Daily Archives: January 25, 2006

Judge Monroe tees off on Congress

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bankruptcy3.jpgBased on this decision from earlier this week, it’s pretty clear that U.S. Bankruptcy Judge Frank Monroe of Austin — a former Houstonian — is not pleased with Congress and President Bush over the Bankruptcy Reform Act of 2005 passed by Congress last year (earlier post here, here, here, and here). The following excerpt will give you a flavor for Judge Monroe’s entire opinion:

The Congress of the United States of America passed and the President of the United States of America signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the “Act”). It became fully effective on October 17, 2005. Those responsible for the passing of the Act did all in their power to avoid the proffered input from sitting United States Bankruptcy Judges, various professors of bankruptcy law at distinguished universities, and many professional associations filled with the best of the bankruptcy lawyers in the country as to the perceived flaws in the Act. This is because the parties pushing the passage of the Act had their own agenda. It was apparently an agenda to make more money off the backs of the consumers in this country. It is not surprising, therefore, that the Act has been highly criticized acrosse the country. In this writer’s opinion, to call the Act a “consumer protection” Act is the grossest of misnomers.

Moreover, he’s just getting warmed up in the foregoing passage. Read the whole thing. Steve Jakubowski comments and provides more context here.

Is the noose tightening on Jenkens & Gilchrist?

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jenkens WebLogo.jpgThis NY Times article reports that federal prosecutors are investigating three lawyers of Dallas-based Jenkens & Gilchrist ó Paul Daugerdas, Erwin Mayer and Donna Guerin ó in its widening investigation into questionable tax shelters. Messrs. Daugerdas and Mayer are apparently no longer with the firm, and although Ms. Guerin remains with the firm, she apparently is no longer a partner. Previous posts over the past couple of years on the tax shelter investigation are here, and previous posts Jenkens & Gilchrist’s involvement in the matter are here.
One particularly interesting snippet from the article is that sealed documents in one of the civil lawsuits against Jenkens & Gilchrist apparently reveals that Mr. Daugerdas earned $93 million in fees from 1999 through 2003 designing the tax shelters and providing accompanying opinion letters in support of them. Not surprisingly, that revenue generation made Mr. Daugerdas one of the wealthiest single participants in the tax shelter business. Indeed, the documents apparently establish that the Chicago-based tax practice that Mr. Daugerdas led in the late 1990’s generated $267 million in fees from its work on tax shelters. Of that amount, about a third went to Jenkens & Gilchrist, while the rest went to other partners, including $28 million to Mr. Mayer from 1999 through 2003 and $4 million to Ms. Guerin.
Although the Times article reports that Jenkens & Gilchrist itself is not a target of the investigation and is cooperating with prosecutors, there is little question that the investigation has taken a toll on the firm as it defends itself in more than a dozen lawsuits over its work on tax shelters. As the Times article notes “partners and clients have left the firm [and an] $82 million settlement between Jenkens & Gilchrist and about 1,100 wealthy investors who bought invalid tax shelters using its opinion letters is still awaiting court approval.”

Bonnie De Vany, R.I.P.

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Bonnie DeVany 2006-01-23 08-46-21.jpgArt De Vany is Professor Emeritus of Economics at the University of California – Irvine and maintains a fascinating blog on economics, nutrition, medicine, exercise, baseball and other matters. Over the past year, Art has become one of my favorite bloggers — not only do we share many common interests (previous post here), but it turns out that Art lived in Houston for a time during the early 1980’s while teaching at the University of Houston.
This past Sunday, Art’s beloved wife, Bonnie, died after a long illness. In an extraordinary series of posts over the past several months, Art has chronicled the experience he shared with his wife in dealing with her terminal illness. Art’s loving dedication to understanding the nature of Bonnie’s illness and his tireless efforts to comfort her in dealing with it have been a tremendous source of inspiration for my wife and me. So that you can also be touched by a couple of special people, I pass Art’s posts along to you:

Weepy Relatives and Depression June 7, 2005;
A New Year December 31, 2005;
It’s the Ice Cream January 13, 2006 (my favorite);
An Empty House January 16, 2006;
Permissions January 18, 2006;
Ella G. De Vany, February 7, 1916–January 21, 2006 (Art’s mother) January 22, 2006;
Bonnie De Vany, November 24, 1938–January 22, 2006 January 22, 2006.
Bonnie’s Bravery February 13, 2006

Hug a loved one and say a prayer for Bonnie and Art De Vany.

Want a luxury suite for Super Bowl XL?

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fordfield-corner2.jpgWell, the market for tickets to Super Bowl XL isn’t doing so badly after all (previous post here):

There are 132 suites at Ford Field, ranging considerably in size and price.
TicketsNow.com, which connects ticket buyers and sellers, advertised Monday a 40-person luxury suite on the 40-yard-line for ó are you sitting? ó $261,000. Another Web site priced a box at $315,000. The median home price in the Detroit area last year was about $169,000.

Hat tip to Tyler Cowen for the link.

Are you ready to rumble Enron-style?

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skilling and lay10.jpgAs the scheduled Monday commencement of the criminal trial of former key Enron executives Ken Lay and Jeff Skilling draws nearer, the Chronicle’s Mary Flood — who has spent more time on the frontlines of Enron-related cases than any other reporter — provides this overview of what to expect from the upcoming trial and John Roper follows this earlier Chronicle profile of Mr. Skilling with this article on Mr. Lay’s preprarations for the trial.
Meanwhile, over at the sparring ring where the respective legal teams prepare for battle, it looks as if the Enron Task Force is continuing to have a bit of trouble deciding on what to present to the jury. In a pleading (download here) filed earlier in the week, the Lay-Skilling defense teams reveal that the Task Force is attempting to add about a dozen, previously undisclosed allegations of wrongdoing against Messrs. Lay and Skilling in the week before trial. Such last-minute modifications reflect a prosecution team that is not particularly confident in its case. U.S. District Judge Sim Lake is expected to rule on that matter and other remaining pre-trial issues in a final pre-trial conference tomorrow afternoon.

Houston Pavilions taking shape

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Houston Pavilions.jpgFollowing on this earlier post, the Chronicle’s Nancy Sarnoff reports on the expected announcement today by Houston Pavilions LP that House of Blues Entertainment Inc. will be its first anchor tenant in the $200 million, 700,000 square foot downtown project that hopes to transform three city blocks into an open-air shopping-and-entertainment mall with offices and condominiums. The House of Blues facility is expected to feature a performance hall, restaurant and retail shop covering about 43,000 square feet of the project, which also includes plans for a 134,000-square-foot condominium tower and 200,000 square feet of loft-office space.
The Houston Pavilions is located between the newly revitalized Main Street on one side and the George R. Brown Convention Center on the other near the downtown Foley’s and The Shops at Houston Center shopping mall, so it would appear that developers Geoffrey Jones and William Denton are banking on creating something of a retail district in the area (Mr. Denton developed a similar project in Denver that opened in 1998). To induce the private investment in the project, the City of Houston and Harris County have provided over $13 million in development grants and local officials redrew the boundaries of a tax increment reinvestment zone to include the project.
As is typical of such deals, the project is not without risks. For over a generation now, Houston’s retail and entertainment areas have gravitated away from the downtown area, perhaps best reflected by the Galleria area about seven miles west of downtown. The developers are also counting on notoriously air-conditioning-conditioned Houstonians to choose an outdoor urban experience rather than the indoor suburban outing that has become the norm over the past several decades. Nevertheless, the recent success of similar (albeit smaller) projects in the Houston area is probably making the developers and prospective tenants more bullish on the project.