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September 29, 2007

"Courting Failure" by Professor Lynn LoPucki

This 2005 book by Professor LoPucki is subtitled, "How Competition for Big Cases is Corrupting the Bankruptcy Courts."  It is a little surprising how blatant LoPucki is about accusing judges, in New York and Delaware primarily, of courting the local bar in order to induce large corporations to file in their particular jurisdiction.  He tells stories of how other courts blew it by not kow-towing to the big firms that decide where to file the big cases.  If huge fees and rates are even questioned or first day motions, cash collateral motions, and exclusivity are not simply rubber stamped, the court will never see a big case again, he asserts.  If there is a hint that a judge might appoint a chapter 11 trustee early in the case, the court is not considered.  Management of the big cases choose the attorneys.  A chapter 11 trustee chooses his own attorneys and typically investigates management.  According to LoPucki, the New York judge in the Enron case performed admirably but Ken Lay's standards.   

Why you might ask would a judge in Chicago or Houston want to see large cases filed in their jurisdictions, much less compete for the "privilege"?  LoPucki answers that the judge handling the case will win a lot of new friends, get his or her name in the paper a lot, and achieve notoriety.  Some of course do not want the extra work but many do.  LoPucki does not even hint that a judge will get any financial benefit from the big cases coming to town although obviously a big case judge will be actively sought by the big firms after retirement. 

The book is supported very nicely be statistics and tables and is a very entertaining read.  His factual proof is compelling.  He cites how Judge Burton Lifland in New York was "accidentally" getting something like half the big cases filed in New York when there were five judges "on the wheel."  He got a statistician involved to compute the probability of that accident. 

Let me know what you think.  Jon Hayes      

September 29, 2007 in Book Reports | Permalink

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