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February 28, 2005
Breakfast with Bill James
Rich Lederer over at the Baseball Analysts posts this first segment in a three part series of his recent interview with Bill James, who is the creator of Sabermetrics, the mathematical and statistical analysis of baseball records. Check out this fascinating interview, which includes such interesting observations as the following:
RL: In the 1979 Abstract, you noted that Rod Carew once swung at two pitches when he was being intentionally walked, trying to get the pitcher to throw him something he could reach. Do you think that is a strategy Barry Bonds could employ today?BJ: I don't know. I would argue about it this way. If it is genuinely advantageous for the defense to intentionally walk Barry Bonds, then logically it has to be defensible for Bonds to swing at one or two pitches to try to negate that advantage and try to tempt them into throwing him a pitch. On the other hand, if hitters never react by swinging at pitches to try to stop the opposing team from intentionally walking them, the implication is that the offense always agrees to accept it even though the defense thinks the walk is helpful, which seems somewhat illogical.
A couple of previous interviews with Mr. James can be reviewed here and here. Mr. James was hired last year by the Red Sox as a consultant and, although he would attribute the Red Sox subsequent World Series Championship as pure coincidence, I'm not so sure. Bill James is one smart cookie on matters relating to baseball.
Update: Here is the second segment of the interview.
Posted by Tom at 6:52 AM | Comments (0) | TrackBack (0)
An evening chat with U.S. Senate candidate Barbara Radnofsky
Greg's Opinion brings us this post in which he describes an evening chat with Vinson & Elkins partner and Democratic Party candidate for U.S. Senator, Barbara Radnofsky of Houston. Barbara is a formidable candidate who will be interesting to watch as her campaign develops. If she can overcome the name recognition hurdle, my sense is that she could give any Republican candidate for the Senate a real run for their money.
Posted by Tom at 6:31 AM | Comments (3) | TrackBack (0)
Is the end of the line near for Foley's?
In a deal that may well be the equivalent of Custer's last stand for department-store retailing, Federated Department Stores Inc. -- the owner of Macy's and Bloomingdale's -- has agreed to buy its longtime and smaller rival May Department Stores Co. for about $11 billion. May is the owner of Houston's venerable chain, Foley's.
Federated will pay about $36 a share in cash and stock, and assume about $6 billion in debt, to buy May, which also owns the Marshall Field's and Lord & Taylor chains. Although the proposed merger will create a huge company of nearly 1,000 department stores, the deal underscores the critical condition of department-store retailing, which has to undergo a transformation to survive in the brutal American retailing market. Big-box retailers such as Wal-Mart Stores Inc. on the low end and upscale stores such as Neiman Marcus Group Inc. on the high end are squeezing the profits of big department chains, which have been losing market share steadily over the past 25 years.
Although Federated operates only one Macy's store in Foley's home base of Houston, divestitures are still expected to occur, particularly in the 94 malls across the nation in which Federated and May both maintain locations. The merger is subject to regulatory approval, which is expected given the deteriorating condition of the department store-retailing sector.
Update: Dylan has interesting inside observations about May in this post.
Posted by Tom at 5:27 AM | Comments (0) | TrackBack (1)
Robert Dawson, RIP
Robert "Mad Dog" Dawson, who taught criminal and juvenile law to a generation of law students at the University of Texas Law School, died Saturday at his farm in Fentress at the age of 65. Although illness forced him to into a motorized scooter in the last few months of his life, Professor Dawson continued to teach his criminal law class at UT until a week and a half ago.
Professor Dawson taught at UT for 30 years and founded the school's Criminal Defense Clinic in 1974. The clinic gives third-year law the opportunity to represent criminal defendants in court under the supervision of UT law professors. Dawson authored the state's juvenile justice laws in 1973 and advised lawmakers on the revision of the Texas Juvenile Justice Code in 1995.
According to his obituary, Professor Dawson's ashes will be mixed with old horse stall bedding and scattered by manure spreader on pastures at the farm. "They will make good fertilizer for the hay crop," he wrote before his death.
Arrangements were pending with Weed-Corley-Fish Funeral Home in Austin. A memorial service is scheduled for 2 p.m. April 2 at UT's LBJ Auditorium.
Posted by Tom at 5:05 AM | Comments (0) | TrackBack (0)
February 27, 2005
Tsunami pictures from the beach
John and Jackie Knill of Vancouver, British Columbia were killed in Khao Lak, Thailand when the December 26, 2004 tsunami struck the resort at which they were vacationing. Afterward, their digital camera was found, and though the camera was destroyed, the photos of the oncoming tsunami on the camera's memory card were salvaged. Check out these spectacular photos.
