidential campaign, he criticized the influence of Washington lobbyists, but he hired the best in the lobbying business to help EDS and Perot Systems secure business deals in Texas, Washington, and internationally. Perot promoted an outsider political image, but he exerted tremendous influence upon past presidents and presidential campaigns. One of the most memorable descriptions of Perot came from Posner's interview with Ken Riedlinger, a longtime executive of EDS:
"I like Ross. He saved my life a couple of times. But I also hate Ross. Yet I voted for him. And I would probably go back to work for him tomorrow if he asked."
Other interesting parts of the Perot legacy are his 1979 rescue mission to Iran, his private battles with business and government leaders he considered corrupt, his animosity toward George H.W. Bush, and his paranoid charges of Republican dirty tricks against his daughter during the 1992 campaign. Indeed, Perot's performance during the 1992 Presidential debates -- along with Bill Clinton's formidable debating skills -- made those debates the most entertaining of any since that format was introduced during the 1960 Presidential campaign.
After his second and less successful presidential race in 1996, Perot has all but disappeared from the public scene. He now concentrates on his family, veterans' causes, and "big picture" business projects. Nevertheless, he remains a consummate storyteller, which makes the DMN interview a good read. Check it out.
Posted by Tom at 11:30 AM | Comments (0) | TrackBack (0)
January 22, 2005
Velvel on blogging
Lawrence R. Velvel is the dean of the University of Massachusetts Law School and writes an interesting blog called Velvel on National Affairs. This earlier post referred to one of Dean Velvel's earlier posts relating to the plagiarism scandal at Harvard Law School.
In this recent post, in the course of complimenting this Joseph Ellis op-ed regarding what George Washington would recommend as goals for the Bush Administration's second term, Deal Velvel provides one of the most insightful descriptions of the power of blogging that I have seen:
Frankly speaking, I assume -- I don’t know this, but am assuming it -- that the column got into the papers in the same way that the book and newspaper industries normally work together. That is to say, to flog sales publicists at big name publishers ask big name newspapers to carry a column by a big name author relating to the subject of a new book the author wrote. Because the publisher and the author are big names, the big name newspaper agrees. This typical arrangement is symptomatic of the symbiotic elephantiasis which exists everywhere in this nation and is ruining the country: It is typical of the fact that, in every walk of life, only the huge in size, huge in money, huge in reputation, and/or huge in connections can really get anywhere.This fact, incidentally, is one of the reasons for the rise of the poor man’s printing press called The Internet, which gives a small opening to people who are otherwise shut out regardless of competence -- just as, conversely, others are insiders regardless of competence.
Posted by Tom at 11:19 AM | Comments (0) | TrackBack (0)
The risks of the Texas-Mexico border
This Washington Post article reports on a troubling development that many Texans prefer to ignore -- that is, the increasing number of missing persons who are being abducted in the Mexican border towns along the border of Texas and Mexico.
21 U.S. citizens have been kidnapped or disappeared between August and December of last year. Of those 21, nine were later released, two were killed, and 10 remain missing. Moreover, law enforcement officials report an alarming rate of kidnappings that are occurring across Mexico, including what are dubbed "express" kidnappings that are performed for "quick cash" ransoms.
The Rio Grande Valley of Texas -- or "the Valley" as Texans call it -- has always been a fascinating and troubling part of Texan culture. Larry McMurtry portrayed the late 19th century version of the area brilliantly in his Pulitzer Prize winning novel, Lonesome Dove, which was made into one of the best television mini-series of all time in 1989 with Robert Duvall and Tommie Lee Jones in the main roles. Filmmaker John Sayles provides an equally remarkable portrayal of the area during the 1950's and 1980's in his fine 1996 film, Lone Star, which includes Valley native Kris Kristofferson in the flat out best performance of his acting career. The area is among the lowest in terms of per capita income in the United States, yet even that chronically depressed economy is a fantasy of riches for many of those living in the poverty of the teeming Mexican border towns.
The region's problems are complex and difficult, which makes the area prone to being ignored. The increased violence of late is the natural result of such neglect, and the usual response to such spikes in violence along the border -- i.e., heightened law enforcement -- is only a short term solution that often contributes to the animus that many of the Hispanic citizens of the area have toward the state. The area is desperate for leadership and a vision for solving its problems, yet those intractable problems tend to repel those in government who are in a position to do something about them. In short, the Valley needs statesmen, which are in short supply in the polarized American political landscape of the early 21st century.
Posted by Tom at 7:21 AM | Comments (0) | TrackBack (0)
The real reason for the Jenn-Brad split
There just had to be more to the breakdown in the Jennifer Aniston-Brad Pitt marriage than the MSM has been reporting. This Watley Review piece reveals the true reason for the breakup:
"Brad's always been a fan of Wittgenstein," confided Hanson Terrell, an assistant at the Plan B production company co-owned by the pair. "You know, kind of abstract, more focused on issues of language and so on. Jennifer, on the other hand, is a pure Karl Popper fan, all pragmatism. It's kind of amazing they got married in the first place.""She felt Brad was screwing around with her, that when he stared into space at the beach he wasn't resolving apparent paradoxes through analyzing their phrasing, but instead checking out the brunette in the thong," said gossip columnist Mark Lisanti of The Defamer.
Posted by Tom at 6:57 AM | Comments (1) | TrackBack (0)
January 21, 2005
ACLU quandry
This NY Times article reports on an interesting struggle that is developing within the American Civil Liberties Union board of directors.
