Author Archives: Tom

It’s the season for youth baseball conflicts

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mr_met.jpgHolland & Knight’s Tampa office has started an interesting area of specialization:

The signs at the New Tampa Little League field are clear: Please practice good sportsmanship at all times.
League officials say one parent has missed the message, and they’ve asked him to leave the park more than once.
But that parent also happens to be a lawyer for one of the largest law firms in Florida. Now he’s alleging that the New Tampa Little League defamed his character in front of parents, friends and clients, and he has hinted strongly at legal action.
Fred Grady, 47, a construction lawyer for Holland & Knight in Tampa, sent league president Monica Wooden a letter on Holland & Knight stationery. The letter, dated June 11, says the league officers’ actions and accusations damaged him. Pursuant to state law, the letter gives Wooden 30 days to send him a copy of the league’s insurance policies and coverage.
That letter capped off a series of e-mail exchanges between Grady and Wooden in which Grady repeatedly asked for a letter of apology from Linda Harrell, a league director who ordered him off the field on April 28. Grady wanted the letter sent to all parents, players and coaches on his son’s team, and he wanted it in time for the end-of-the-season party so he could read it aloud, Wooden said.
“I’m all about principle,” Wooden said. “But I’m not going to patronize some guy who needs something for his self-gratification.”
When Grady didn’t get the letter, he sent Wooden the e-mails.
“If NTLL decides or has decided the Director acted outside of her scope of authority then so be it but that issue will NOT be determined by me, but rather by a judge or jury if this matter proceeds,” said one e-mail bearing Grady’s name.
Another read: “If the NTLL is not prepared to resolve the matter along these lines then I will have no other choice but to take legal action against NTLL and Ms. Harrell individually.”
Grady requested the name of the league’s lawyer: “I assume NTLL does not have LOCAL counsel? Perhaps NTLL should consider retaining a local attorney.”

Read the entire piece. But that rhubarb is nothing compared to this bit of youth baseball sociopathy:

A judge refused to reduce the sentence of a former youth baseball coach convicted of offering a player money to bean a 9-year-old autistic teammate.
Mark Downs Jr., 29, had argued in his appeal that his former attorney wasn’t effective. But Fayette County Judge Ralph Warman ruled Monday that Downs’ arguments were without merit. He let stand Downs’ one- to six-year prison sentence imposed last year.
Downs was convicted of corruption of minors and simple assault for offering $25 to an 8-year-old boy to hit his mildly autistic teammate with a ball while warming up before a June 2005 playoff game. The younger boy testified at trial that, on Downs’ instructions, he purposely threw a ball that hit his teammate in the groin, then threw another that hit him in the ear.
Prosecutors said Downs didn’t want the autistic boy in the game because he didn’t play as well as his teammates. League rules require each player to play at least three innings.

Wow.

The Bershad plea deal

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Milberg%20Weiss_logo%20071207.gifAs expected, former Milberg Weiss partner David Bershad copped a plea deal this week in which he pled guilty to a single count of conspiracy out of the 20 count indictment that he, the law firm and former Milberg partner, Steven G. Schulman, are facing (prior posts here). Bershad also agreed to “give back” $7.75 million (not clear to whom), pay a $250,000 fine, and to cooperate with the governmentís continuing investigation of other Milberg Weiss partners (presumably Mel Weiss) and at least one of its former partners, Bill Lerach. The conspiracy charge carries a maximum penalty of five years in prison, although it is unclear if Bershad will serve any jail time. His sentencing hearing is scheduled for about a year from now, June 23, 2008.
The reaction to the plea deal lit up the blawgosphere. Peter Lattman and Ashby Jones over at the WSJ Law Blog have been following the developments in the case closely (see also here), as has Kevin LaCroix, Peter Henning, and Roger Parloff, among others. This WSJ ($) editorial essentially concludes that the Bershad plea deal means that the case against the firm and the other targets is already over and that we ought to throw away the prison key for the entire bunch.
Count me as not so sure. Given the unpopularity of Lerach and Milberg Weiss generally among a substantial portion of the defense bar and the business community, the WSJ’s rush to embrace the prosecution’s case is not particularly surprising. But as Larry Ribstein has pointed out on numerous occasions, there is an important policy issue here that is easy to overlook in the rush to judgment. Is it wise to allow the government to pay witnesses for testimony so that it can convict Milberg Weiss for paying folks to serve as their lead plaintiffs? Bershad may be as pristine as the driven snow, but the fact of the matter is that he has protested his innocence for years until now. What has changed? Absent a plea deal, Bershad is a 67 year-old attorney facing an effective life prison sentence in a trial before a jury that will likely be hostile toward lawyers in general and rich plaintiffs’ lawyers, in particular. Is it really any surprise that he took the deal? And is it prudent to ruin the careers of the other defendants and targets, and irreparably damage their lives and families, based on the testimony of an admitted liar?
No one is suggesting that Milberg Weiss should get away with paying kickbacks, if that is indeed what happened. But as noted in this earlier post, these payments have been common knowledge for a long time. No opposing party in any of the class actions from which the payments derived ever requested that the federal courts that approved the settlements from which the payments derived disgorge the payments and refer Milberg Weiss to criminal authorities for failing to disclose the payments. Why have these matters been criminalized before that process has occurred? Could it be that the other parties in the class actions didn’t think they had much of a case for disgorgement and referral? If so, what does that say about the criminal case?
Milberg Weiss and Lerach face an imposing enough burden in defending themselves against the overwhelming prosecutorial advantage of the government without the mainstream media deciding that they are guilty before the case is even teed up for trial. Even unpopular lawyers deserve a fair chance. At this point, I’m not sure that Lerach and Milberg Weiss are getting one.
Update: The WSJ’s Law Blog interviews Professor Ribstein on the hypocrisy of the case against Milberg.

