The Power of Apology
January 24, 2007
by Michael T. Hertz
Lang, Richert & Patch
A few months back, Playboy magazine ran a cover, showing Jessica Alba. Alba, miffed at the unauthorized use of her photo, threatened to sue. In response, Hugh Hefner, Playboy’s founder, wrote a personal letter of apology, and the magazine made donations to two charities which Alba supports. Result? Alba decided to drop her claims against the magazine.
What a wonderful result for everyone. Ms. Alba got her grievance recognized, some deserving charities got money, and we were all spared the cost and silliness of yet another unnecessary lawsuit. We bet you didn’t know that Mr. Hefner’s apology took some courage. If Ms. Alba had decided to sue, she would have been free to argue that the apology was an admission of fault. So a gracious gesture would have been turned into a lawyer’s bludgeon. (As attorneys, we would take a certain amount of umbrage at such a tactic, even though it’s perfectly legal).
Unsecured Creditors – Challenges after Bankruptcy Reform
January 14, 2007
Bankruptcy reform is sure to have an impact on the debt purchasing industry for years to come. But what are the key points that debt buyers need to look at?
With the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), fundamental changes in how distribution of a debtor’s income will be made during a bankruptcy case went into effect. Unfortunately, touted as a “creditor’s bill,” an analysis of BAPCPA has uncovered several examples of the law of unintended consequences. Indeed, credit card companies and other unsecured creditors, and those who purchase this type of account, should proceed with caution when making projections based on media hype and rumor.
When analyzing and anticipating the net result of BAPCPA for a creditor or debt buyer’s bottom line, it is one thing to make general predictions about recoveries, but another to understand why the changes will occur and what can be done by unsecured creditors to make a positive difference for recoveries. This article will focus on some of the major changes made by BAPCPA and their effects on unsecured recoveries.
Health Care vs. High-Tech in War over Obvious Patents?
January 14, 2007
by John Timmer
Ars Technica
It’s not often that Science contains an analysis penned by a lawyer. But the lawyer in question, Michael R. Samardzija of the M.D. Anderson Cancer Center’s Intellectual Property office, suggests that the US Supreme Court is weighing an issue that may pit parts of Science’s readership against each other. At issue are cases where a patent covers a development that is obvious, and the analysis suggests that while the health care industry (including biotech) likes the current system, high-tech firms such as chipmakers are finding it a barrier to innovation.
Mandating Consensus Through No-Contest Clauses
January 3, 2007
By R. Thomas Dunn
A “no contest clause” in a testamentary trust does not violate California public policy even if one beneficiary’s contest voids other non-contesting beneficiaries’ bequests. (Tunstall v. Wells (2nd Dist., Div. 1, 10/30/2006) B188711.) In Tunstall v. Wells, supra, a trustor formed a testamentary trust providing bequests to his five children. The father left $50,000 to three of his children with the remainder distributed to the other two. The trust contained the following no contest clause:
FRCP Amendments: Discovery of Electronically Stored Information
January 3, 2007
By Christy M. Thornton
Lang, Richert and Patch
Introduction
Effective December 1, 2006, amendments to the Federal Rules of Civil Procedure place new obligations on attorneys using electronically stored information (“ESI”) in federal courts. The amendments force parties to address, early in the case, issues of how to best preserve, collect, and produce ESI.
The amendments were created in response to recognition that ESI raises different issues from conventional paper discovery. Characterized by an exponentially greater volume than hard copy documents, ESI presents a substantial risk of inadvertent production of privileged material. Preservation of ESI also raises an issue, since computer information, unlike paper, is dynamic; computers continuously overwrite, delete, and change stored information. In addition, ESI may become incomprehensible when separated from the system that created it. In response to these problems, the proposed amendments require counsel to address ESI issues from the outset of litigation.
Securing Multiple Debts by One Deed of Trust: Maximize Recovery with Dragnet Clauses
January 3, 2007
By René Lastreto, II
Lang, Richert and Patch
A “dragnet clause” is a contract provision stating that a mortgage secures all the debts that the mortgagor may at any time owe to the mortgagee. California courts have upheld the general validity of dragnet provisions. Union Bank v. Wendland, 54 Cal.App.3d 393, 398 (1976). They also recognize the risk that such provisions may be included in a trust deed or mortgage without the debtor’s knowledge or understanding. “Clauses such as this are often termed ‘dragnet’ or ‘anaconda,’ ‘as by their broad and general terms they enwrap the unsuspecting debtor in the folds of indebtedness embraced and secured in the mortgage which he did not contemplate… ‘….” Wong v. Beneficial Savings & Loan Association, 56 Cal.App.3d 286, 292 (1976) emphasis in original.