I wonder whether the ACLU will represent the board members against the ACLU in protesting the ACLU's attempt to chill their free speech rights? ;^)
Posted by Tom at 7:22 AM | Comments (0) | TrackBack (0)
Brobeck Trustee sues firm's former partners
This Law.com article reports on the avoidance lawsuits that the bankruptcy trustee of the former high tech law firm Brobeck, Phleger & Harrison is filing against the firm's former partners for bonuses and a portion of the firm's unpaid bank debt.
The key issues in pursuing former Brobck partners is when the firm became insolvent and whether partners took money out of the firm for inadequate consideration. Under the California Corporations Code, limited liability partnerships may make distributions to partners only when the total assets of the firm exceed liabilities.
The trustee contends that Brobeck's income began to decline in 2000, a decline that accelerated during the second half of that year and continued until the firm tanked in September, 2003. Although Brobeck's net per-partner income dropped to $245,000 for 2002, the trustee contends that Brobeck's partners did not correspondingly reduce the distributions they received.
According to the trustee, in 2001 and 2002 alone, Brobeck's partners spent more than $100 million more than the firm's net income on partner distributions and leasehold improvements. Brobeck financed these excess distributions through debt, which increased from $34 million and $173,000 per partner in 2000 to $89 million and $505,000 per partner in 2002. In particular, the trustee asserts that Brobeck borrowed an additional $39 million on its credit line in the first quarter of 2002 and distributed over $43 million to its partners during the same time period.
Posted by Tom at 6:40 AM | Comments (0) | TrackBack (0)
Noonan and Ignatius on the Inauguration
Following Paul Gigot's thoughts in this post from yesterday, Peggy Noonan writes this Opinion Journal op-ed today regarding President Bush's Inaugural speech, in which she observes the following:
There were moments of eloquence: "America will not pretend that jailed dissidents prefer their chains, or that women welcome humiliation and servitude, or that any human being aspires to live at the mercy of bullies." "We do not accept the existence of permanent tyranny because we do not accept the possibility of permanent slavery." And, to the young people of our country, "You have seen that life is fragile, and evil is real, and courage triumphs." They have, since 9/11, seen exactly that.And yet such promising moments were followed by this, the ending of the speech. "Renewed in our strength -- tested, but not weary -- we are ready for the greatest achievements in the history of freedom."
This is -- how else to put it? -- over the top. It is the kind of sentence that makes you wonder if this White House did not, in the preparation period, have a case of what I have called in the past "mission inebriation." A sense that there are few legitimate boundaries to the desires born in the goodness of their good hearts.
One wonders if they shouldn't ease up, calm down, breathe deep, get more securely grounded. The most moving speeches summon us to the cause of what is actually possible. Perfection in the life of man on earth is not.
Along the same lines, David Ignatius of the Washington Post observes in this op-ed:
The late congressman Phil Burton of California used to say that government officials got in trouble when they began to believe that all the show and pomp of Washington was "for real." By that, he meant that officials were led astray when they began to think it was about themselves and their party rather than the nation. That delusion is especially easy in a second term, after four years in the adulatory echo chamber of the capital. Just ask survivors of the Nixon administration.
Posted by Tom at 5:51 AM | Comments (0) | TrackBack (0)
Updating the Yukos case -- Judge Clark postpones Yukos discovery
U.S. Bankruptcy Judge Leticia Clark denied OAO Yukos' request Thursday to commence discovery in regard to its claims for damages against several international financial institutions and Russian entities pending a February 16th hearing on OAO Gazprom's motion to dismiss the Yukos chapter 11 case in Houston for lack of jurisdiction. Here are the previous posts on the Yukos saga.
Although the MSM heralds the decision as a setback to Yukos, it's really not. Judge Clark recognizes that it is inefficient to allow expensive discovery to commence before she has decided whether the Bankruptcy Court has jurisdiction over the Yukos case. There will be plenty of time for discovery if she decides that Yukos' chapter 11 case can move forward in the American bankruptcy system.
That's really the big issue in the case -- i.e., whether the acceptance of Western investment capital by Russian business interests will bring with it the corresponding risk of having such capital protected in the American civil justice and bankruptcy systems? If Judge Clark rules in favor of Yukos on that issue, how long will it be before the Russian government is hiring lobbyists to support Republican Congressional initiatives for tort and bankruptcy reform?
Posted by Tom at 5:11 AM | Comments (0) | TrackBack (0)
January 20, 2005
Cert petition filed in Roe v. Wade case
As noted in this previous posts, Norma McCorvey of Dallas, the original plaintiff in the seminal anti-abortion case Roe v. Wade, has been attempting over the past couple of years to persuade the federal courts to allow her to challenge the original judgment in that case under Fed. R. Civ. P. 60(b). In this opinion from last year, the Fifth Circuit Court of Appeals upheld the District Court's rejection of Ms. McCorvey's Rule 60(b) motion on procedural grounds and dismissed the case, although Fifth Circuit Judge Edith Jones' concurring opinion did address some of the substantive issues pertaining to the underlying case.
Now, as noted in this AP article, Ms. McCorvey has asked the U.S. Supreme Court to reverse the lower courts and direct the District Court to grant her Rule 60(b) motion. Here is a link to the cert petition, courtesy of the excellent SCOTUSblog.
Due to the procedural nature of the challenge to Roe v. Wade, my sense is that the cert petition does not have much of a chance of success at the Supreme Court. Nevertheless, stay tuned. Stranger things have happened.
Posted by Tom at 8:12 AM | Comments (0) | TrackBack (0)
The Martha Redemption?
In Frank Darabont's wonderful movie,