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Good morning ladies and gentlemen. We're going to spend the last hour of this conference honoring and learning from two true legends of the law, Jerry Smith and Harvey Miller. And while neither of them needs any introduction, I thought it appropriate to briefly review their biographies. Of

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course, a full review of all of their achievements would take the entire hour, so we're just gonna hit the highlights. Jerry was born in Manhattan, Kansas 70 years ago this coming Monday, November 6th. Happy birthday, Jerry. Thank you. Although he was accepted to Harvard and

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Stanford for college, he went to Kansas State University in his hometown, graduated from Kansas State with high honors in 1958. He then attended New York University Law School on a full Root Tilden scholarship. He was an editor of the Law Review and graduated with honors in

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1961. I think it's fair to say that it was at NYU that Jerry first developed his interest in bankruptcy law, having written a law review note on a bankruptcy case and then taken a federal jurisdiction course from Charles Seligson, about whom we're going to talk more

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later. In 1961, Jerry joined what is now known as Lewis and Roca, the law firm in Phoenix, Arizona, and has been with that firm ever since. In 1970 he became a member of the National Bankruptcy Conference and in 1972 was appointed the deputy director of the

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Commission on Bankruptcy Laws of the United States working for Professor Frank Kennedy who was the director of the commission and also who we'll hear more about later. That experience undoubtedly proved invaluable to the 1994 National Bankruptcy Review Commission, where he served as a member of

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three different working groups. Jerry's also a member of the American Law Institute, the American College of Bankruptcy. He's been involved in a number of high profile bankruptcies, including the Hunt brothers bankruptcies which for those of you that are a little younger involved two guys that tried

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to corner the silver market as I recall, Kaiser Steel, Storage Technology and most recently as the trust liquidating trustee in the Boston Chicken case. Harvey Miller was born in God's country, also known as Brooklyn, New York. On March 1st, 1933. He graduated from Brooklyn College

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in 1954 and Columbia University Law School in 1959, as is true of so many of us, Harvey's career in bankruptcy law was rather fortuitous. He made an appearance in the bankruptcy court on behalf of one of the other members of the firm he was in

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the Southern District of New York to obtain a continuance. He liked what he saw. He got involved in handling claims in a large case, and 47 years later, here we are. He became associated with Seligson, Morris and Neuberger in the early 1960s. That firm ultimately

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merged with Weil, Gotshal and Manges, where Harvey was a partner until he moved to the investment banking firm of Greenhill and Company, where he was a partner and vice chairman. He's a member of the National Bankruptcy Conference and the American College of Bankruptcy, among many other

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organizations. One of the things that I think is appropriate to say and maybe the only point I'll make during this entire presentation. is how few, but a small group of people really were involved and were so influential in this area of the law. I don't know

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of another area of the law, frankly, where so few people had so much influence over its development, both statutorily and otherwise. Two of those people, 2 members of that group, are here with us today. I should also note that Harvey hasn't exactly been idle over

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these last 47 years as he's been involved in some of the largest cases in the country, including Pacific Gas and Electric, recently Texaco, RH Macy, Federated Department Stores, WT Grant, and Continental Airlines. Well this brief review hardly does either of them justice, but I'm going to

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move on to explore their recollections and insights. Harvey, as I said, I've taken a lot of oral histories and, that small group of people, that remarkably small group of people, when you look at the list, always includes someone by the name of Charles Seligson. Maybe

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you can tell us a little bit about him. Sure, Professor Seligson was part of a small group in New York City that spent most of their time in the bankruptcy field. It was Professor Seligson, Sydney Krause who were the leaders of the New

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York bar, and it was a small bar. We have a picture actually that gives you some idea as to just how small that bar might have been. This is a picture from 1969, and I think Harvey, you can tell us a little bit about it. This

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was actually a retirement party, and it was a retirement party for the court reporter for a referee in bankruptcy, Annette Shapiro, and the picture that's not. The bankruptcy bar is actually smaller than that. Half of the people in that room were politicians. The referee was a

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very political character, and Annette had been there for a long time, and she actually, I think, was the judge. If you look at that, I don't know whether the audience can see it. I don't know whether the audience can see it or not, but if you

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look very closely at the upper left hand corner of that picture. You will see a young smiling Connie Duberstein with two women sitting on his lap. That was Connie. That was Connie. Well, but peeking over his shoulder right behind him is someone that looks like Harvey

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Miller with another woman on his lap. In any event, those were the days, those were the days, right? And isn't Charles Seligson in that picture? Yes, yes, he is. I, I can't see from here, but he's in the picture. In any event, I didn't. There

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he is right in the right hand corner. OK. Anyway, more about him. Well, Charles, he taught the bankruptcy course at NYU as well as federal jurisdiction and was a member of the National Bankruptcy Conference with Sydney Krause. And as I said, it was a small, rather

