Category: News Feeds

Practical advice for 
supporting distressed loan Portfolios

The chaotic economic environment brought on by the coronavirus pandemic has led to a rise in distressed companies. Lenders and creditors face an unprecedented challenge of navigating a high volume of loans in distress. 

Legal teams supporting lenders need to quickly assess best practices for dealing with these distressed loans, all while navigating tightening budgets and a hazy timeline for recovery.

Our experts on workout, loan restructuring and special assets management will share their combined knowledge on how to address this growing issue.

Discussion will focus on:

• Managing challenges for businesses with high volumes of commercial loans amidst an economic crisis
• Prioritizing key clients and handling deteriorating relationships
  
• Supporting lending teams and special asset groups that are dealing with distressed commercial loans
  
• Getting ahead of deteriorating loan portfolios, including loan forbearance drafting and management at scale
• Addressing unique concerns, including preference litigation and real estate-specific challenges

Presenters:
Marc Allon, Axiom Financial & Bankruptcy Lawyer
Jack Lundstedt, Axiom Financial Restructuring & Commercial Contracts Lawyer

Moderator:
David Feldman, Director of Solutions Marketing, Axiom

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The best current thinking is that Donald Trump has a one in four chance of winning re-election.

Assume first that Trump wins. The future of the Republican party is at least straightforward: The party would not realign. It won! There’s no need to realign in the face of victory. Trump would serve until 2024; candidates for the 2024 Republican nomination would begin to throw elbows; everything else would remain unchanged for four years.

But assume that Trump loses. What becomes of the Republican Party?

This is a challenging thought experiment. The Republicans, having suffered a loss, would try to find conservative ground that could attract a majority of American voters. What would that look like?

The most interesting possibility is that Republicans realign behind a platform that unites the conservatives of the right with the Bernie Bros of the left: The Republicans would become pure America-firsters. The party would strive mightily to protect American jobs — a worthy goal. This reformed party would thus support tariffs, which increase the price of imports compared to goods produced in America. The party would oppose immigration, which allows foreign workers to enter the country and compete with Americans.  The party would oppose membership in international organizations (such as NATO, WHO,  and the United Nations), which waste American resources on irrelevant foreign affairs. The party would oppose most uses of American force, which again simply inject Americans into foreign conflicts. The new Republicans wouldn’t be overly concerned about the environment. If we can maintain jobs (because the cost of producing goods is lower, so the sales price is lower), Republicans would be less worried about global warming, the Green New Deal, or the quality of air or water.

The internationalists — the new Democrats — would inhabit the opposite end of the spectrum. They would support free trade, liberalizing immigration, playing a major role in the world, and protecting the environment.

This strikes me as a worthy struggle between two belief systems. I’m not sure who would win in an election between these two sets of beliefs, and I’m fairly sure we could stop hating each other as we debated these issues.

But then I thought harder.

If Trump loses this fall, he remains eligible for re-election in 2024.

If he loses in a close contest, he remains a strong contender for the 2024 nomination.

Whatever you think of Trump, he loves the spotlight, he’s good at attracting it, and he probably wouldn’t give it up easily.

Immediately after the 2020 election, the best way for Trump to draw the spotlight would be to proclaim that he was outraged, or the election was a fraud, or whatever, and that he intended to run again in 2024.

Wouldn’t this stop the Republican Party in its tracks?

Trump would immediately be the front-runner in the Republican 2024 primaries, and he would still have massive support in the Republican Party.  Mike Pence, Marco Rubio, Ted Cruz, or Nikki Haley wouldn’t stand a chance against Trump as he moved toward 2024. And the parties surely wouldn’t realign, as I hypothesized above; they would march in place until this got sorted out.

How would it sort out?

Maybe — maybe — this would be sorted out by a criminal proceeding. I doubt that Trump would be prosecuted for any federal crime after the end of his presidency. If Trump lost the election, he’d pardon himself before he left office. That may not effectively bar a criminal prosecution, but it would surely gum things up in the courts for several years. By the time those years had passed, Biden (or his successor) would think (as Ford did long ago) that it’s generally not a good idea to prosecute former presidents. In any event, that would be several years from now, and memories would begin to fade about whatever supposed evils Trump had done. And Trump would be getting old; what purpose would it serve to put an old man in prison?

So nothing would happen at the federal level.

The states, however, are a different story. I don’t know what the states are currently investigating, or what they might choose to investigate as tax returns are disclosed and testimony taken in civil cases. I surely don’t know whether Trump has committed any crimes for which he could properly be convicted. But I suspect that many Democratic state attorneys general and local district attorneys would think the road to a bright political future was paved with the body of Trump. Jury selection in any criminal cases those prosecutors chose to bring would be a zoo, and the jurors would do battle over whether Trump should be imprisoned for just being himself or set free after shooting someone on Fifth Avenue.

Only after the 2024 primary season concluded, or those criminal cases came and went, would the Republican Party start thinking about life after Trump.

