Southwest Recreational Industries Inc., the Leander, Texas-based maker of the sports field surface AstroTurf, has filed bankruptcy and has requested a Georgia Bankruptcy Court that that it be allowed to liquidate on orderly basis under chapter 11, the Austin American Statesman reports here. SRI’s initial motion to use cash collateral describes a surprisingly highly-leveraged business that essentially choked under a combination of high debt service payments and the costs associated with installing its product. SRI’s initial bankruptcy docket can be reviewed here. Although SRI’s corporate offices are in Leander, Texas (25 miles northwest of Austin), its manufacturing operations are in Georgia where the bankruptcy case was filed.
Monthly Archives: February 2004
Initial Tinkerbell response to Howard Stern: You’re too cheap!
Walt Disney Co. has rejected Comcast‘s initial takeover offer. Inasmuch as Comcast’s offer was low-ball, this is no surprise. However, Comcast will likely sweeten the offer and ultimately Disney’s board will likely be forced to allow shareholders an opportunity to accept a Comcast tender offer. Stay tuned for developments.
Meanwhile, the Wall Street Journal has an excellent editorial (subscription required) today, a part of which points out the following:
Whatever the outcome, Comcast’s bid for Disney shows that the mere threat of takeovers can have benefits. Even if it fends off Comcast, Disney’s board is finally going to have to address the company’s failings.
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Research shows that when shareholders are a dominant management influence, companies do better.
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Our own hope is that Disney’s board lets its bosses — the shareholders — first decide who they want running the company. With that out of the way, Disney can then work on the details of recapturing its former financial glory.
Hey Prof, we may be stupid, but we can read
A Sul Ross State economics professor who criticized his students’ academic competence in an obscure magazine article was surprised to learn that his students (and the local townspeople) actually read the article.
Skilling Conviction no tap in
The Houston Chronicle leads with a story today that the long expected indictment of former Enron CEO Jeff Skilling this week does not mean that the government will have an easy time convicting Mr. Skilling of a crime. The same thought was expressed last week in an earlier post on Mr. Skilling.
Interestingly, although numerous former Enron executives have been indicted, the Enron Task Force has yet to take one of the cases to trial. Indeed, the only Enron-related prosecution to date has been the conviction of corporate defendant Arthur Andersen, which by no means was an easy (or clear cut) victory for the government.
Virtually every Enron-related indictment to date has contained so many alleged offenses that a conviction would lead to a prison sentence of draconian length. Accordingly, rather than risk an extremely long prison sentence after a trial in an environment that is extremely hostile to anyone related to Enron, most of the Enron defendants are electing to cop plea bargains, such as the plea bargain that ex-Enron CFO Andrew Fastow agreed to last month.
The government’s strategy in the Enron criminal cases is at least mildly troubling. The government indicts an individual with so many counts of alleged crimes that the defendant is confronted with the choice of risking trial and the potential of virtual life imprisonment or striking a plea bargain that limits their jail time, but waives valid defenses to the alleged wrongdoing. The government’s job is to indict and convict wrongdoers, not to sledgehammer citizens into copping pleas. I am hopeful that the District Judges involved in the Enron criminal cases (and there are several very good Southern District of Texas Judges involved in these cases) dismiss criminal counts that the government has merely added for leverage purposes and allows the government to proceed to trial only on those counts where there is sufficient evidence that a fact finder could decide that a crime occurred.
Houston Bankruptcy Law News
The Houston Bar Association Bankruptcy Section‘s monthly lunch meeting is tomorrow at 11:30 a.m. in the Houston Club in downtown Houston at 811 Rusk Ave (map here, but takes a while to load). Houston bankruptcy attorneys Preston Towber and Joe Epstein will be giving a talk on practice and procedure relating to involuntary bankruptcy cases.
Also, new Bankruptcy Judge Marvin Isgur (a prior post detailing Judge Isgur’s background is here) will use this luncheon to introduce his new staff to the local attorneys in attendance. Admission cost for the seminar and lunch is $30, payable at the door. If you plan to attend, please call Michelle Pittman at 713.216.4075 to reserve a seat.
Finally, next Tuesday, February 24, the HBA Bankruptcy Section will host a reception for Judge Isgur at 5:30 p.m. in the foyer of The Hobby Center in downtown Houston after Judge Isgur’s formal Investiture ceremony earlier that afternoon. If you plan to attend the reception, please call Ms. Pittman at 713.216.4075 to let her know so that a reasonably accurate head court can be estimated prior to the reception.