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arcane bar. After the Second World War, there weren't many bankruptcies and none of the Wall Street law firms really indulged in bankruptcy cases. So if a bankruptcy matter came up, you got a referral from Sullivan Cromwell or whoever it might be, and it was when

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I first started practicing, it was very interesting because the field was sort of compartmentalized. Connie Duberstein was in the restaurant business. His firm just did restaurants. That's the kind of specialization it was. And on the top was Professor Seligson and Sydney Krause, and Professor Seligson

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was very active in legislation. In those days, and I noticed seeing Alan Parker on the film just before, no bankruptcy legislation could get through Congress unless it went through Subcommittee 4 of the House Judiciary Committee. And the Judiciary Committee was chaired in those days by

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a congressman from Brooklyn by the name of Manny Seller and subcommittee 4 was chaired by another congressman from New York by the name of Zelenko. And if you want bankruptcy legislation, it had to be cleared by that committee, and Professor Seligson and Sydney Krause were very

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active with that committee. And Professor Seligson had this great love of bankruptcy law. I mean, we used to sit in his office. Excuse me, at night, discussing problems. At 5 o'clock you'd get a call from the professor. Could you come to my office? And then you

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knew you were gone for the evening. The first day I went I went to work for Professor Seligson, and it was sort of strange how I met him. I met him as an adversary. I was sent down to get, not the continuance, it was after that.

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I was sent down to, well, many of the people out there today don't recognize there was actually a world before 1978, and there was another bankruptcy law, and the Bankruptcy Act of 1898, which Jerry and I practiced under, had a provision in it. If you were

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in Chapter 11 and you want to operate the business and you projected losses, you had to post a bond to indemnify the estate against the losses. Now if you go into Chapter 11, you really don't have the resources to put up a bond. I think the

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idea was the principals would put it up. And then we had a rule, general orders, which in the Southern District provided that there would have to be a hearing within 10 days. And the firm I was with at the time was selected to represent the creditors

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committee in a case that Professor Seligson filed, and it was a retail case, and I was I think practicing a year. And I was sent down by the senior partner of the firm to get an indemnity bond. And I really didn't know who Charlie Seligson was

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until I opened up Collier's and I saw he wrote 4 volumes. It made me a little nervous, but I really prepared that case. I got the projections and I was ready to establish this company was going to lose money. And I went down to the

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court and I laid out my papers on the council table and the door opened and this little man, Charles was a little man, North Carolinian with a southern accent, and he came in and I figured it was he and I said, Good morning, sir. I'm Harvey

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Miller. He shook my hand and it was a very weak handshake, and I said, the man's a wimp. I can take this man. And he brought Leonard Rosen with him who was carrying his bag, and I was all set and the referee in bankruptcy was Asa

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Herzog. And he came out of chambers, which was right behind the bench, and he sat down and he looked up and he said, oh, Professor Seligson, what an honor to have you in my courtroom. And then he came down from the bench, walked past me

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and shook hands with the professor, and I said, boy, it's gonna be some morning. I did not win. And that developed into a friendship. I mean we were adversaries through that case and the professor was a very interesting man. I say professor because for the

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1st 5 years I thought that was his first name. Like Jerry, he picked up Jerry out of his course, and if he liked you, he just took you into his bosom, so to speak, and he would invite you for lunch and things like that in which

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he would actually discuss. Where's bankruptcy law going and so on. And after a year in very funny circumstances, he came to me and said, How would you like to come to work for me? And that was a funny situation because he had been selected as the

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attorney for a Chapter 10 trustee. And the case was up on appeal on the motion to dismiss, and we went through a little song and dance, and he said if you'd like to come to work for me, I'd be fine, and I said, OK, and he

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said there's one problem. If the motion to dismiss is granted, I won't have enough work for you, so it's temporary. And I said, How am I going to explain that to my wife, but I did. The thought of working for him was just so great that

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I decided to take the job, and I did, and we developed a very, very close relationship. He touched you, as Harvey's indicated. He touched your life in a big way too, didn't he? Yes, he did. It was no good reason for it, but I had that

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evening class with him. And he also looked at my little student comment. It was kind of an interesting arcane area I was working on, and he liked it. And we would eat supper on a couple of occasions down in the village. He loved to do that

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after the course, and he always just kept in touch and of course I left New York right after I graduated from law school, so I didn't have a lot of close contact until later in the. Commission. I want to tell a little story about Charlie so

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you won't believe that he was all milk and honey and kindness. He had represented Mike Todd, if you recall the, the fellow that was the producer of Around the World in 80 Days, and it was a very popular movie back in the end

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of the 60s, early 70s, and Mike Todd got into financial difficulty and Charlie had handled that under the old chapter 11. And he really was proud of that. But, when we got to working on the commission's proposal, which was an administrative agency that in the wage

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earner case, Chapter 13 today, the administrator would approve the budget, and I was working on Chapter 7 of the commission's proposal, which became Chapter 11 ultimately. And I drafted a provision so that the administrator had to approve the budget of the individual who's in Chapter 11.