Posted by Tom at 1:07 PM | Comments (0) | TrackBack (0)
NACDL files amicus brief in Andersen SCOTUS appeal
Here is the amicus curie brief of the National Association of Criminal Defense Lawyers in Arthur Andersen's appeal of its witness tampering conviction to the United States Supreme Court. The NACDL's brief addresses the prejudicial impact that the Andersen conviction will have on the attorney-client relationship, and notes the following in its Summary of the Argument:
This case places lawyers at risk of investigation, prosecution, and imprisonment for doing their jobs. When a lawyer represents a client in connection with a potential government investigation, one of the lawyers goals may appropriately be to prevent the government from developing evidence against the client. Within the bounds of ethics and the law, that is what lawyers do. . .In prosecuting the accounting firm Arthur Andersen LLP (Andersen), the government singled out the conduct of an in-house lawyer, Nancy Temple. Her crime, in the governments view, was providing legal advice even before the SEC had issued a subpoena or launched a formal investigation. Specifically, she reminded Andersen employees to adhere to a lawful, established document retention policy and recommended changes to a draft memorandum actions that lawyers undertake every day. According to several of the jurors, her edits to the draft memorandum were the principal basis for Andersens conviction.
By criminalizing this conduct, the Fifth Circuit disregards the traditional role of lawyers, which includes a duty to protect their clients by deflecting potential government investigations. In the courts view, this goal itself is improper and reflects a corrupt purpose. Any action by the lawyer such as vigorously asserting privileges, counseling potential witnesses about their rights, or, as here, advising employees about a companys document retention policy and editing a draft memorandum can violate the witness tampering statute if it is motivated even in part by this goal. Lawyers in the post-Andersen era now will operate in fear of investigation and prosecution. Those fears inevitably will dampen the zealousness of their advocacy. And that will imperil the fair administration of justice.
If allowed to stand, the decision below also will damage the attorney-client relationship by engendering potential conflicts of interest between lawyers and clients. On every close call regarding tactical and legal issues and on many that are not so close lawyers will have to weigh in the balance their own potential exposure to criminal liability. Yet the fundamental tenet of the attorney-client relationship is that the lawyers commitment to the client must be undiluted by concerns for his or her own personal interests. Moreover, by expanding the governments ability to investigate counsel, the Fifth Circuits decision undermines the communication between attorney and client. If the advice of the Andersen lawyer here amounts to witness tampering, then communications long assumed to be privileged are in jeopardy of disclosure under the crime-fraud exception. Clients who are uncertain of the loyalty of their counsel or the confidentiality of their communications will simply not disclose information their lawyers need to know. That, too, imperils the fair administration of justice.
As a technical aside, neither the Anderson brief nor the NACDL brief in this SCOTUS case are bookmarked or linked in Adobe Acrobat to faciliate ease of review. Get with it, appellate lawyers. As federal courts are increasingly relying on electronic versions of pleadings and briefs, using Adobe Acrobat's bookmarking and linking tools is an easy way to make such documents more reader-friendly. And, a uuu u2 uu ϖĬcc u ϖڿ˟2u ߿ϖ{{cu ooӈӈӈaaĬ ŵ]]]]]]]]]]]]yyڿ˟ ŵd%d%d%d%d%d%yyϖ{{ ŵd%d%d%d%d%d%yyӈӈaa ŵd%d%d%d%d%d%yy]]]]]]]]yy ŵd%d%d%d%d%d%yyd%d%d%d%yy ŵd%d%d%d%d%d%yyd%d%d%d%yy ʹʹʹʹΥΥΥyyd%d%d%d%yy ŵd%d%d%d%d%d%yy ŵd%d%d%d%d%d%yy ʹʹʹʹΥΥΥyy f:RDF xmlns:rdf="http://www.w3.org/1999/02/22-rdf-syntax-ns#" ˺˺˺˺˺˺˺˺ϦϦϦϦϦϦyyyy fferent question
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Would you like to buy a note on a Houston downtown hotel?
There is an old saying among investors and insolvency lawyers that a hotel is such a bad investment that no owner makes any money on it until at least three prior owners have gone bust.
Well, it appears that the City of Houston is about ready to experience the truth of that observation. Following on the news from last week that the downtown Hyatt Regency Hotel has been posted for a foreclosure sale, the Chronicle reports that two other hotels -- The Magnolia downtown and the Crowne Plaza Hotel in the Medical Center -- have defaulted on a total of $15 million in redevelopment loans that the City provided in connection with the recent rehabilitation of the hotels.
It occurs to me that if I were a downtown or Medical Center hotel owner, and the City of Houston had subsidized two competitors of mine with a tax on my business, I'd be rather angry right now.