If you can’t beat’em on the message boards, then buy’em!

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john-mackey.jpgIn one of those “you just can’t predict everything that comes up in a government investigation” moments, this David Kesmodel and John R. Wilke/WSJ ($) article (free NY Times article here and free WSJ Deal Journal post here) reports that Whole Foods Markets CEO John Mackey has been a longtime pseudonymous contributor to a Yahoo stock-market forum on both Whole Foods and its proposed merger partner, Wild Oats Markets, Inc (prior posts here):

For about eight years until last August, the company confirms, Mr. Mackey posted numerous messages on Yahoo Finance stock forums as Rahodeb. It’s an anagram of Deborah, Mr. Mackey’s wife’s name. Rahodeb cheered Whole Foods’ financial results, trumpeted his gains on the stock and bashed Wild Oats. Rahodeb even defended Mr. Mackey’s haircut when another user poked fun at a photo in the annual report. “I like Mackey’s haircut,” Rahodeb said. “I think he looks cute!”
Mr. Mackey’s online alter ego came to light in a document made public late Tuesday by the Federal Trade Commission in its lawsuit seeking to block the Wild Oats takeover on antitrust grounds. Submitted under seal when the suit was filed in June, the filing included a quotation from the Yahoo site. An FTC footnote said, “As here, Mr. Mackey often posted to Internet sites pseudonymously, often using the name Rahodeb.”

Whole Foods is certainly a different type of place. Somehow, I just can’t envision Jack Welch or Hank Greenberg in their heyday trolling the internet message boards debating the relative merits of their companies. But beyond the public embarrassment to Mackey, the FTC achieves little by “outing” his message board persona. Has the FTC’s case against the Whole Foods-Wild Oats merger really devolved into a personality conflict?

The Declines of the Times

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nytimes-logo.jpgMost folks involved in the blogosphere understand the challenges that the traditional “bricks and mortar” media are facing in attempting to remain competitive in the delivery of information. And most folks who read newspapers regularly recognize that The New York Times is not the newspaper that it used to be. But until I came across this Political Calculations post, I did not realize the depth of the Times’ decline. The substantial declines of both the weekday editions and the Sunday edition of the newspaper indicates that “the Gray Lady is fading into the twilight of its existence. At very least, as we have known it.” Check it out.

More on business golf therapy

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deals%20on%20the%20green.jpgJames Cayne’s golf therapy prompted this interesting article over at The Economist on the deeply engrained nature of business golf:

The central role played by golf in business life is under-reportedóexcept maybe in Japanóperhaps because journalists canít afford the green fees let alone the membership dues of the swanky clubs to which chief executives belong. Nor are bosses exactly rushing to draw attention to yet another perk.
Yet, ìno matter how sophisticated business becomes, nothing can replace the golf course as a communications hubî, argues a new book, ìDeals on the Greenî, by David Rynecki. ìItís where up-and-comers can impress the boss and where CEOs can seal multibillion-dollar deals. Its no coincidence that many of the most admired people in businessóJack Welch, Bill Gates, Warren Buffett, Sandy Weillóalways carved out time in their busy schedules for golf.î
Mr. Welch, arguably the best golfing chief executive ever, is the ìpatron saint of corporate golfî, argues Mr Rynecki, . . . Mr Welch . . . regarded golf as a key part of his managerial armoury, which he deployed with great success during his long, glorious reign at General Electric (GE). The firm was already known as a ìgolf companyî when he took charge. But under Mr Welch, ìgolf became an essential tool for any manager looking to move upî. Golf ìwas a litmus test for character. It showed whether a person had the guts to work in Welchís GE.î
Not everyone is convinced. The other week, two veteran Wall Street tycoons railed against the game. Hank Greenberg, the former boss of AIG, complained that golf was a distraction from business: ìA lot of people like to get away from their work. You have to wonder about whether they like what theyíre doing.î Carl Icahn, the legendary corporate raider, sees golf as a symbol of all that is wrong with the clubby higher echelons of American business: ìThese guys would rather play golf, slap each other on the back. I want a guy running a company who sits in his tub at night thinking about the challenges he faces. The guy who canít let it go. The focused guy.î

Read the entire article. I bet Mr. Cayne will do so, maybe even before his afternoon tee time. ;^)

Spitzer is suffering?

