Daily Archives: April 24, 2006

Stephen Cooper’s big payday

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cooper2.jpgThis earlier post (also see here) noted the wrangling that had developed in the Enron bankruptcy case in New York over former Enron chapter 11 CEO Stephen Cooper‘s $25 million “success fee” request. That success fee, mind you, was on top of over $100 million that Cooper’s firm had already made in providing debtor-in-possession management services to Enron.
Well, as the thorough Steve Jakubowski reports here, Cooper’s proposed compromise of a $12.5 million success fee was approved late last week by the Enron Bankruptcy Judge, Arthur Gonzalez.
Not bad work if you can get it. But still no word yet from Lynn LoPucki.

A potentially Sharp tax on lawyers

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business taxes.jpgFlying somewhat beneath the radar screen of a Houston business community that is preoccupied by the corporate criminal case of the decade is a new proposed state tax on earnings of partners that exceeds $300,000 a year (are you listening, law firm partners?).
This Ft. Worth Star-Telegram editorial surveys the political landscape regarding the proposed tax, which has been proposed by the so-called Sharp Commission, the special tax reform commission that former state comptroller John Sharp chaired. The proposed tax is part of a legislative effort to meet a June, 2006 deadline to fix the stateís funding system for schools and — as you might expect — more than a few law firms are opposing it.
Among other things, the Star-Telegram editorial notes that opponents are contending that the tax is unconstitutional because the Texas Constitution contains a 1993 amendment that specifically prohibits any ìtax on the net incomes of natural persons, including a personís share of partnership and unincorporated association incomeî without approval by voters in a statewide referendum.

Enron point and counterpoint

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ken lay24.jpgAs former Enron chairman and CEO Ken Lay prepares to take the stand today in Week Thirteen of the corporate criminal case of the decade, I wanted to pass along an interesting exchange of posts from this past week.
This previous post noted this Jim Johnston/Paul Fisher Heartland Institute article that questions the demonization of Enron generally and the validity of the Lay-Skilling prosecution, in particular.
Chronicle business columnist Loren Steffy, who has believed for a long time that the book should be thrown at Lay and Skilling, responded to the Johnston-Fisher piece in this blog post.
In this follow-up post on the Heartland blog, Johnston replies to Steffy’s post and concludes by making the point that the type of innovative risk taking that Enron engaged in is often necessary for the creation of new markets, wealth and jobs:

I am glad to hear that the establishment of a once vibrant risk management system for natural gas is not just chopped liver in Mr. Steffyís opinion. The failed attempts with broadband, water and more importantly electricity, were good attempts and much was learned from the efforts. Maybe someday markets will be established in broadband and water. Electricity markets are even now recovering. It will take entrepreneurial companies with sizable assets to reestablish these markets. These companies will also have to watch out for the politicians.

These companies will need to watch out for the prosecutors, too!

Appleby wins SHO in a cakewalk

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Stuart Appleby led from wire-to-wire in winning his second Shell Houston Open golf tournament Sunday at the new Tournament Course at Redstone Golf Club. The final leaderboard is here, local golf writer Ed Fowler’s report on the tournament is here, and GolfWorld senior columnist John Hawkins’ analysis of Appleby’s remarkable performance is here.
Appleby lapped the rest of the SHO field as his 19-under-par performance was six shots better than second-place finisher, University of Texas alum Bob Estes. Appleby posted seven birdies in his closing round as he shot 66-67-69-67 for the tournament on the par-72, 7,500 yard Tournament Course layout. Inasmuch as the tournament was played under near-perfect weather conditions, the field scored well on the new course — better than two thirds of the 70-player field on the final two days finished under par.
On a personal note, Houston clearly has a special place in Appleby’s heart. His first win at the SHO came in 2002, about a year after his wife, Renay, had been hit by a car at the airport in London and killed. Everyone at that tournament will recall the tears in Appleby’s eyes as he accepted the trophy and spoke of carrying on. He has since remarried, is now the proud father of a 1-year-old daughter and is enjoying his best season on the PGA Tour.
The verdict on the new Tournament Course — the foundation of the SHO’s effort to elevate its presence on the PGA Tour — was decidedly mixed. The tree-lined course looked gorgeous on television and several players in the field complimented the design over the weekend. Jesper Parnevik, playing in his first Shell Houston Open, shot a 71 Sunday to shoot a one-under par 287 for the tournament, liked the course:

ìI think it was very nice for a brand new golf course. Thereís no funkiness about it. Very fair.”

