The Free Press - Volume 6, Summer 2010

REPORT FROM THE CHAIR

By Nicholas D. Krawec, Esq.

I hope this message finds you well, and that you are all enjoying the summer. Soon, the leaves will be turning brown, and there will be a slight chill in the air (Sun Belt members excepted) and we will be getting ready for the New York meeting. But, I don't want to rush the seasons. Speaking of time rushing by, this is my first Message from the Chair, and in preparing it, I realized that I have completed 3 months, one quarter of my term, as Chair. I can report: so far, so good. I am looking forward to attending the Strategic Planning and Leadership Conference in Boston next week, and seeing my friends and colleagues again. I hope that those of you who aspire to a leadership position in the CRS and/or the League, have taken the opportunity to attend that conference. If you couldn't make it to the Strategic Planning Conference this year, I strongly encourage you to attend the next one, and provide your input into the future of the CLLA.

I also want to share with you the names of the people who have volunteered to serve as the chairs or co-chairs as the case may be, of the CRS Committees this year, so that you know who to contact if you want to volunteer to serve on the committee and provide your energy, ideas and expertise, in carrying out the committee functions. The CRS committees and their chairs are: Education - co-chairs Ken Rozich and Richard Roosen; Newsletter - co-chairs Eva Engelhart and Emory Potter; Promotion, Development & Marketing - chair Blake Morris; Membership - chair Doug Evans; Uniform Laws and Legislation - chair Larry Brown; Nominating - chair Mark Sheriff. All of these folks, while dedicated and talented, cannot do it alone. They need your help to carry out the committees' functions. Please contact them to volunteer to serve on one of the committees. You get out of an organization what you put into it, and participation on a committee is a good way to get involved, become known in the section and League, and to meet new friends and colleagues. If you have some ideas about education programs to be presented, talk to Ken or Richard about serving on the Education Committee. If you like to write and publish articles, call Eva or Emory and talk to them about serving on the Newsletter Committee. I can assure you, any committee chair will welcome your call and your help. When you get right down to it, we are all volunteers in the positions that fill in the Section and the League. And as I like to quote the words of Colonel Jimmy Doolittle, "Nothing is as strong as the heart of a volunteer." Finally, please take a look at Ken Rozich's and Rich Roosen's Education Committee report in this edition of the Free Press, letting you know what education programs are in store for the New York meeting. Please make plans to attend. The Creditors' Rights Section has a reputation for putting on the best educational sessions, and I am confident that tradition will continue with the Education Committee under the stewardship of Ken and Richard. I hope to see some of you in Boston next week. Take care and enjoy the rest of your summer!

"THE MORNING AFTER - A ROMP THROUGH ASSET PROTECTION"

By David J. Cook, Esq.

ABSTRACT OF ARTICLE

This article will survey common asset protection schemes prosecuted by a judgment debtor who face a substantial judgment and decline payment. In the face of post judgment remedies, the judgment debtor will transform assets by retitling the assets in the name of a surrogate entity but retain beneficial use. Asset protection strategies increase the expense of enforcement and drive away most creditors who decline to invest capital in unwinding complex or difficult transfers and abandon enforcement altogether. "Creditors have great difficulty in obtaining control over these assets because often times it is cost prohibitive for the creditor to domesticate the U.S. Judgment in the foreign jurisdiction. As a result, these creditors will often settle their claims for just a few pennies on the dollar." 1 Asset protection diminishes the value of the judgment, and absent the most stout hearted and well heeled, most creditors would settle for a pittance than finance and face the rigors of year of post judgment fraudulent conveyance litigation.

This article is written in two parts: First what are basic asset protection strategies how to find assets, and second, how to unwind the transfers and achieve recompense.

THE MORNING AFTER

Payday. That's right. You read that right. The day after the big verdict. Big? No, as Ed Sullivan would say, Really big. Eye bulging. Hand trembling. GDP numbers. Those zero's go forever. The Malibu home, next to Barbra. Generational money. "Gee, Dad, where's the money for medical school for all five of us? Harvard, not UC, Dad." "Don't you worry, daughter. Grandpa, the great trial attorney, hit the grand slam, and you all get the free ride through medical school. And your first homes." Is that Greta, Nancy, Katie or Diane on hold?