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And when we got to this part of my proposal, Charlie turned red and said, Smith, you viper, you stabbed me in the back. The Countryman said very quickly, Charlie, you mixed your metaphor, and that didn't help. And then Chuck Wiggins, who was there, said, you know,

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Charlie, I can understand where you're coming from, but it would be a little unseemly to let the fellow that only made so much money. Have his budget approved while the fellow that had a lot of money wouldn't. I think, you know, I'm in favor of

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what Mr. Smith has proposed. He really didn't like it. Well, and just for clarification, Chuck Wiggins was Charles Wiggins, a representative from, I believe, Orange County, California, a very Republican district, and a Republican who subsequently became a Ninth Circuit judge and is no longer

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with us. But, since we're on the subject, why don't you tell us a little bit about, Frank Kennedy. Frank, how did he become commissioner first of all, I understand that was controversial. Well, it was. Harold Marsh, who was the chairman, had originally selected Pierre Loiseaux.

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Pete Loiseaux was teaching at the University of Texas, I recall, but he was a fairly liberal fellow, and the Nixon White House would not approve that. So they kept negotiating on it, but Harold could never get Pete Loiseaux approved, so he had to reach out for

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someone else. And in fact it delayed the commission. They had to have an extension from Congress at some point. So Frank Kennedy was selected, and Frank had gone to school in Missouri, had grown up under modest conditions. He was an incredible person. He had the greatest

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memory of anyone I ever met, and he was encyclopedic as far as his knowledge of bankruptcy, and he was the reporter on the rules project. They were rewriting all the rules in the 60s. It took many years. They finally came to fruition in 1973, as I

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recall, and He had all that background and he taught at the University of Michigan and he was the executive director and he was a great guy to work with, easy to work with, and he could always answer your question if you didn't know what you were

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doing. He was a marvelous draftsman. He rewrote everything many times. Ken Klee can attest to that. I recalled in going through my materials, he had this letter to Ken and Rich where he would keep correcting their grammar and their notes, and this is 1978, long after the

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commission is over, but he was still playing with the draft of the legislation that eventually became the 1978 code. He would spend the unbelievable hours. We got there pretty early, isn't it true, Jerry, that Frank used to sleep in the office? Towards the end of the

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commission's work. He actually slept in the office, and Vern Countryman used to come down on special projects and help out. And of course Vern would always want to go have a drink at 5:30, and it just tore Frank apart to see us get up and walk

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out with Vern because he'd want us there till about 7:30. Why did you go? Well, it's hard to tell Vern no, just like why did you go with Harold to the, what club was it? I once got dragged with them to the Gaslight

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Club. Harold Marsh, that is. Harold Marsh was a man who could stay out all night, come in at 8:30 fresh as a daisy. It was just amazing. I mean, I remember we closed that place. I don't know that I was there. I

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know you were there. This man was just prolific. And then of course there was Larry King, who was all over the place, right? And, and what was your role as deputy commissioner? Well, it was deputy director. Deputy director. It kind of evolved, they

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had really had kind of a problem with some of the staff was leaving and someone working out quite as well as they wanted, and they were really behind. We had to get this finished. I came on board the summer of '72 and we had to have

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our work product presented to the president. I think it was in July of '73. The first statutory provision was drafted by me on exemptions in I think the fall of '72, so you can see how much work we had to do. We had to end up

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writing a report with all the recommendations. And the commission had decided that they would have a proposed bankruptcy act, which was 1973 it eventually was called because that's the only way that their recommendations could truly be effective. So we had that double task, but that was

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very important, excuse me, because under the Nixon administration whenever there was a problem, there was a commission appointed. And then the commission would write a report. They'd have a meeting at the White House. The president would thank them and give each one a set of cufflinks

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or something, and the report would go into the dustbin. What this commission did was come up with an actual draft of a statute. And that's what really kept it alive. And it really doubled the work and made it very difficult, but my role

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kept enlarging as we went along. I do special topics in that first period of time. I tried to write a provision dealing with community property law and boy was that difficult. But fortunately, Harold Marsh had written a book on community property law of Washington and was

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able to help me and we did draft something. Eventually. Pachulski wrote an article about it, I think in '73 or '74 and it all got worked out and I think it works very effectively, but it was terribly complicated. Special projects like that. I rewrote the fraudulent

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transfer provisions, the avoidance powers. And it was kind of an interesting note. I don't want to take too much time on this, but under the Chandler Act, they had taken the UFCA, Uniform Fraudulent Conveyance Act, and used it to draft the provisions in the Bankruptcy Code.