Parnevik also thinks the move to a new date next year the week before The Masters Tournament will help the SHO:

“It seems like Phil [Mickelson is] going to be here. Thereís pros and cons playing the week before a major. Some guys love to play. A guy like Tiger never plays. I think itís going to be a fairly good field. I like to play before the majors. The only thing about Atlanta is you could drive to Augusta. Now you have a 2 Ω-hour flight.”

That won’t be much of a problem as I’m reasonably sure that the SHO will charter a flight after the tournament next year to transport those players who are playing in The Masters directly from Houston to Augusta. Second-place finisher Estes also thinks the SHO field will improve with the new date:

ìOverall, itís going to help. Youíll get a lot more foreign players. Youíll definitely have a stronger field and get more of the top players.î

A couple of other players expressed optimism that the Tournament Course will help players prepare for Augusta:

ìI think itís a nice warmup for the Masters,î said Ted Purdy. ìWith the big greens (here), Iím sure theyíll be in perfect condition. Itís a very similar green design, with the big undulations. It will be fun for Houston to have a lot more of the international players here. I think youíre going to have a real strong field.î

ìIf they can find a way to get the greens good and fast, with the undulations, I think they can draw a good field here,î said Lucas Glover. ìTheyíll have to find a way to get the greens fast so everyone will want to come before the Masters. This is as good a tuneup for the Masters as anything because of the iron shots, hitting it into the right areas on the greens.î

However, a couple of key players — neither of whom played particularly well on the new course — expressed reservations about coming back next year:

“The golf course did not grow on me,” said three-time SHO winner Vijay Singh, who shot 2-under for the tournament. “Normally the more you play one, the more it grows on you. For some reason, it didn’t do that. I hope they go back to the old golf course next year. I think a lot of the players feel the same way.”
“Every hole is pretty similar. I wish they had used more trees instead of lakes. It’s a modern golf course. It’s not a bad golf course. I prefer the other one.”

Asked whether he will return to the tournament next year during its new date before The Masters, Singh didn’t sound enthusiastic:

“That’s something to be thought about. I don’t know. If we play the other golf course, I’d play.”

Meanwhile, crowd favorite John Daly, who finished in the top 10 in the last three SHO tournaments, but shot 1-over par to finish 59th, also was not happy:

“Every hole is different. Every day, you’ve got to sit there and decide what you’ve got to hit off the tee. That one (the Member Course), it’s driver. You know it’s driver. This one, there are too many certain shots you’ve got to think about each tee, depending on the wind. It makes it a lot harder.”

And will Daly return to play the Tournament Course again?

“Probably not. It doesn’t set up for me at all.”

Meanwhile, SHO tournament director Steve Timms said he heard much more positive than negative feedback about the Tournament Course during the week.

“You’re not going to get a 100 percent vote of confidence.”

Any changes in the course anticipated?:

“It’s also 11 months away, so we’ll see. Some things can change.”

Any chance that one of those changes would be a move back to the old Redstone Course:?

“None at all.”

Finally, kudos to the CBS Golf Television crew for their fine tribute to the late Dick Harmon during coverage of the tournament. On Saturday, CBS ran a moving segment on Dick in connection with reporting on the opening of the new Dick Harmon Learning Center at Redstone this week. CBS color commentator Lanny Wadkins, on old friend of Dick’s, gave a particularly tender testimonial on his friendship with Dick and his appreciation for Dick working with Wadkins’ sons on their golf games. It was a wonderful expression of admiration for a great ambassador for Houston, who is sorely missed.