Funny, the phone is not ringing. No congratulatory call from defense counsel. No email or fax for the W-2. No request for wiring instructions. Too quiet. Let's buzz defense counsel and find out when the defendant is deliver the check. You get defense counsel on the phone who informs you that Defendant is not going to pay, plan an appeals and declines to post a bond. "What about the settlement money?" "Spent on defense. Team effort. No expense spared. What a barn burner! Did you really trademark 'scorched earth'? You chewed up the scenery. You'll win the Charles Bronson Attorney of the Year Award. Thank you, by the way. Our Malibu home is just lovely. Next to Barbra." Gripping the fact that your judgment is not going to get off its hind legs and beat money out of the Defendant, you take action-records the abstracts and file the JL-1, levy on all known bank accounts, search through public records, garnish known receivables or debts, issue an ORAP and file the assignment motion. Still nothing. What was the cash cost investment in this case? Big? No, Really big. Those zero's go forever. GDP numbers.

Recent advances in medicine brought a new discovery: We are all born with a 5 watt light bulb in our brain. When you turn it on the light is very dim, but after about an hour the light peaks at 25 watts. Really, check with current issue of the "New England Journal of Medicine."

Well your light bulb just broached 25 watts, and you just remembered the ads in lawyer's magazine, much less the Los Angeles Times: "Asset Protection, " "Wealth Protection Strategies" or "Offshore Trusts, Our Specialty." At trial, the debtor wasn't penning his defense strategy for the attorney, but the scheme to hide assets.

ASSET PROTECTION MAKES ITS APPEARANCE

Now what?

How can you beat the asset protectors? You don't want to join the ranks of Fred Goldman in his historic quest for justice in chasing OJ Simpson into a Nevada prison cell. 12 years, if you have to ask. Even the Supreme Court visited this issue in 1989 in dumping equitable "asset freezes, " and in her dissent, Justice Ginsberg warned everyone of this precise day. How can these asset protectors succeed, and isn't there some inherent flaw in their schemes? The answer is yes, and no. Yes, all these schemes are flawed, and only impediment is determination and money.

WHAT ARE TYPICAL ASSET PROTECTION SCHEMES?

Well Louie, let's round up the usual suspects:

Close out the California bank accounts and reopen them in Nevada. Asset protection SOP is to form a Nevada corporation with figurehead president and agent, and the debtor is an officer with the authority to establish a Nevada bank account and ATM access. Writs of Execution die at the state border, and your debtor has now safeguarded the cash. Variations include a Nevada limited liability to establish a bank account and easy access through an ATM particularly through multi-state banks, such as Wells Fargo, Bank of America and Citibank.

Money in Nevada is not safe enough for some tastes. An asset protector creates an offshore trust or foreign corporate shell controlled by an imaginary independent trustee or officer. The debtor's beneficial interest is masked by another corporate shell, LLC, limited partnership, or next level trust. The debtor has access to the funds through the use of credit card, ATM card, single use cell phone, or wire transfers to a locally designated US bank account titled in the name of a another limited liability company (preferably out of state). The US bank (and ability to pay bills or write checks) serves as the platform to funds, always in a fictitious name. Other offshore trusts schemes include a whole series of corporations, LLC's, and trusts in different names in which funds flows internationally to final resting account with access to the debtors (60 plus is not usual). Given national privacy laws, each account holder is a separate barrier precluding inquiry into the next disbursement level, and worse the local jurisdiction might even preclude local legal process from unearthing information, aside from the expense factor. Sixty banks means sixty big, ugly barriers.

The recent UBS and US dust-up highlighted the more classic asset protection scheme. Open up a bank account in a foreign country, particularly a foreign country which criminalizes the disclosure of banking information, such as Switzerland. More sophisticated schemes allow the debtor to form the foreign entity, use the services of a "shell bank, " (no bank at all, but a name) to house the funds, or use the name of spouse or family member. The account at the real bank is never in the name of the debtor but held by the "name plate bank." These schemes succeed, but burden the debtor with ready access. If Switzerland is too passè, try any number of Pacific Island countries, most of Central America, Belize, Cayman Islands, Panama, Bermuda, Crete, Cyprus, the Jersey Islands or the Isle of Wight. Local law prohibits most financial disclosures much less the creditor action to reach the assets, and so don't worry, we will always have the Swiss bank accounts. My favorite is the Cook Islands.

DUAL CITIZENSHIIP

Want something simpler? Dual citizenship. Costa Rica will sell you a passport. Panama, I hear, is a bargain. Émigré's from Taiwan cling to their dual citizenship. With a passport (and a new name) the debtor can establish in their new name a bank account and access to funds. This scheme is particularly convenient in secreting offshore profits in lodging them in an offshore account under the name of an offshore passport without a third party.