To make matters worse, the City's loans are not even secured by a first lien on the properties, so the City is not entirely in control of its options resulting from the defaults. The Chronicle article contains all sorts of optimistic statements from City officials and the hotel owners that "they are working through" the problems, but the harsh reality of the situation is that, unless the City wants to get into the downtown hotel business in even a bigger way than it already is with the city government-financed 1,200-room Hilton Americas Hotel, the City's options are limited.
Frankly, the most creative option probably is to convert the City's debt to an equity stake in hotels, install a savvy hotel operator to run the hotels, and take the risk that hotels can at least generate enough money to service the first lien debt on the properties (which, in the case of The Magnolia, may be a shaky proposition). On the other hand, if the City continues to maintain its debt position or hands it off to the federal agency that guarantees a portion of such loans, then the hotels will gradually deteriorate as cash flow is diverted to service the unrealistic debt levels. In that case, the primary purpose of the City's loans in the first place -- to redevelop run down properties -- will be effectively nullified.
The bottom line is that these are two more examples of why the City of Houston should not be in the business of financing redevelopment projects. Indeed, financing redevelopment was one of the rationalizations for this even bigger boondoggle.
Posted by Tom at 6:52 AM | Comments (0) | TrackBack (1)
February 25, 2005
Feds start investigating Krispy Kreme
A couple of weeks ago it was the sale of the corporate jet. This week it's a federal criminal investigation as formerly high-flying retail doughnut franchisor Krispy Kreme Doughnuts, Inc. moved a step closer to what appears to be an inevitable chapter 11 reorganization.
Krispy Kreme announced yesterday that the U.S. attorney for the Southern District of New York had launched an investigation that appears to be focused on the company's franchise repurchases and a profit warning that the company issued in May, 2004. As is typical in such announcements, the the Winston-Salem, N.C.-based company said that the company is "cooperating fully" with the investigation. Here are the previous posts over the past year on Krispy Kreme's mounting troubles.
The investigation deepens the problems facing Krispy Kreme, which is facing a liquidity crisis by the end of March. The company has been struggling with slowing sales and an SEC probe of its accounting practices that began last year. The company is cutting about 25% of its nonstore work force as part of a turnaround plan under Stephen F. Cooper, the Enron restructuring expert who became chief executive at Krispy Kreme in January.
Krispy Kreme stock was trading at $5.36 at the close of New York Stock Exchange composite trading yesterday, leaving the stock at about one-tenth of its peak price in August 2003. The company has also been blasted by multiple shareholder lawsuits over the past several months, which are another reason that chapter 11 appears to be an inevitable part of the company's reorganization.
Posted by Tom at 6:10 AM | Comments (1) | TrackBack (0)
Updating the Yukos case -- Judge Clark dismisses chapter 11 case
U.S. Bankruptcy Judge Letitia Z. Clark dismissed OAO Yukos' controversial chapter 11 case yesterday, concluding that there is inadequate precedent for a major foreign oil company to gain the substantial legal protections of a debtor-in-possession under U.S. bankruptcy law. Here is copy of Judge Clark's Memorandum Opinion and here are the prior posts over the past couple on months on this interesting international case.
Yukos had contended that the U.S. Bankruptcy Court had an adequate basis for jurisdiction over the company because of private American ownership of part of Yukos, two recently-created Texas bank accounts, and the fact that its chief financial officer had recently begun working out of his home in Houston.
Judge Clark's ruling sends Yukos back to the Russian and International civil justice system in an attempt to find a forum for its claims that the Russian government acted illegally in forcing the December auction of Yukos's valuable Yuganskneftegaz ("Yugansk") production unit. Yukos' former owner, Mikhail Khodorkovsky, remains in jail in Russia on fraud and tax evasion charges.
Yesterday's decision also concludes the lawsuits that Yukos filed in the Bankruptcy Court resulting from the auction, including its $20 billion "Hail Mary" against four Russian companies, including the Russian government-owned natural gas company OAO Gazprom and oil company OAO Rosneft. Rosneft purchased the Yukos unit from a shell company that that had won auction for Yugansk.
The dismissal of the Yukos case facilitates the Russian government's probable liquidation of the remainder of Yukos' assets to generate proceeds to pay the balance of Yukos alleged tax debt to the Russian government. Moreover, the Russian government will probably proceed with the merger of Gazprom and Rosneft, which had been put on hold after Yukos' chapter 11 case was filed. That planned merger will raise the Russian government's holding in Gazprom to above 50 percent, which will then allow foreigners to own shares in Gazprom.
Posted by Tom at 5:02 AM | Comments (0) | TrackBack (0)
It's "Go Texan Day!"
Read about this great Houston tradition here. This year's calendar of entertainer performances is here.
Posted by Tom at 4:57 AM | Comments (0) | TrackBack (0)
February 24, 2005
Lay-Skilling criminal trial will start in January 2006
Mary Flood of the Houston Chronicle is reporting that U.S. District Judge Sim Lake has scheduled the criminal trial of former Enron chairman Ken Lay, former CEO Jeff Skilling, and former head accountant Richard Causey to begin on January 17, 2006.