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So they were modeled after the UFCA. But then when I came in, I had had some experience with it, and I thought I could improve it, so I started anew and rewrote it. And the provisions I wrote, which became part of 548, Frank took when after

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the commission's work was done, he became the reporter for the Uniform Fraudulent Transfer Act, and he just reversed the process. He took the bankruptcy code provision and used it as a model for the UFTA. So that was kind of a fun thing. And then Larry King

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was working on putting the three chapters together, chapters 10, 11, and 12, and those chapters, everybody, I think, believed that you could eliminate chapter 12 because it was a problem where 11 didn't deal with secured creditors. And once you let the new chapter deal with secured

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creditors, you didn't need 12. You dealt with partnerships and secured debt, a problem that really unduly complicated the act but was not terribly significant. In any event, Larry King from NYU, go ahead, Harvey. One of the things Jerry was responsible for in the Bankruptcy Act of 1973

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was a provision which a lot of people have forgotten that in reorganization cases there was a mandatory trustee. That was Jerry's idea. What happened, Jerry? Well, I'll come back to that later if we have time. I've softened my position. There was a meeting of the National

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Bankruptcy Conference, which I can remember very clearly. What is the National Bankruptcy Conference? Some folks may not know what that is. The National Bankruptcy Conference is a conference that was, I believe, was organized in the very early 30s during the so-called Great Depression, in which a

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bunch of academics and a leading practitioner from Philadelphia, Weissman was his name, I think. Well, came down to Washington to helped Congress draft the emergency legislation that came in before Chapter 11, before the Chandler Act, and they came down for a weekend. They thought they'd get

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this all done during the weekend, and that weekend is now extended right up to today, so it's about 65 people. It's by invitation. It's academics, judges, practitioners. And even I think we have some accountants now and financial advisors, which is, I think, a very influential organization,

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very well respected by Congress, except with respect to the 2005 amendments. But getting back to what happened to Jerry's idea? Well, there was this meeting and one of the leading debtor practitioners in New York was a man by the name of Ben Weintraub, and he filed

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a lot of XI cases. And he got up while the '73 act was being debated and he said you can't do this, you just can't do this. You've got to think about all the mom and pop companies. If you put this provision in, they'll be driven

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out of business. The trustee will consume the estate. The competitors will buy in, and as he was speaking, the tears were just rolling down his cheeks and everybody said, well, maybe Ben's got a point. And that's how the debtor in possession concept got adopted. So, Jerry,

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why is it or how is it that the 1970 commission was different from the 1994 commission on which you also worked? I think the chief difference other than actually drafting the statute, which is mechanical, the chief difference was we had some really powerful dedicated congressmen that

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worked with us from the very beginning. They were at every meeting of the commission. They participated in every decision. They knew what was being proposed. They knew its importance, and they were. Going to move that legislation through Congress. So we hit the ground running when we

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had the '73 Act introduced by Edwards and Wiggins and Burdick. Wasn't the chief judge of the Third Circuit on the commission, Judge Foreman? No, Foreman was not on the commission. Ed Weinfeld from the Southern District was on the commission, and Foreman was the head of the

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advisory committee. Yes, Foreman was the, you're right, head of the Rules Committee, the initial one, and the other one was Judge Will from Chicago. The way it was set up, the president appointed several people. The Speaker of the House and the President of the Senate appointed

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each of them 2 senators, 2 congressmen respectively, and then the President appointed, and he appointed a businessman, Newman, with the Wall Street Journal. So the commission was pretty carefully selected too, but the really important thing was having the congressman there. They had really signed off on

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the decisions that were made. They participated. They knew what they were doing, and they carried it forward. And essentially when they got to Congress, they would say to Don, the Democrats would say to Don, Well, what do you think? And Don would say, Well, I think

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you ought to do this. And Wiggins did the same thing, as I understand it, right? He was very influential on the Republican side. He was looked on as a very conservative person. He really was, to me would be the ideal Republican today. He's kind of the

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Republican that I grew up thinking I wanted to be. I haven't voted for a Republican for quite some time now, but he was a wonderful fellow, and he was more mainstream Republican than some were seeing. So before there were judges, there were referees. Why were they

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called referees? You know, it's not because we ran around with black and white striped shirts, that's for sure. Jerry Gunther, who was at Stanford Law School, wrote a book on Learned Hand. Biography. And Learned Hand, I think, was appointed as

00:25:36.099 - 00:25:51.239

a district court judge in 1910 or something like that. And after he had been a judge for a couple of years, he wrote a memo and he said the thing that really drives me crazy and takes all my time are these bankruptcy cases. These lawyers who

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are in the bankruptcy field never shut up. And they're here at all hours of the day with petitions. So I don't have time for that. So the referees were support personnel. They were appointed by the district court for 5-year terms. I think initially it was 2

00:26:05.859 - 00:26:19.680

years, but it became 5-year terms. And they really reported to the district court, and the reason they were called referees is because they were referred things, is that right? Exactly right. OK, I got referred down from the district court judge. So what was it like practicing?