Don't like to travel? Need to hide money? Children, they say, are a blessing, and wealth protectors. Dump money in their accounts, write checks like a banshee and no one will know the difference. The kid's name sounds the debtor's? Even better. The debtor passes the kid's checks at Home Depot without a big fuss.

FAMILY PARTNERSHIPS AND OTHER SURROGATE ENTITIES

Try a limited partnership ("LP"). Asset protectors call them family partnerships. They all work as follows: Transfer real estate, bank accounts, securities, money market accounts, or secured notes (from a prior real estate sale) to family LP. The general partner is another limited partnership, in which the general partner is typically a Nevada corporation or limited liability company, or for a few bucks more, a Bahamian trust. The best deal is that the trustee of the trust is a Bahamian individual or corporation with an opaque address such as Kingston House, Nassau, or better yet, a foreign post office box. The limited partners are the children, spouses, relatives, or other limited liability companies ("LLC"), all very attractive due to the ease and low cost of formation, general lack of yearly regularly and tax maintenance. Corporations are difficult and expensive to form (bylaws, articles, periodic filings with the state, separate tax id numbers, issued shares of stock), and typically require an attorney. LLC's, at least to get them off the ground, require fewer formalities, and Nevada, and others, are cost effective havens. The debtor (or a spouse or adult child) is a member of the LLC or officer of the corporation acting as the general partner of the LP, and therefore has effective control over property no longer titled in the name of the debtor. This is the perfect formula for the holy grail of asset protection: Wiping the name of the judgment debtor off the asset, but still retaining complete control. The bank account is branded in the name of the LLC but with access to debtor. Total boffo.

QUITCLAIM DEEDS

Still too sophisticated? Asset protection schemes jumble out of Cowdery's Legal forms. Forget the lawyer, try the stationary store. The standard remedy is the backdated quitclaim, grant deed or deed of trust, recorded before the abstract of judgment.

Backdating proffers a false date of execution. Is this a problem for you, Houston? You bet. The transfer of real property is effective upon execution and delivery, even though notarized and recorded later, and places the alleged date of execution front and center. The holder of an abstract is not a bona fide purchaser which is now painful. Asset protection schemes combine these two principals in claiming that the debtor effectively transferred the property prior to abstract of judgment being recorded, ostensibly kicking the judgment creditor to the curb. This strategy give the debtor leverage to convince the creditor to accept "pennies on the dollar."

BACKDATING IS ASSET PROTECTION

Worse is the illusion, created by the backdating of the document that the conveyance of the real property interest took place even prior to incurring of the debt, much less the rendition of the judgment and ensuing lien. As we shall see, all of these conveyances are fraudulent conveyances under the Uniform Fraudulent Transfer Act (UFTA) and the Uniform Fraudulent Conveyance Act (UFCA) (still lives, thank you), and specifically California Civil Code Section 3439.05 which avoids a conveyance by debtor without fair and equivalent consideration, rendering the debtor insolvent, or insolvent at the time in favor of current creditors. This is the key: Current creditors. Asset protectors are shrewd and know well that Section 3439.05 protects current creditors and not future creditors as opposed to Section 3439.04(a) (fraudulent conveyance with the intent to hinder, delay and defraud) which protects both present and future creditors. How to putatively protect assets? Backdate the deed. Don't be shy. The debtor signs the grant or quitclaim deed or deed of trust and assiduously backdates the instrument prior to the debt. Does this work? Not really. But enough to sidetrack the aggravated, but not the enraged, judgment creditors. In reality, this scheme backfires because Section 3439.06(a)(1) resets the fraudulent conveyance clock to the date that a bona fide purchaser could no long obtain an interest in the property (typically the date of recording). To elevate this discussion one step further, the recording of the backdated instrument itself, even if plausibly valid on its face, is still a fraudulent conveyance because the recording of the backdated deed creates an illusion of a pre-debt transfer and seeks to fob off the creditor into believing that the transfer pre-dated the debt. Total and complete fraud. Very clever, though.

Even if the quitclaim or grant deed, or deed of trust, is not backdated, the debtor concocts other schemes, such as the conveyance of real property satisfied, or secured, a pre-existing debt, evidenced by freshly minted notes due family members, foreign LLC's, trusts or distant relatives. Call the KISS method of asset protection, requiring the operative real property instruments, and one piece of paper.