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Spitzer071107.jpgSo New York Governor Eliot Spitzer and his family just don’t know whether the rough and tumble nature of politics at the state level of New York is worth the severe emotional toll.
I wonder what Theodore Sihpol, Hank Greenberg, John Whitehead, Richard Grasso and Kenneth Langone, among others, think about that?

The PGA Tour pro takes on the local muni

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muni%20golf2.jpgWhat do you get when a big golf game is arranged between a young PGA Tour pro and a weekend duffer on the local municipal course?
One of the most interesting golf articles of the year. Check it out.

Threatening to go Arthur Andersen on KPMG

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KPMG070907.gifThis earlier post noted how the shadow of the sad case of Jamie Olis continues to hang over the KPMG tax shelter case in New York, and this post explored how Olis’ defense was financially undermined by the Justice Department’s overt threats to go Arthur Andersen on his employer, Dynegy.
Now, this Lynnlee Browning/NY Times article analyzes evidence that has been generated in the KPMG case about how the Justice Department threatened KPMG with indictment unless it abandoned its policy of paying the defense costs of its partners who had been indicted. It’s a harrowing tale and a stark reminder of how the federal government’s awesome prosecutorial power is being abused to cause job loss and erosion of wealth while ruining careers and damaging families in the process. This is not the product of a truly civil society.

Fiddling while the tofu burns

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wholefoods070907.jpgIt all started with this Holman Jenkins/WSJ column in which he blasted the Federal Trade Commission’s vacuous campaign against the proposed Whole Foods-Wild Oats merger.
That prompted this WSJ letter-to-the-editor from Arnie Celnicker, a former attorney for the FTC and the Antitrust Division of the Justice Department, in which he contends, among other things, that the complexities of markets is such that “[t]he fact that I can now buy organic milk at Wal-Mart tells us something, but very little, about the realistic nature of competition between Whole Foods and Wal-Mart, or about the effect of Whole Foods’ acquisition of Wild Oats.”
Which prompted Don Boudreaux to throw up his hands in exasperation:

How in the name of free-range chicken do these facts justify government blocking this merger? Precisely because consumers now want more and more organic products, financial markets have every incentive to invest in firms catering to this growing market if these firms are well-managed. Wild Oats’ inability to get adequate private financing in this growing market is strong evidence that its assets now are poorly managed. It’s only natural that Whole Foods spots and seizes this opportunity to use these assets more effectively at meeting consumer demands. The FTC’s interference – an unwholesome additive to the market – jeopardizes consumer well-being.

Not to speak of the jeopardy in which the FTC’s interference places the investment of Wild Oats shareholders.

A healthy way to deal with stress

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business%20golf.jpgAccording to this Patrick McGeehan/NY Times article, Bear Stearns chief James E. Cayne had a healthy way to relieve stress during the recent crisis surrounding the demise of two Bear Stearns hedge funds:

The near-meltdown of a hedge fund managed by Bear Stearns does not appear to have interrupted the golfing habits of its chief executive, James E. Cayne.
In the summer, Mr. Cayne routinely hops a helicopter from Manhattan to the Hollywood Golf Club in Ocean Township, N.J., where his pilot has permission to land on the grounds. According to scores posted on an online golf database, he continued to do so through the weeks in June when his firm was struggling to keep one of its mortgage securities funds afloat.
On June 14, the day when Bear Stearns reported a 10 percent drop in its operating earnings for the second quarter, Mr. Cayne played a round and shot a 96, his scores on the online database, GHIN.com, indicate. The next day, a Friday, he played again.
On Thursday, June 21, as several big banks pressured Bear Stearns to increase the collateral on loans they had made to its sinking fund, Mr. Cayne was back on the course. That day, he shot a 98.
The next day, in the biggest rescue of a hedge fund in almost a decade, Bear Stearns pledged to put up $3.2 billion to bail out its fund. (It later said that $1.6 billion would suffice.) Then the remarkably consistent Mr. Cayne played golf, shooting a 97.
Elizabeth Ventura, a spokeswoman for the firm, explained that Mr. Cayne flies down after work on Thursdays and plays an evening round of golf. On Fridays, he plays a round and works from his New Jersey home, where he is in constant touch with the office, she said.

Cayne’s handicap index is 15.9, so his scores during that stressful time certainly ballooned a bit higher than normal. But think how bad this could have gotten for Bear Stearns if Cayne had not been able to get his golf therapy? ;^)