00:26:19.719 - 00:26:37.430

You both practiced before referees. What was it like then versus what it's like today, for example? Well, in the Southern District of New York we had, when I started 4 referees. And each one was different. There was no central clerk's office. Each referee

00:26:37.430 - 00:26:53.150

had his own internal rules, and we had some very good ones. Asa Herzog was a referee when I started, and I was very fortunate as a young man. My first assignment, and I was really not interested in bankruptcy. It was a total accident that I got

00:26:53.150 - 00:27:06.930

there. I learned one thing in the army, never volunteer, and I was walking down the hallway in this law firm I was with. I also learned never respond to hey you, and I was walking down the hallway and a partner came out of his office and

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he said, Hey you, and I just kept walking, but I ran out of space and he got me and sent me down to the bankruptcy court and I didn't even know where it was, but I went down there and I found any court that has

00:27:18.410 - 00:27:39.439

to deal with the words indubitable equivalents must be a good place to practice. And the referees were in their own realms pretty. Important. I mean, the problem that you had is everything was appealable or reviewable. It was a petition for review to the district court and

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there had been a major scandal in New York in the 30s in which the clerk of the court of appeals had jumped out the window about receiverships. So the referees were very controlled. For example, it was a very odd thing in the Southern District. A referee

00:27:55.520 - 00:28:14.239

in bankruptcy could not award allowances of compensation. All he or she could do was make recommendations to the district court, and on motion day it had to go up to the district court, but in Chapter 11, Where there were no rules, the referee could grant compensation.

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So to tell you the way the court viewed the whole thing, I was the chairman of a committee at the City Bar Association, and I came up with a report for my committee that we ought to enhance the court. We should allow referees to wear robes.

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They didn't wear robes. We should allow the referees to take the judge's elevator. They weren't allowed in the judge's elevator, and we said it's important to enhance the bankruptcy court because that's where most of the people see the court, and it was really funny because Judge

00:28:43.270 - 00:28:56.390

Weinfeld was the chairman of the bankruptcy committee in the Southern District, and I went to see him and I gave him the report and he read it and he said it's very interesting, very interesting, he said, but I think this would would sort of bring the

00:28:56.390 - 00:29:11.989

district court down, and he threw it away. And as I understand it, he was even a partner of Asa Herzog's at one time. They had a very close association, and Judge Weinfeld was always soliciting Professor Seligson to become a referee. So Jerry, what was it like

00:29:11.989 - 00:29:28.630

in the West? I'll get to that in just a second. Let me finish with Judge Weinfeld, who I have tremendous respect for. He's a wonderful person, but he was the sole dissenter from the commission I worked for's recommendations, and it was because of the elevation of

00:29:28.630 - 00:29:45.280

the bankruptcy court. In his opinion, it was unnecessary. The referee system worked just fine. Let's let's just keep calling them referees, and he really didn't want to change that. And I think the perception is on the part of the Article III judges is that somehow if

00:29:45.280 - 00:30:05.459

you create more and more participants in this power, that they will be not regarded at the same high esteem, and it's something we still face today, I think, and It's unfortunate. I wish we could get over it. You see the same problem with not having special

00:30:05.459 - 00:30:24.380

masters appointed by bankruptcy judges. The bankruptcy rules expressly prohibit that, and that's a remnant of that old thinking, in my opinion. But how did things happen out in the West? I'll tell you, we didn't have many bankruptcies. I came to Arizona and I got involved in

00:30:24.380 - 00:30:42.520

a few of them, and I was very fortunate because I got involved with some really extraordinary people and what Harvey has said, it really was a specialty. Frank Quittner with Jack Stutman. It was Quittner, Stutman, Treister, and Glatt, George Treister and Herman Glatt, great

00:30:42.520 - 00:30:58.589

firm, and then Barney Shapiro and Arnold Quittner and that group were in another one. That I got familiar with and actually worked on some cases. Bob Shutan, who later it was Shutan and Trost, and I got Ron Trost involved working in the commission's work

00:30:58.589 - 00:31:18.439

on the reorganization chapter, and he worked with Larry King and me. I had had some experience with him, but I formed some ideas that really came into play in my drafting. We had a case over in Arizona called Legend City. And we were

00:31:18.449 - 00:31:32.069

trying to prevent the chapter proceeding going forward. It was Chapter 10. And I thought it was a terrible waste of time to have to litigate over the good faith of the filing and whether or not it was insolvent, and that carried over, and I'm probably the

00:31:32.069 - 00:31:47.359

one more than anyone that persuaded the commission in '73 not to go down that route. So we don't have any predicate for filing a petition. It was always my belief that if you filed a petition, that they weren't insolvent before, they sure were at the time

00:31:47.359 - 00:32:08.660

you filed it. So there's some interesting things that come about through your experiences. For example, we handled one of the first large discount cases. Bob Shutan was the attorney for the debtor, and my partner Joe McGary got us involved, and Joe had no knowledge of bankruptcy.