UCC'S FALL FROM THE SKY

The first cousin to the real property conveyance is the mighty UCC filing (financing statements). Previously encumbered by signatures of both the debtor and creditors, today's filer can avoid this annoying formality and needs no signature. Think of UCC filings as the crabgrass of asset protection. File one, fifty or five hundred. Very cheap, and no need of the nosey notary or debtor's signature. UCC's are the dandelions of asset protection. Commercial filing services will file them by the bushel, and the filed UCC, like the backdated grant or quitclaim deed, much less the deed of trust, creates the illusion of a pre-debt transfer, attempting to beat out Section 3439.05. These UCC's apparently evidence a personal property lien, and again dissuade all but the most hardy. Typically the secured creditors are relatives, family "trusts, " offshore lenders, spouses and related entities.

DO IT YOURSELF ASSET PROTECTION: JOINT TENANCY DEEDS

Asset protection schemes already stare the debtor in the face. Property held in joint tenancy? A big deal? Many home owners hold their homes in joint tenancy because the escrow agent or real estate broker advised that the joint tenancy creates an automatic right of survivorship and the property, the largest asset of the estate, will avoid the expense and rigors of probate. At the time that the husband and wife took title, were they contemplating that each of them would be holding the property as equal halves of separate property, and destroy the community property interest? Of course not, silly. However, the joint tenancy deed creates a presumption that each party has a separate and not community property in the real property. This is a good thing, Martha. Community property is subject to the claims of the community of the husband and wife, even though the debt arose before or during the community, but not separate property (subject to limited exceptions). Despite the current cratering of real estate values, many California homeowners still enjoy the doubling or tripling of equity in their homes from the original date of purchase. All community equity is subject to creditors and to compel the sale of the home, the creditor has to prove potential sales proceeds over and above prior liens, and the homestead exemption. What if the debt only owns a one half separate property interest in the home? First, the creditor is going to have the darndest time in convincing a judge to sell one half interest of the home in face of the objection of the other party, and even if the judge ordered the sale of one half, the one half is subject to the entirety of the all prior liens. Absent the most extenuating circumstances, the forced sale process implodes.

FAMILY MEMBERS AS ASSET PROTECTION - LITTLE SUZY AS THE BAG MAN

Asset protectors will advise to add children or spouses to bank accounts, and when levied, claim that the money was theirs and that Dad or Mom were only safeguarding the funds from online "identity thieves." Re-deed all community property in joint tenancy claiming that the parties always intended the property to be joint and not community because the marriage had always been on the rocks, and that the emerging documents penned the earlier express intention of the parties. Some asset protectors encourage the parties to file divorce. Even though the Supreme Court held that marital settlement agreements can no longer launder title to real and personal property to shake off pre-lien pesky creditors, asset protectors compel their clients to work harder.

PREPAY BILLS

Are we done yet? No. What's the easiest and fool proof asset protection? Pre-pay bills, credit cards, utilities, cell phones, mortgage and car payments, buy traveler's checks, prepaid phone cards, gold coins, and stuff money in the safe deposit box. A Judicially sanctioned asset protection? Yup. Give a lien to the lawyer for fees. Yes, need I forget. I shocked, shocked to find out that lawyers hide money in trust accounts.

RETIRMENT ACCOUNTS

How about pension plans and IRA's, and retirement plans? Aside from IRA's local state law and ERISA make legitimate properly formed pension plans exempt from enforcement. IRA's are generally exempt, but subject to limits. However, pension plans, IRA's and other plans have the following advantages: They have a bank account in which the debtor can dump excess money with the patina of legitimacy. For an asset protector, this is a winner. Who cares if the pension plan, or IRA, is over funded? Unwinding an excess pension contribution takes effort and expense which is the winning outcome for the asset protection because effort and expenses is the barrier to reaching the asset.