Mark Herrmann spent 17 years as a partner at a leading international law firm and is now deputy general counsel at a large international company. He is the author of The Curmudgeon’s Guide to Practicing Law and Drug and Device Product Liability Litigation Strategy (affiliate links). You can reach him by email at inhouse@abovethelaw.com.

One by one, Biglaw firms are slowly but surely reversing their austerity measures. Back in April, Stoel Rives — a firm that came in 132nd place in the most recent Am Law 200 rankings, with $236,541,000 in gross revenue in 2019 — announced across the board salary cuts and employee furloughs. Partner distributions were reduced by 20 percent; associates, staff attorneys, and of counsel attorneys had their salaries slashed by 20 percent; and staff saw hourly reductions with corresponding pay cuts (5 percent for those earning less than $75,000; 10 percent for those earning $75,000-$100,000; 15 percent for those earning $100,000-$150,000; and 20 percent for those earning over $150,000). On top of that, staff bonuses were deferred and hours-based associate bonuses were eliminated in favor of discretionary bonuses. Last but not least, 10 percent of the firm’s staff members were furloughed.

Now, thanks to the firm’s “better than anticipated” performance during the pandemic, come September 1, those cuts are being partially rolled back. Melissa Jones, the managing partner of Stoel Rives, released the details in a statement (available on the next page):

• The current compensation reduction for all associates, staff, and of counsel lawyers will change from 20% to 10%.

• Staff salaries and schedules will be modified as follows:
  • Staff with a 20% reduction will change to 10%
  • Staff with a 15% reduction will change to 7.5%
  • Staff with a 10% reduction will change to 5%
  • Staff with a 5% reduction will return to full salary and schedule

• Third quarter partner distributions will be reduced by 15% instead of the 20% reduction in Q2

Everyone at the firm must be pleased (and wondering if their salaries will be fully restored sometime in 2020). Hopefully bonuses will be reflect the firm’s better-than-expected financial performance as well.

If your firm or organization is slashing salaries, closing its doors, or reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive. You can email us or text us (646-820-8477).

Earlier: Associates At This Biglaw Firm Are Taking A 20 Percent Pay Cut

Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

Retired federal judge Maryanne Trump Barry doesn’t think much of her brother, President Donald Trump, in secretly recorded audio reported by the Washington Post. The recordings were made by Mary Trump, author of “Too Much and Never Enough: How My Family Created the World’s Most Dangerous Man,” (affiliate link), who recorded a series of conversations with her aunt, Judge Barry, over the course of 2018 and 2019.

According to the WaPo article, a spokesperson for Mary Trump said she began recording conversations with her family in advance of her tell-all book after suspecting dishonesty by her family in a previous legal matter over her inheritance. (New York only requires the consent of one party for recorded conversations.) And boy, did Mary Trump get some unguarded and choice comments from Judge Barry.

Here are some of the highlights:

• “All he wants to do is appeal to his base,” Barry said in a conversation secretly recorded by her niece, Mary L. Trump. “He has no principles. None. None. And his base, I mean my God, if you were a religious person, you want to help people. Not do this.”

• “His goddamned tweet and lying, oh my God,” she said. “I’m talking too freely, but you know. The change of stories. The lack of preparation. The lying. Holy shit.”

• Lamenting “what they’re doing with kids at the border,” she guessed her brother “hasn’t read my immigration opinions” in court cases. In one case, she berated a judge for failing to treat an asylum applicant respectfully.
  “What has he read?” Mary Trump asked her aunt.
  “No. He doesn’t read,” Barry responded.

• At one point Barry said to her niece, “It’s the phoniness of it all. It’s the phoniness and this cruelty. Donald is cruel.”

• Barry told how she tried to help her brother get into college. “He was a brat,” Barry said, explaining that “I did his homework for him” and “I drove him around New York City to try to get him into college.”
  Then Barry dropped what Mary considered a bombshell: “He went to Fordham for one year [actually two years] and then he got into University of Pennsylvania because he had somebody take the exams.”
  “No way!” Mary responded. “He had somebody take his entrance exams?”
  “SATs or whatever. . . . That’s what I believe,” Barry said.

Of particular interest to the Above the Law audience will be the family dust-up over Barry’s appointment to the federal judiciary. According to the recordings, Donald Trump likes to take credit for Barry’s nomination:

“He had Roy Cohn call Reagan about needing to appoint a woman as a federal judge in New Jersey,” Barry told Mary. “Because Reagan’s running for reelection, and he was desperate for the female vote.” Then, she said, “I had the nomination,” and Donald Trump never let Barry forget it.

But Barry isn’t here for that:

“He once tried to take credit for me,” Barry said of her brother, quoting him as saying, “Where would you be without me?”

Barry said she told her brother: “You say that one more time and I will level you.” She told Mary that it was “the only favor I ever asked for in my whole life.” She said that she deserved the nomination “on my own merit” and that she was subsequently elevated to higher judicial posts without her brother’s intervention.