00:32:08.780 - 00:32:27.869

Neither did I really, and he got the wrong form from Colliers. He used the form for a Chapter 10 petition. He had the Chapter 11 petition judicially approved and that defaulted every lease because all of the leases which were poorly drafted provided that the approval of

00:32:27.869 - 00:32:44.579

a petition would result in a breach, would allow termination. So I read ahead in chapter and found that out and I said in Collier, I said, Joe, we've just defaulted all these leases. We don't have any client to reorganize. They've lost their 13 stores and. So

00:32:44.579 - 00:33:00.979

we got a nunc pro tunc order setting aside the order of approval, and we didn't need any order from the court with a Chapter 11 and the case continued. Now we almost malpracticed and we narrowly avoided. I wonder what happened to the poor attorney for the

00:33:00.979 - 00:33:21.859

landlords that drafted it, not broadly enough, but just focused on Chapter 10. 1 of the things, Randy, that was really different was this controversy between chapters 10 and 11. A Chapter 10 case, corporate reorganization, was not referred to referees. It was handled by the district

00:33:21.859 - 00:33:39.140

court, and in the Chapter 10 cases there was a mandatory trustee and very strict application of disinterestedness so that if you were an attorney that was called into a company and you said you know you really need to be reorganized and the appropriate vehicle would be

00:33:39.140 - 00:33:52.949

Chapter 10. And the company did file a Chapter 10, you were disqualified. You were no longer disinterested, so you could not represent the company or the trustee rather, I should say, and the board of directors would say, well, what happens to us in Chapter 10?

00:33:53.819 - 00:34:08.770

And you'd have to say, well, you're going to be superseded by a trustee or trustees, and generally there were 3 trustees. And tell me again why it is you needed 3 trustees. Well, there was 1 for the Democratic Party and it was largely political, and

00:34:08.830 - 00:34:24.169

one of the problems with Chapter 10 is most of the appointees were lawyers who generally didn't know what to do with the businesses, so the success rate was not so great, but this battle went on about which chapter you should be in. And one of the

00:34:24.169 - 00:34:42.330

things that changed dramatically, I think really starting in the 60s and into the 70s, was taking public companies and putting them into Chapter XI and then the SEC would come in immediately and say, what are you doing? This case doesn't belong in Chapter 11 because theoretically

00:34:42.330 - 00:34:58.899

in Chapter 11 you could not affect secured creditors, you could not affect equity. You couldn't do a. All you could affect were unsecured creditors, and what we did basically is we recreated Chapter XI by saying no, you know, when we found out you could stay secured

00:34:58.899 - 00:35:15.449

creditors, and the Supreme Court said you can you can stay remedial actions. And in the continental Illinois, Chicago, Rock Island it was 18 months. Well, 18 months was a long time in those days. You could stay them. And then you could issue more equity as long

00:35:15.449 - 00:35:29.449

as you had authority under the code, under your corporate charter. So we got into these battles with the SEC and those motions weren't determined by the referee. Those motions had to go to the district court and we had this incessant fight all the way through the

00:35:29.449 - 00:35:44.409

60s into the 70s as to what chapter you could be in. And there was a man at the SEC by the name of Aaron Levy and he was so pro SEC. Every case they would come in and say you've got to convert. And in the retail

00:35:44.409 - 00:35:59.360

cases we had a great scheme. You'd file a case and normally you would file in the fall and the SEC would come in and you'd say, well, maybe you could convert it, but you don't want to do that because we'll miss the Christmas season and in

00:35:59.360 - 00:36:13.139

retailing Christmas is so important and normally Aaron would not agree, so we'd have to go to the whole commission and you'd get a deferral until after Christmas. Well, the Christmas season never was that good, so you go back and say you really can't make the motion

00:36:13.139 - 00:36:27.560

to convert until after Easter because Easter was a big season. And then there was the 4th of July. So if you were lucky, you got a year in and you proposed a plan, but that was a real battle and right up when the commission All the

00:36:27.560 - 00:36:39.909

way, actually all the way through from the '73. To 78, there was a real battle with the SEC as to what the role of the SEC was going to be and so on. Why don't you tell the story about the bill going over to the Senate,

00:36:40.229 - 00:37:00.149

right. I think starting in the fall of '72, we'd have lunch with a fellow named Grant Guthrie and Aaron Levy near the commission where I worked, its office. It'd be Frank and me and usually another one or two of the staff, sometimes a member of the