THIRD PARTY CLAIMS AS FREE ASSET PROTECTION

What is the best asset protection scheme? Virtually free. If the creditor levied on the property, the third party, a fraudulent conveyee, files a third party claim with the sheriff. The third party claim starts a chain of events, stacked against the judgment creditor. After service of the third party claim ("TPC") the sheriff will release the property unless the judgment creditor post a bond, or secures a restraining order. If a bond, the conveyee can bond around the judgment creditor's bond. Whether a bond, or restraining order, the judgment creditor is incurring risk consisting of fees and costs potentially claimed by the conveyee as the third party claimant if the judgment creditor loses the third party claim. Real money. No fun explaining to aggrieved victims of a fraud that they have to pony up money to pay off an apparently fraudulent conveyee. The creditor has 15 days to set the TPC for hearing which is set within 20 days. Let's put a human face on this crisis. Plaintiff files suit, battles through discovery and proceeds to trial. Usual time frame? 9 to 24 months. Plaintiff wins, levies on a key asset, and faces a bogus third party claim faced by the debtor's spouse or related corporate entity claiming a lien or ownership and worse six figure risk if the third party claim tanks. Turnaround time? About 45 days. Do you get discovery in the TPC proceeding? No or probably no. Yes, in the main proceeding through a third party order of examination, or ORAP of the debtor or subpoena for third parties. What if the third party, or debtor, avoid service of the ORAP, is uncooperative, or lies, at the hearing? No so good. The burden of proof for a fraudulent conveyance in the TPC is borne by the judgment creditor who might lack effective discovery. The tactical advantage lies in the conveyee who bears no initial obligation in the TPC other to prove an interest in the property. This is not a total disaster because transfers to family members, associated entities or clear shells alter in aspects of the burden, but counsel for the judgment creditor should eat Wheaties for breakfast.

WHAT CAN BE DONE?

What we can do about this? Is trial counsel never going to sing duets with Barbra? Will his grandchildren finance their medical school education through student loans? . Will anyone call? Let's see what we can do about this. All asset protectors will admit that their schemes are fraudulent conveyances, either under the UFTA of UFCA. However, the magic moat protecting these assets, now in the keep of the trust, LP or LLC, is the intervening bona fide buyer or financier who takes free of the claim of a fraudulent conveyance claim. The trick is to retitle the asset with sufficient superficial indices of regularity that bona fide financier or purchaser will lend to take title or purchase. Why? BFP trumps creditors, except as to pre-existing lien holders. Where does the money go? In a bank, far, far away (but not in the name of the debtor).

INFORMATION IS POWER

Absent the laundering the asset, the first step in reconstructing the debtor's assets. Absent free flowing post judgment discovery, the judgment creditor seeks to the debtor's financial records. This is both a how and where. The how is through the magic the ORAP which compels the judgment debtor to appear and testify. At the ORAP hearing, the judgment creditor can subpoena records from third parties under C.C.P. Section 708.130. Think of the ORAP as creating tent pole jurisdiction in authorizing the judgment creditor to serve subpoenas upon third parties to compel production of financial statements, tax returns, escrow files, bank records. Need help in reconstructing this information? Is this another movie moment? Sure is: "Many Bothans died to bring us this information."

THE MOTHERLOAD OF INFORMATION

Let's find the plans for the Death Star. Follow the bouncing ball. Did the debtor recently refinance or purchase a home? Yes. Subpoena the lender, who is the holder of the first or second deed of trust, for the loan file, which would include the Uniform Residential Loan Application (URLA), tax returns, financials of the closely held corporation, bank statements and stock statements. Is the property in the name of the debtor's apparent irrevocable trust? Ask for the Trustee's Certificate under Probate Code Section 18100.5, and the copies of the trust agreement, along with counsel's opinion letter. The cache should give you a complete picture because the debtor seeking the loan probably did not hesitate in making a full disclosure. Absent the cleverest of the debtors, you will have identified the debtor's accountant, prompting another subpoena and more records.

Study the deed if a grant or quitclaim deed and see if the parties paid the transfer tax, which is typically measured at $1 per thousand. No transfer tax usually means no consideration.

Other pockets of information abound. Run a UCC search, and you might find bona fide lenders to the debtor, or even conveyee. These lenders are banks, factors, finance companies, leasing companies, accounts receivable purchasers, and hard money lenders, all which demand receive extensive financial disclosures. Under the auspices of tentpole jurisdiction serve the lenders with subpoenas for loan package, which consists of a standard credit application, financial statement, tax returns, financials, and if a trust Probate Code Section 18100.5. If the debtor borrowed money from a bank, you are bound to locate the filed UCC and upon a subpoena, a treasure trove of financial statements.

What if this information is a year old, or more? Probably, but the information gives you a template in reconstructing a portfolio of assets, including name of banks, account numbers, list of assets, securities accounts and real property in the name of third parties. If post judgment these assets apparently vanished, but you can identify them and levy all of them. (But beware of the third party claim). Better yet, you have a place to start an ORAP in creating a paper trial as defined assets and what might have happened to them. ORAP the asset holder.