Elaine McAnelly is the Chair of the HBA Bankruptcy Section, and Elaine and her staff have been doing a great job coordinating recent events honoring incoming Judge Isgur and retiring Judge Leal. Good work, Elaine!
Back from jury duty
I have returned to the office from jury duty, and I am happy to report that I did not traumatize any young attorneys during voir dire. Mike Mayes, Judge of the 410th District Court of Montgomery County, did a great job greeting the jurors and explaining the importance of citizen juries in our civil justice system. Mike is running for re-election in the Republican Primary, and is well-deserving of any Montgomery County citizen’s vote.
Jury Duty
Blogging will be light at least early tomorrow as I have been called for jury duty in the morning. I look forward to jury duty because it allows me to experience what jurors endure in connection with voir dire and measure how they react to it. It is a valuable learning experience.
The last time I was on jury duty several years ago, the panel was about 50 people for a DWI case. Both the prosecutor and the defense attorney were male, quite young, and neither could have been more than a few years out of law school. The prosecutor’s voir dire was boring and dreadful, and included him asking the patronizing question to a housewife (she had three children) on the panel: “Do you have a job?” Ouch!
At any rate, after the prosecutor finished, the young defense attorney introduced himself and his client, and then launched into the opening of his voir dire:
“The State has accused my client of being a drunk driver. That’s a very serious charge, my client denies it, and we will prove that it is a false charge. However, for some people, it is simply impossible to keep an open mind about a person who has consumed an alcoholic beverage and then driven a car. Out of fairness to my client, to serve on this jury, you need to have an open mind and not already determined that my client is guilty simply because he had a drink before driving his car.”
“So,” the young defense attorney asked the panel. “Do any of you already have a belief as to my client’s guilt or innocence?”
Looking around and seeing no one else responding, I raised my hand.
“Yes,” noted the defense attorney. “Juror number 32. Mr. Kirkendall. Do you have a belief as to my client’s guilt or innocence?”
“Yes I do,” I responded.
“What is it,” asked the defense attorney.
“Your client is innocent,” I observed. “Until proven guilty.”
I don’t know whether it was because the other jurors expected me to say that I could not have an open mind on a DWI case, the prosecutor’s dreadfully boring voir dire, the formality of the courtroom, or a combination of those factors. However, the entire jury panel, the judge, the lawyers, the bailiffs, and the defendant all cracked up laughing over my response. “Thank you, Mr. Kirkendall,” said the judge from the bench, still chuckling. “We all needed that.”
To his credit, the young defense attorney recovered nicely, complimented me for my correct answer to his question, and finished his voir dire quickly. Although the prosecutor laughed at my response to the question, he immediately used one of his peremptory challenges to strike me from the panel.
I promise to behave myself tomorrow. ;^)
Harris County Jurors getting harder to find
The Texas Law Blog points to a Houston Chronicle weekend article that interviews various Harris County judges and attorneys regarding the increased difficulty that courts are having in finding jurors who are willing to follow Texas law in awarding damages in personal injury cases. Many jurors are now advising attorneys and courts during voir dire that they are unwilling to consider awarding damages in regard to certain types of injury such as mental anguish, and some are admitting that they are unwilling to award punitive damages. In the face of intense political debate in Texas regarding tort reform over the past couple of years, the article is more anecdotal evidence that the tide of Harris County public opinion is turning against the awarding of large personal injury damages.
DeLay created PAC under investigation
The NY Times reports that a political action committee ? Texans for a Republican Majority ? that House majority leader Tom DeLay of Houston created is the subject of a grand jury investigation in Austin. The investigation follows a complaint filed with the Travis County District Attorney last year by Texans for Public Justice campaign watchdog group.
According to sources for the Times article, the primary issue in the investigation is whether Texans for a Republican Majority improperly used corporate contributions to help finance the campaigns of more than 20 Republican candidates for the Texas House of Representatives in 2002.
Campaign finance watchdog organizations believe the investigation will affect whether “soft money” ? that is, unlimited contributions from corporations, unions and wealthy individuals ? will become a primary financing source for state and local elections.
Update on Garden Ridge chapter 11 case
Houston-based Garden Ridge has filed its initial operating report in its pending chapter 11 case. Also, the U.S. Trustee has filed its notice of appointment of the Creditors’ Committee in the case. Prior posts regarding the Garden Ridge case may be reviewed here, here and here.