00:37:00.149 - 00:37:27.520

commission. Although Harold couldn't stand them, and they would make their views known, and we were very sympathetic. They were highly regarded, the commission, the SEC, but this particular group, which was the corporate regulation which Aaron Levy headed, really loved these Chapter 10 cases, and I got

00:37:27.520 - 00:37:43.030

to thinking about it. Why do they love it so much? I charted where they had appeared in cases, and I think I may have it in one of the footnotes to the report of the commission. It turned out that when I charted that it would go

00:37:43.030 - 00:37:58.080

up really high in the 5th District. At that time it was the 5th District circuit because New Orleans was there and it turned out that Aaron Levy absolutely loved to be down in New Orleans, so he would see that all the efforts of the commission were

00:37:58.080 - 00:38:17.060

primarily directed towards New Orleans. In any event, we had a meeting out in. The spring where we were putting the final touches on our proposals and the commission at that time decided to give the functions of the SEC to this new independent agency we were

00:38:17.060 - 00:38:34.239

trying to create which became the US Trustee Program, although it's not quite what we had in mind. And before we got back, uh, Aaron Levy had heard about it and was calling Frank, and I'll never forget hearing him just tear Frank apart. He said, Frank, you've

00:38:34.239 - 00:38:47.310

disemployed me. What am I going to do? And all Frank could say was, well, well, Aaron, you can move over to this new agency. It'll be the same. They're going to have those functions, but it didn't help Aaron at all. And Aaron and Frank

00:38:47.310 - 00:39:06.429

had been kind of close. They were both Sterling professors at Yale, and but it was a very interesting footnote to what happened. With the commission because in the mid 90s the Longstreth report actually persuaded the commission not to perform its usual function that

00:39:06.429 - 00:39:23.510

it had for many years because this had gone to the US trustee and to have more of an amicus type program. So that was the final touch. But one of the outgrowths of this whole thing was Randy mentioned before that he's been trying to find the

00:39:23.510 - 00:39:41.800

legislative history behind the examiner provisions in the bankruptcy code, and it just doesn't exist because in '78 when the bill went up from the house over to the Senate. The SEC found out that the bill was going over. And they raised a real stink about it.

00:39:42.489 - 00:40:00.389

And the way that the SEC was mollified, I'm told, was that in the cloakroom of the Senate there was an agreement that the commission's view was how can you expect the debtor in possession to investigate itself. That that's never going to happen, so we have to

00:40:00.389 - 00:40:21.209

have somebody who in the appropriate circumstances will examine the prior acts and under old Chapter 10 there was a provision for an examiner. In old Chapter 10, you got a mandatory trustee or trustees if the liabilities exceeded $250,000. Think about that, $250,000. If the liabilities were

00:40:21.209 - 00:40:41.600

less than $250,000 the court had the discretion to appoint an examiner. And in my research, there was only one examiner appointed between 1938 and 1979, and that one examiner was Charlie Seligson. In a case called Nazareth Fairgrounds, and that case lasted for 20 years. So you

00:40:41.600 - 00:41:02.060

begin to wonder, is an examiner a good idea? Harvey, why is it that in the 50s, 60s, 70s, into the 70s, and even into the 80s, really. Only small firms handled debtor cases. You had Levin and Weintraub and Crames. You had Stutman, Treister and Glatt, which

00:41:02.060 - 00:41:21.810

was a boutique firm. Why is that? Why didn't the big firms get involved? First, I would say in the 60s and certainly into the 70s, bankruptcy was not considered a really prime area for practitioners. First place, we had the spirit of economy. Many people don't remember

00:41:21.810 - 00:41:39.989

the spirit of the economy, but the theory was that you could not charge in a bankruptcy case what you would charge a private client. So there was like in the Southern District was almost a normal 15% discount. Secondly, until I would say the latter part of

00:41:39.989 - 00:42:00.189

the 60s, mid 60s, generally the cases were relatively small, and the Wall Street law firms represented institutions and to represent. A lot of the bankruptcy cases came out of the New York Garment Center, retail manufacturing cases and that type, and restaurants which you really, you really

00:42:00.189 - 00:42:14.729

can't reorganize, they just go out of business, so the Wall Street firms were really not interested in. I started out really as a creditor's lawyer. It was partly though because they considered the practice to be grimy, didn't they? Yeah, it was not, you know, you

00:42:14.729 - 00:42:29.685

went to a cocktail party and somebody said to you, What do you do? And you say, I work in bankruptcy, and you found yourself standing alone in the corner, or you went bankruptcy. Let me add a footnote. To this, the major Wall Street law firms were

00:42:29.685 - 00:42:46.804

the reorganization bar prior to the Chandler Act amendments and prior to what Justice Douglas did when he headed up the Protective Committee study. During the 30s, there was a study by the SEC. It was mandated under the, I think it was the 34 Act, and Justice