PRELIMINARY CHANGE OF OWNERSHIP REPORT

Battling a grant deed to a limited partnership or LLC? Subpoena the County Tax assessor for the Preliminary Change of Ownership Report ("PCOR"). Transferring California real property poses the threat of Prop. 13 reassessment which compels the judgment debtor in the PCOR to state either that the transfer to the trust is "revocable, " or that the transfer is to the parties in same ownership represented by the current deed. Subpoena the escrow company who probably has a copy of the PCOR, and the real estate broker or mortgage broker who might well have the debtor's (or trust's) financial statement. Information from the URLA, PCOR and financial statements gives you the quantum of proof to show that the debtor is still the owner of the property, or that the transfer is clearly fraudulent, and therefore making the burden of proof in the third party claim proceeding or even flatly contradict the title claimed by the conveyee.

You subpoena the debtor's bank account and get a whole stack of checks, and statements which show wire transfers. What are you looking for? Checks (including wire transfers) paid to financier for an apparent real property loan (ownership of property), property tax (same), insurance (same), real estate broker or property manager (same), another bank account (laundered funds), family member (fraudulent conveyance), attorneys and not defense counsel (asset protectors and launderers), large credit card payments (fraudulent conveyance to create credit balances), payments to any ordinary vendor in an amount grossly exceeding the amount due (fraudulent conveyance), or excess payments to fund a pension plan or IRA. (Another fraudulent conveyance).

UNWINDING THE FRAUDULENT CONVEYANCE

Under UFTA and UFCA, the judgment creditor can unwind the fraudulent conveyance and recover the assets. However, the magic is executing an UFTA efficiently and economically. [The editor cut me off. Too long she said. The answer is found is the next edition of this article. ]
DAVD COOK COPYRIGHT 2010
_________________________
1  Abrams and Tanko, LLLP, website.
Trusttanko.com/PracticeAreas/Description5.asp.

Editor's Note: David J. Cook is the senior attorney of Cook Collection Attorneys PLC. , San Francisco, California. He has practiced in the area of debtor creditor and bankruptcy for the past 35 years. Mr. Cook is a regular contributor to business and legal journals, legal publications and periodicals. We welcome his participate and insights in this difficult and perplexing area of the law. You can reach Mr. Cook at Cook@SqueezeBloodFromTurnip.Com.

"PREVENTING THE OFFICE DISASTER" - A checklist for your review

By Donald B. Kramer, Esq.

Perhaps the only ones who thrive on disasters are the news media and construction companies. Law firms need to learn from the history of those who suffered from unexpected events. Here are some thoughts for your consideration:

  • FIRE...Fire extinguishers should not be hidden. They should particularly be in areas where files and paper products are kept. Watch out for excess use of electrical outlets. In addition to 911, the phone number of the nearby fire station should be on a visible poster. While fireproof cabinets are expensive, used units are often available, particularly through internet sources.
  • FIRST AID BOX...A quality first aid box should be on the premises, and each employee should be made aware of its existence, and its placement.
  • BOMB THREAT...A procedure should be developed for the recording of any threat, and the procedures to be followed in the notification of employees, and any evacuation.
  • HANDICAPED EMPLOYEES...In the event of evacuation, a pre-determined method must be developed for the removal of any handicapped employees.
  • THEFT...Many employees and partners have contact with money. Bonding of employees and partners is appropriate in all offices. Alarm systems are needed in the event of a burglary, particularly in the evening hours, to prevent theft of computers containing valuable personal details, and many creditors are now insisting upon alarms as well as video cameras in strategic places. Maintain a "panic alarm" in the event of an armed robbery.
  • FLOOD...If the office is in a flood plain, or subject to flooding for any reason, try to avoid using the lowest drawer of the filing cabinets for essential files. This will also help prevent back problems of file room personnel. Consideration should be given to put all filing cabinets on pallets, so if there is a small water accumulation from any source, it will not cause damage to files in the lower drawers.
  • MEDICAL EMERGENCIES...Have available the phone number of the nearest emergency room, to alert them to he arrival of a critical case. Know the location of the nearest trauma facility. Have several employees skilled in the Heimlich Maneuver and CPR. Many states now provide "Good Faith Immunity" from civil liability if a defibrillator is kept at the office and used by a trained person for cardiac arrest situations. This is particularly important in offices where older employees are working.
  • EARTHQUAKE AND TORNADO...Personnel should be instructed as to the place in the building which can sustain high winds or earthquake. If your office is not on the first floor, a "buddy" system should be designed to assist any employees with physical disabilities. This also applies to fire situations.
  • COMPUTER DISASTERS...Of course, a virus prevention system should be employed by every firm, but even with the best systems, sometimes there is a brief period when a new virus is introduced and the cure is determined. Backup should be instituted often, with backup tapes kept in a secure location off-site, as a protection from flood, fire, earthquake, tornado, etc. Care should be taken to make certain that the backup tapes do not contain a virus, and therefore the tapes should be retained for a reasonable time to insure that you have a clean one to install, if necessary. If the office makes a daily bank deposit, consider using a safe deposit box at the bank for retention of backup, and deposit a tape each time a money deposit is made. Watch the temperature in the room where servers are kept, since the proper action of some servers may be hindered by heat or cold air. Protect servers from power outages, and from accidental electrical shutoff in the server area.
  • BATHROOMS...These are areas that tend to have flooding problems. The phone number of a nearby available plumber should be kept available. Know what nearby facilities are available for use by employees during the emergency. Employees should be warned about what can or cannot be flushed.