Posted by Tom at 2:44 PM | Comments (0) | TrackBack (0)
Andersen's opening brief in Supreme Court appeal
Here is Arthur Andersen's opening brief in its appeal to the U.S. Supreme Court of the firm's 2002 criminal conviction in connection with the Enron scandal. The following is an excerpt from the brief's Statement of the Case:
This case arises out of the conviction of Arthur Andersen, LLP ("Andersen") for witness tampering. . .For more than a century, it had been settled law that destruction of documents prior to the initiation of judicial or agency proceedings is not obstruction of justice. The Government accordingly sought to circumvent the limits on the crime of obstruction by indicting Anderson for "witness tampering" under 18 U.S.C. 1512, which prohibits attempts to "kill," "threaten," or "corruptly persuade" potential witnesses. In the Government's view, it was perfectly lawful for Anderson's employees to comply with the document retention policy themselves, whatever their motive might be, prior to the start of a proceeding. But it was criminal "corrupt persua[sion]" to urge others to comply with the policy if the request was even partially motivated by an intent to "impede the fact-finding ability" of some possible future investigation. . .
That expansive and illogical interpretation of the statutory language criminalizes common conduct undertaken without any consciousness of wrongdoing. . .
Posted by Tom at 7:05 AM | Comments (0) | TrackBack (0)
The real economics of Hollywood
This Jonathon V. Last-Daily Standard article reviews Edward Jay Epstein's new book, The Big Picture (Random House 2005), which examines the fascinating and ever-changing economics of moviemaking. To give you an idea of what's going on in Hollywood economics, consider this:
In 1947, Hollywood sold 4.7 billion movie tickets. The studios were hugely profitable movie factories.Times have changed. . . Television came to compete with the movies, as did home video. And despite a population boom, movie-going fell out of favor. In 2003, only 1.57 billion tickets were sold, a third the number 56 years earlier, while the real cost of making movies increased some 1,600 percent.
It wasn't just production costs that exploded. Today the average movie costs $4.2 million to distribute and nearly $35 million just to advertise. (The comparable 1947 figures, adjusted for inflation, were $550,000 and $300,000.) Such peripheral costs, Epstein explains, have grown so large that "even if the studios had somehow managed to obtain all their movies for free, they would still have lost money on their American releases."
How did Hollywood respond? Epstein observes that Hollywood transformed itself from a factory for making movies into a clearinghouse for intellectual property, which is at least as profitable as making movies used to be. The result?
The truth is that, even with terrible movies, the studios have to try hard not to make money. In this way, today's Hollywood is very much like the studio system of old. The two business models are so favorable that the quality of the product is beside the point. The difference, of course, is Ѓ |WW h\ uuuuuu uuuuuu uu22 uuuu uu22 uuuu ЗЗcccc uu ЗЗcccc uu ЗЗ22uu ЗЗ22uu ccuu{{{{ ccuu{{{{ ooooԉԉԉԉԉԉaaaa and natural gas the companies have in the ground. Reserve numbe ooooԉԉԉԉԉԉaaaaŭŭ ƶƶ]]]]]]]]]]]]]]]]]]]]]]]]yyyy̠̠ ƶƶ]]]]]]]]]]]]]]]]]]]]]]]]yyyy̠̠ ƶƶd%d%d%d%d%d%d%d%d%d%d%d%yyyyЗЗ{{{{ ƶƶd%d%d%d%d%d%d%d%d%d%d%d%yyyyЗЗ{{{{ ƶƶd%d%d%d%d%d%d%d%d%d%d%d%yyyyԉԉԉԉaaaa ƶƶd%d%d%d%d%d%d%d%d%d%d%d%yyyyԉԉԉԉaaaa ƶia.net/index.php?id=P2437">This post by Tom Mighell over at Inte]]]]]]]]]]]]]]yyyy ƶwww.govtrack.us),]]]]]]]]]]]]]]yyyy ƶƶd%d%d%d%d%d%d%d%d%d%d%d%yyyyd% results of using the method actually mislead investors because ƶd%d%d%d%d%d%d%d%d%d%d%d%yyyyd%d%d%d%d%d%d%d%yyyy ƶƶd%d%d%d%d%d%d%d%d%d%d%d%yyyyd%d%d%d%d%d%d%d%yyyy ƶƶd%d%d%d%d%d%d%d%d%d%d%d%yyyyd%d%d%d%d%d%d%d%yyyy ˺˺˺˺˺˺˺˺ϦϦϦϦϦϦyyyyd%d%d%d%d%d%d%d%yyyy ˺r the House of Representatives and the Senate. Check it out.