Category: Celebrity Bankruptcy
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Happy New Year: Shall We Make Some Resolutions?
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Welcome to 2013 Credit Slips Readers! It’s time to think about our debtor/creditor future, what to keep and what to leave behind. Sometimes I ask my fellow bloggers if they made any financially-related resolutions but usually everyone say no, so this year, we’ll just make a nice list of resolutions through your comments! My List:
1. I resolve to read less about the financial crisis (leave it behind, all) and more about other juicy financial news. First, I want to get my hands on Pound Foolish, a new book by Helaine Olen slamming the financial advice industry. Ms. Olsen claims that advisors are not generally on the side of clients but rather on the sides of various people who buy their love. Yes we knew that, but this still might be a good read. Olen exposes the fallacies spun by some of America's current personal-finance celebrities, including David Bach, a former senior vice president at Morgan Stanley, and his Latte factor theory. Olen also takes on Robert Kiyosaki (Rich Dad, Poor Dad), apropos since one of his companies (Rich Global, LLC) filed for Chapter 11 back in August.
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Right of Publicity as an Asset in Bankruptcy?
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A quick post to announce that intellectual property scholar Jennifer Rothman has just published an article that engages with the bankruptcy treatment of the "right of publicity." Painting with the broadest brush, the piece questions the alienability of an identity-holder's right of publicity more generally, and concludes creditors should not be entitled to "own (or control)" a debtor's right of publicity (p.236). For the bankruptcy and commercial lawyers reading this post, or courts confronting questions of creditor entitlement to a debtor's right of publicity, the article contains references to recent court decisions of potential relevance (pp. 199-200) in addition to important arguments on these questions. According to Rothman, there still is no published caselaw explicitly holding that creditors are entitled to the value of a bankruptcy filer's right of publicity. (If Credit Slips readers know of examples that did not result in published decisions, I would welcome a comment below, or a note to bankruptcyprof@gmail.com).
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The Entertainment and Sports Programming Network Looks at Bankrupt Athletes
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In its acclaimed "30 for 30" series, ESPN is airing a show about professional athletes who go bust after leaving their sport. From ESPN's web site (which also has a trailer for the show):
According to a 2009 Sports Illustrated article, 60 percent of NBA
players are broke within five years of retirement. For 78 percent of NFL
players, it takes only three years. Sucked into bad investments,
stalked by freeloaders, saddled with medical problems, and naturally
prone to showing off, many pro athletes get shocked by harsh economic
realities after years of living the high life. Drawing surprisingly
vulnerable confessions from retired stars like Keith McCants, Bernie
Kosar and Andre Rison, as well as Marvin Miller, the former executive
director of the MLB Players Association, this fascinating documentary
digs into the psychology of men whose competitive nature can carry them
to victory on the field and ruin off it.The episode, simply titled "Broke," airs in the U.S. at 8:00 PM (ET) on October 2 on ESPN.
Hat tip to my former student and current Chicago bankruptcy lawyer, Frank Venis, for drawing this to my attention. And, yeah, I know it has not really been the "Entertainment and Sports Programming Network" since 1985, but the full name has been seared into my brain ever since a moment of personal ignominy in a college sports trivia contest.
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Sovereign Debt
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From the the second volumn of J.F. Molloy, Court Life Below Stairs (rev ed. 1885), regarding events after the death of George III's spouse, Queen Charlotte:
A 5% recovery is pretty bad, even by modern Greek standards, but maybe that's where things are headed. Of course, maybe the proper point of comparison is actually personal bankruptcy. But note the numbers — £1,000 in 1818 (the year the Queen died) would be worth about £70,000 today; about £85,000 if we count from 1827, the date of the Duke of York's death. So the Duke's debts were … large. Much larger that most personal bankruptcies today for sure.
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Understanding Anna Nicole Smith (or, at least, Stern v. Marshall): A Must-Read Analysis
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Led by my colleague Elizabeth Gibson, four members of the National Bankruptcy Conference have produced a fantastic analysis of the Stern v. Marshall U.S. Supreme Court decision (that most recently has been mentioned on Credit Slips here and here). I strongly recommend it for judges, lawyers, academics and others interested in the bankruptcy system and/or federal court jurisdictional questions.
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Anna Nicole Smith May Be More Than Just the Only Loser on This One
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Vickie Lynn Marshall, as she is known to bankruptcy mavens, or Anna Nicole Smith, as she is known to normal people, lost today in her second round before the Supreme Court. In his last post with us, John Pottow provided a good summary of the issues, and guest blogger Troy McKenzie also had offered some thoughts about what the case might mean for some other areas of bankruptcy law (here and here). Now that the opinion is out, I would describe it as scary for the daily workings of the bankruptcy system.
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Political Cartoons. Elizabeth Warren edition.
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My husband commented the other day that he didn't think Elizabeth Warren was a "political figure." His argument was not that she is not an elected offical or that she doesn't have partisan allegiances. No, instead, he was focused on the fact that she has never been in a cartoon. But look what Google just turned up! (By the way, I'm putting this under "Celebrity Bankruptcy," another blog category that puzzles me slightly.)
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On the Rangers’ Bankruptcy
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The New York Times has an interesting piece on the Texas Rangers' bankruptcy. It seems that Major League Baseball is supporting one bidder group (including Nolan Ryan), but that group hasn't made the top dollar offer. So do the Rangers have to be sold to the top bidder or do MLB's preferences (and threat to terminate the Rangers' franchise if it doesn't get its way) have to be taken into account?
The story doesn't explain why MLB prefers the lower bid. Maybe there's a good reason. On the other hand, "we just like them better," or "we think it'd be cool for Nolan Ryan to own the Rangers," (i.e., "in the best interests of baseball") can't be sufficient grounds for going with the lower bid.
What about the threat of that if their preferred bidder wins, MLB will pack up its toys and leave the sandbox? I would anticipate that a sale order would include some sort of injunction against this (e.g., no termination of franchise except for reasonable cause). To be sure, for some creditors, the loss of the Rangers' franchise would be far worse than a lower sale price, but I don't think a spite termination can be included in a valuation maximization comparison. (Fwiw, I don't think MLB's unique antitrust exemption has any bearing on whether a bankruptcy court order can enjoin it from terminating a franchise.)
On a side note, yes, I'm aggrieved that MLB loaned the Rangers $40M, which was used to land Cliff Lee. Go go White Sox!
[Bob: note the spacing!]