AND IN THESE DAYS OF UNUSUAL EVENTS...KEEP ALERT!

Editor's Note: Donald B. Kramer is a Life Member of the CLLA. He is Founder and President-Emeritus of Kramer & Frank, P.C. in St. Louis. He is also Founder and Chairman-Emeritus of the National Association of Retail Collection Attorneys (NARCA). He was awarded the President's Cup of the CLLA in 2007 for outstanding work in the collection industry.

SPOLIGHT ON THE PRESIDENT: GARY WEINER

Interview by Eva Engelhart, Esq.

  • Full Name: Gary M. Weiner
    Residence/Hometown: Longmeadow, Massachusetts
    Education: Bachelor of Science from Syracuse University- School of Management, Juris Doctor from Suffolk University Law School - Boston, MA 
    Family: Wife- Candace of 25 years, Two Daughters Alexa 21 who is a senior at Syracuse University and Cydney, 18 an incoming Freshman at Virginia Tech 
    Areas of practice and specialties: Bankruptcy, Commercial Litigation and Commercial Collections 
    What year did you join CLLA? 1991
    What other offices have you held in the CLLA? President-Elect, Recording Secretary, Attorney Board Member, Board Liaison of YMS, Chair of Young Member Section, Chair of New England Region, member of Executive Council of  Bankruptcy Section, New England Region and  YMS

Tell us about your life activities away from the office: I like to play Tennis throughout the year and also Platform Tennis, which is played primarily in the winter. I also used to Coach my younger daughter in various sports (basketball, softball and soccer). Last year we coached a youth team together to a championship.   It was a lot of fun to interact with her as coach versus a player.

Tell us about the path you followed within the League that helped to get you to this position: My path is considered one of the traditional paths in that I started in the Young Member Section and then became Recording Secretary before running for an Attorney Board Member seat.   Although others have stated that they knew I would become President one day I was certainly not one of them when I first became actively involved.  

What qualities do you feel that you will bring to the job of President of the CLLA? I think my background in doing both bankruptcy and collection work provide me with a good balance of the issues faced by members of the league.   Having been on the board for over 6 years I understand the political issues within the league and believe that I can work with all of our members as we move forward.

What goals would you like to achieve for the League during your term in office?

  1. Continue on the Path as set forth by our Strategic Plan;
  2. Provide new business opportunities and expand our marketing options; and
  3. Continue to invest in the growth of our new practice groups

What advice would you give to young attorneys who join the League, and who aspire to a leadership role such as yours? Get involved, join a committee within a section; write for a newsletter or publish an article in Debt3; seek to speak on a panel; provide justification to your firm of why your involvement in the League is good for business and your own personal growth.

When you're not practicing law, or tending to League matters, what do you do for fun and relaxation? My wife would tell you that I do not spend enough time not thinking about work or the league.    Fun would be playing tennis or platform tennis.  This year will be new for my wife and I as we will be empty nesters so hopefully this means we can travel a little.

If you did not become a lawyer, what do you think would have become your life's work? I was a business major in school with an emphasis in Personnel and Industrial relations so I expect that I would be involved in running a business.

What one thing do you think we would be surprised to know about you that most people don't already know? I only listen to talk radio and very rarely listen to music.

What is your favorite quote or "words to live by?" Treat others as you would want them to treat you.

What is your favorite:

  • Car: Do not have one 
  • Food: Lobster, steamers and clam chowder
  • Vacation spot: Hawaii 
  • Actress/Actor: Robin Williams
  • Movie: The Sting 
  • Holiday: July 4th
  • Musical group/Singer: Billy Joel  
  • Book: John Adams 
  • Sports figure: Larry Bird/Bobby Orr 

MEMBERSHIP COMMITTEE REPORT

By: Doug Evans, Esq.

