Sunday, January 04, 2015

Ten Most Memorable Quotes of 2014

Here is a look back at some of the most memorable quotes that appeared in A Texas Bankruptcy Lawyers Blog last year.

10. Asarco, L.L.C. v. Jordan Hyden Womble Culbreth & Holzer, P.C. (In re Asarco, L.L.C.), 751 F.3d 291 (5th Cir. 2014), cert. granted, 2014 U.S. LEXIS 4913 (2014).
Too frequently, court-appointed counsel for debtor[’s] and the official creditor committees’ interests in a case, sharing the mutual goal of securing approval for their fees, enter into a conspiracy of silence with regard to contesting each other’s fee applications. (citation omitted).
While the Asarco case is better known for its holdings on fee enhancements and fees for defending fees, Judge Edith Jones wrote to suggest that there are not enough objections to fee applications filed. 

9. Judge Angie Alias’s review of The Interview
On this holiest of holy days–the day on which Christians celebrate the birth of Jesus of Nazareth, and in this season in which men and women of all faiths and nations endeavor to spread peace on earth and goodwill toward men–I would do something completely different. I would support every artist’s creative freedom. I would quietly pay homage to every artist’s First Amendment Right to write, speak, or otherwise express whatever he wants, no matter how offensive. I would do my own small part in telling world governments, monolithic corporations, and anonymous hackers that censorship and stifling of artistic freedom (even bad artistic displays) will never be tolerated in our American society. 
Judge Alias’s comments were significant not only because they were the first guest post in this blog, but because an Article I judge was willing to stand up for the right of Seth Rogen and James Franco to make movies in bad taste notwithstanding threats from North Korea.

8. Declaration of Robert Marie Mark Karpeles in Case No. 14-31229, Mt.Gox, Inc. (Bankr. N.D. Texas). 
Bitcoins are "created" through a computer software algorithm which, at any point in time, resides on thousands of computers on the Internet. Persons who accept to certify bitcoin transactions over the bitcoin peer-to-peer network are remunerated by the issuance of a fixed number of bitcoins which evolves over time. The certification is done by the solving of an "algorithm" with the use of ever-more powerful computers. These persons are called "miners" and the process of obtaining bitcoin in this fashion is called "mining." 
Finally someone explains what a bitcoin is. 

7. Fed economist William Strauss speaking at NCBJ. 
Bankruptcy is good. Unemployment is good. They are necessary evils. . . . Unemployment makes workers available to industries that are rising. Bankruptcy makes resources available to industries that are rising. 
It’s comforting to hear that what we do is worthwhile. However, it’s a little creepy that he seems to be channeling his inner Gordon Gecko.

6. Judge Jeff Bohm in Case No. 12-32096, In re Cody Smith (Bankr. S.D. Texas). 
Over my dead body. I do not like mediation. I think it is wasteful for the most part and you all needed to get my permission. 
Judge Bohm has some outspoken opinions and he is not shy about expressing them. While he is often provocative, he is always thoughtful.

5. Obsidian Financial Group, LLC v. Cox, 740 F.3d 1284 (9th Cir. 2014). 
The protections of the First Amendment do not turn on whether the defendant was a trained journalist, formally affiliated with traditional news entities, engaged in conflict-of-interest disclosure, went beyond just assembling others’ writings, or tried to get both sides of a story. As the Supreme Court has accurately warned, a First Amendment distinction between the institutional press and other speakers is unworkable: “With the advent of the Internet and the decline of print and broadcast media . . . the line between the media and others who wish to comment on political and social issues becomes far more blurred.” 
For obvious reasons, I was impressed that the Ninth Circuit was not willing to relegate obnoxious bloggers to second class First Amendment freedoms.

4. Judge Stephen Higginson, dissenting from the Fifth Circuit’s denial of rehearing en banc in BP RE, LP v. Waxahachie Dodge (In re BP RE, LP), 744 F.3d 1371 (5th Cir. 2014). 
I will not belabor the importance of a case that, in effect, strikes down a federal statute and whose result may disrupt the way our district and bankruptcy courts handle a large volume of routine bankruptcy business. 
This was a Fifth Circuit case holding that consent was not available in Stern v. Marshall cases. In dissenting from rehearing en banc, Judge Higginson showed that he understood the magnitude of the problem.

3. Judge Edward Prado, specially concurring in Barron & Newburger, P.C. v. Texas Skyline Interests, Ltd. (In re Woerner), 758 F.3d 693 (5th Cir. 2014). 
Even though we find no error in the bankruptcy court’s use of the Pro–Snax standard to resolve the attorney fee application in this case, I write separately to note that the Pro–Snax standard may be misguided. It appears to conflict with the language and legislative history of § 330, diverges from the decisions of other circuits, and has sown confusion in our circuit. 
Judge Prado deserves a judicial courage award for following a dubious Fifth Circuit precedent while recommending that the en banc court re-examine the case. Usually it is a dissenting judge who suggests en banc rehearing. Here it was the judge who wrote the court’s opinion.

2. Executive Benefits Insurance Agency v. Arkison, 134 S.Ct. 1365 (2014). 
If the claim satisfies the criteria of §157(c)(1), the bankruptcy court simply treats the claims as non-core: the bankruptcy court should hear the proceeding and submit proposed findings of fact and conclusions of law to the district court for de novo review and entry of judgment. 
While not answering the question posed to the Court, Justice Thomas gave the reassuring message that there was a means to comply with Stern v. Marshall. In other words, he let us know that it was not time to panic just yet.

1. Law v. Siegel, 134 S.Ct. 1188 (2014). 
It is hornbook law that §105(a) “does not allow the bankruptcy court to override explicit mandates of other sections of the Bankruptcy Code.” (citation omitted). Section 105(a) confers authority to “carry out” the provisions of the Code, but it is quite impossible to do that by taking action that the Code prohibits. 
What could be better than a case where the lawless debtor was named Law? In a case taylor made for him, Justice Scalia let us know that section 105 is not a mandate to override the Bankruptcy Code. This is now so obvious that I roll my eyes at myself whenever I am forced to rely on section 105 for a proposition with no other support. 

Honorable Mentions:

Judge Harlin Hale in Case No. 14-30699, In re Buffet Partners, Ltd. (Bankr. N.D. Texas). 
Not much law, statutory or otherwise, exists regarding structured dismissals of this type. 
A statement of the obvious.

Judge Jeff Bohm in No.10-41603, in In re Karl Stomberg (Bankruptcy S.D. Texas). 
The fact of the matter is that she's a creditor in this case, and I don't know how on God's green earth one attorney can represent an ex-spouse and an ex-spouse without having a fair amount of ill feeling in the pit of his stomach, but obviously Mr. Braun concluded he could. 
Another statement of the obvious. Although this hearing took place in 2010, I just saw it in 2014.

Jeffrey Lasker, president of the Richmond Fed, speaking at NCBJ. 
You might be wondering why a central banker, the head of a regional Federal Reserve Bank, is interested in bankruptcy — particularly since distressed banks and other financial firms have for decades been handled outside the Bankruptcy Code, through discretionary processes that at times involve government-funded protection of depositors and other creditors. But in fact, that is precisely the source of my interest: I have come to believe that such discretionary actions played a critical role in the financial crisis of 2007-08. 
This probably should have been higher up on the list. However, I fear that his comments will fall on deaf ears. The current Congress is unlikely to have any interest in too big to fail legislation of any stripe.

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