In the recordings Barry also took issue with Donald’s tendency to make everything — even their father’s funeral — about himself. And that’s why she doesn’t want the President, or any of her other siblings, to speak at her own funeral:

“Donald was the only one who didn’t speak about Dad,” Barry said. She told Mary that “I don’t want any of my siblings to speak at my funeral. And that’s all about Donald and what he did at Dad’s funeral. I don’t know. It was all about him.”

“I remember,” Mary responded.

Fascinating to see what Judge Barry has to say about her brother when she doesn’t think the world is listening.

Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

Last Tuesday, a fairly anticlimactic fly out closed out a 6-3 victory for the Tampa Bay No-Longer-Devil Rays over the New York Yankees. But an image making the rounds brought my attention to the subtext of that game-ending out.

And then… wait for it…

And the result was 6-3, an ominous tally that will inevitably reflect the lineup that either upholds or destroys Roe v. Wade depending on what happens over the next couple of months.

How do you Bluebook a baseball game?

Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

* A new lawsuit claims that Chipotle restaurants are not providing customers with appropriate change when they pay for meals in cash. Maybe they are charging more for guac now? [Pittsburgh Post-Gazette]

* Utah is allowing individuals without law licenses to offer legal services under certain circumstances. [Desert News]

* A federal judge has halted a lawsuit aimed at challenging Pennsylvania’s mail-in-voting plans for the upcoming election. [Hill]

* A lawyer accidentally offered $10,000 to settle a case instead of the intended $100,000 and this lower number was accepted. This attorney should review the law surrounding scrivener’s error… [Daily Business Review]

* Check out this profile of a patent lawyer who became a professional poker player. [Card Player]

* A lawyer in Texas will appear at a jury trial virtually while his adversary attends the trial in person. The virtual attendee should consider hiring a surrogate to appear in person in his place. [Texas Lawyer]

Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.

Which U.S. president married the daughter of his law partner?

Hint: The story actually takes a creepy turn since he became her legal guardian when she was orphaned at 11. She remains the youngest wife of a sitting president.

See the answer on the next page.

One of the foundational concepts of monetary theory is Gresham’s Law. Named after the Tudor-era financier who founded the Royal Exchange — who didn’t actually formulate it but gets the credit — it states that bad money drives good money out of circulation. If you have copper and zinc pennies in circulation, both nominally worth one cent, but the value of copper is higher, you create an arbitrage opportunity and gradually the copper coins will be taken out of circulation by enterprising individuals.

But the bad tends to drive out the good everywhere. Bad habits overpower good habits. Bad people push away good people. Bad procedures make good procedures irrelevant.

Keep An Eye On Your Bad Habits

So keep an eye on your bad habits. If you’re not careful, they’ll quickly overpower your good ones. No matter how carefully researched and thoughtfully drafted your brief is, a few typos will completely ruin the effect and turn the brief into a mess. One badly argued section will burn your credibility for the rest of the brief and probably the rest of the case.

This certainly doesn’t mean that you should be afraid of taking risks — in fact, timidity almost always reflects badly upon its practitioner — but you should always keep in mind that the importance of carefulness is almost always even more than you expect. Carelessness compounds, and a sloppy mistake is almost always going to draw attention. That’s in large part because you’re expected by all parties — clients, judges, and other lawyers — to be careful and present things clearly and correctly. No one will give you extra credit for doing the basic aspects of your job, nor should you expect them to.

Keep On Task And On Message

It’s likewise important to keep things on task, on message, and on a consistent theme. An otherwise clear, persuasive argument is ruined once you start rambling about some confusing or unrelated topic that the judge doesn’t follow, or start misstating an authority.

Instead, always remember to stay organized and focused, looking to shave off any areas of weakness or distraction that you can find. There are always areas to improve in any argument, and time spent on improvement is rarely wasted. When I prepare for an argument, I typically go over it in my head and type up notes, then go over the notes again and again to tighten it, find weak points to emphasize and see anywhere where I can improve. Briefs should go the same way: it never hurts to go over everything another time — including the old trick about reading it backward — to look for weaknesses and areas of improvement. And pulling in someone else never hurts. It’s sometimes shocking how, after you look too long at something, you end up missing something that is obvious when reading it the first time.

Always Keep Focused On Continual Improvement

Perhaps the best way to avoid the slow rot of Gresham’s inevitable and misattributed warning of atrophy is to focus singularly on continually improving whatever is before you. By keeping your eye on all of your potential weak spots, you can more easily find where the weaknesses actually are. So start today, and make it your goal to keep the bad from driving out the good.

Matthew W. Schmidt has represented and counseled clients at all stages of litigation and in numerous matters including insider trading, fiduciary duty, antitrust law, and civil RICO. He is a partner at the trial and investigations law firm Balestriere Fariello in New York, where he and his colleagues represent domestic and international clients in litigation, arbitration, appeals, and investigations. You can reach him by email at matthew.w.schmidt@balestrierefariello.com.