The membership committee provided the CLLA office with language to be sent to CLLA attorney membership by blast email relating to selecting the creditors' rights section when paying annual dues. The committee has received no feedback on whether this effort produced any results.

Editor's Note: Doug Evans is a principal of Evans & Green in Springfield, MO and is a board certified creditors rights attorney as certified by the American Board of Certification. Accredited by the American Bar Association. Neither the Missouri Supreme Court nor Missouri Bar review approve certifying organizations or specialist designations.

EDUCATION COMMITTEE REPORT

By: Ken Rozich, Esq.

Education can report that programs are set for NYC 2010, including a professional speaker on evidence for trial lawyers; a business ethics program by Manny Newburger and a multi-state survey of how states handle similar collection related issues. We are starting to work on programs Chicago 2011 and would welcome suggestions for topics and/or recommendations for speakers.

Editor's Note: Ken Rozich, Esq. is a principal in the firm of Jacobs & Rozich, LLC in New Haven, CT where he practices in the area of commercial litigation, construction law, creditor's defense, and personal injury.

NEWSLETTER COMMITTEE REPORT

By: Emory Potter, Esq. and Eva Engelhart, Esq.

The newsletter is circulated three times per year electronically in the Spring, Summer and Fall (and via fax for those rare few who are not online). Emory Potter and Eva Engelhart are the new Co-Chairs of the Committee. We want to thank Liviu Vogel for his work as the chair of the newsletter committee for a number of years and look forward to his service as chair elect of the CRS. This issue features the annual newsletter spotlight on the Commercial Law League's new president, Gary Weiner. We will be selecting the award winner for the Best Feature Article this fall. Please let us know if you are interesting in judging the articles. The award and gift will be presented at the CRS meeting in New York.

Members, including members of the Executive Council, are encouraged to submit articles of interest or letters to the editor for inclusion along with a short bio for publication.

Editor's Note: Emory Potter, Esq. has been a partner in the firm of Hays & Potter PC for over 15 years where he specializes in commercial and construction litigation. He acts as a Special Master for the Superior Court of Fulton County and has acted as a municipal court judge pro hac in the city of Chamblee, Georgia. He is a graduate of Auburn University and Georgia State University College of Law and has been a member of the CLLA for 15 years. Eva Engelhart, Esq. has been an associate with Ross Banks for 12 years. She focuses her practice on commercial and business litigation, primarily commercial collections. Eva's practice includes representing clients through trial involving collection of business accounts, contract payments, note payments, and post-judgment collections. She received her J.D. from the University of Houston Law Center in 1996 and received her B.A. from Brandeis University in 1993, Magna Cum Laude.

LETTERS TO THE EDITOR

Letters or comments can be sent to eengelhart@rossbanks.com. The Free Press has instituted a "Letters to the Editor" column. If you don't want to take time out of your busy schedule to do research for a scholarly article, if you have a suggestion, recommendation, or constructive criticism to direct to the Section leadership or the Free Press editorial board, or if you just want to "vent" (in a non-abusive manner, of course), you  now have a forum. You can submit a letter any time it suits your fancy, and you need not wait until just prior to the publication of an edition of the Free Press. Submissions will be kept on file for future publication.

NOMINATIONS SOUGHT FOR 2011 AWARD OF EXCELLENCE

The Creditors' Rights Section of the Commercial Law League of America is seeking nominations for its Award of Excellence, which was established to recognize outstanding contributions in the field of law affecting creditors' rights. The first recipient of this award, in 2005, was Professor James J. White who, along with Robert Summers, published the most widely recognized treatise regarding the Uniform Commercial Code. The recipient must be a lawyer, legislator, professor of law, or judge, whose work has substantially and positively made an impact on creditors' rights. The recipient will be selected for presentation of the Award at the Annual Meeting of the League held in Chicago in April, 2011. Nomination forms are available at www.clla.org.

CALENDAR OF EVENTS

August 5, 2010 - August 8, 2010
Strategic Planning & Leadership Conference 2010, InterContinental Boston, Boston MA

November 11, 2010 - November 14, 2010
90th Annual New York Meeting, NY Sheraton Hotel & Towers, New York, NY

February 24, 2011 - February 26, 2011
Southern Region Conference, Royal Sonesta, New Orleans, LA

April 14, 2011 - April 17, 2011
81st Annual Chicago/Spring Meeting
Westin Michigan Avenue, Chicago, IL