00:42:46.804 - 00:43:05.729

Douglas, who was then a professor, headed that up. He became a commissioner and later chairman of the commission and then was appointed. By Roosevelt to the Supreme Court. So and then he got to implement what was in his report, but in any event, he castigated these

00:43:05.729 - 00:43:28.530

large law firms, Cravath and others, and it was a very severe criticism of the inherent conflicts. He viewed the reorganization bar as being in cahoots with the Investment people, the underwriters. Swain was one of the principal witnesses opposed to the Chandler Act, right? And there were

00:43:28.530 - 00:43:45.449

a series of articles that were written and as a result of that severe castigation, they just abandoned the practice. Well, Swain's, if you read Swain's testimony, his position was The government shouldn't be involved in this, that the investment banking community had done a good job in

00:43:45.449 - 00:44:02.469

railroad reorganizations. They should just leave it alone. And the fact of the matter is that the National Bankruptcy Conference, which had proposed legislation, Douglas got all upset about it and said corporate reorganization really doesn't work, and old Chapter 10 was really drafted by the SEC. So

00:44:02.469 - 00:44:21.449

it was, but you're right, it was considered a grimy practice and, a lot of litigation related practices were not in the Wall Street law firm's vernacular, and it wasn't until Really into the 80s that you started to see that when I went to

00:44:21.449 - 00:44:43.129

Wild Gotshal and started a what we call a bankruptcy restructuring practice, I'll never forget the interview that I went to with Wild Gotshal, and what happened was that the senior partner at Seligson and Morris had decided to retire and Charles Seligson said, what do you

00:44:43.129 - 00:44:53.510

think we should do? And we were working on the salad oil scandal at the time, and I was working very salad oil case was the Ira Haupt case. Yes, is that right? Yes, it was a whole bunch of cases. Ira Haupt was the lead case, and

00:44:53.510 - 00:45:05.669

we were suing the Chicago Board of Trade and the New York Products Exchange, and we were working very closely with attorneys at Wild Gotshal, so it was a natural combination. But when I went there and I was interviewed by their executive committee, they said, what kind

00:45:05.669 - 00:45:19.469

of practice is this? And Wild Gotshal was just starting to grow, and I said, I explained it and I said, sometimes, you know, you represent a trustee or you represent a debtor in possession, and it's conceivable, it's hard to think of it, but you know, sometimes

00:45:19.469 - 00:45:32.370

banks make mistakes, they do bad things, and the executive committee said, no, it can't be. And they said, you actually sue a bank. And I said, sometimes you have to, it's your fiduciary duty, and they said, oh, we wouldn't, we would not want to do that.

00:45:33.229 - 00:45:47.729

And I said, Why? Well, it'll offend the banks. And I said, Do you represent any banks? They said, no. So I said, What's the problem? So I started this practice with Professor Seligson, and we decided up front that we were going to represent both debtors and

00:45:47.729 - 00:46:07.290

creditors wherever possible in the same case, but not too often. Cases would move a lot faster that way and when the 70s started, uh, we had just finished the going public binge in New York in the, in the 60s. It wasn't, they weren't called

00:46:07.290 - 00:46:25.030

IPOs. It was going public. If you had a million dollars of volume, you could go public. Forget about whether you had profits or not. And those cases started to disintegrate. A lot like the 90s. It hasn't changed at all, and those companies started having problems. And we that's when

00:46:25.030 - 00:46:37.989

I really started doing a lot of debtor work and along came 1975 which was the first billion dollar chapter 11 which would you say that that was the beginning of kind of the modern era, the WT Grant case was the beginning of the modern era.

00:46:38.070 - 00:46:53.909

You know, in the 60s, you rarely saw a bank in a case. It was really a relationship kind of a situation. The trade creditors had done business with the company for a long time. They were very interested in the company reorganizing because they wanted a customer.

00:46:54.580 - 00:47:09.540

So and there there was a big practice, Randy, without going into court in New York. We had a credit adjustment bureau for every industry, and what debtors would do is they would go to this adjustment bureau which would set up a meeting and they'd tell

00:47:09.540 - 00:47:24.310

their trade creditors, look, I had a bad year for some reason, and I need your support now. And we would do common law compositions, but those were conditioned upon getting like 95% of the creditors to go along. And then I kept saying, well, why don't we

00:47:24.310 - 00:47:40.169

do chapter 11? And that's when we started doing Chapter 11 cases and they started getting bigger. And then in the beginning of the 70s, as banks were expanding, they were extending loans. And in around I think it was 1973, the phenomenon was the real estate investment

00:47:40.169 - 00:47:56.810

trusts. If people remember the first oil embargo. The real issue in the United States when Jerry was growing up was what are Americans going to do with their leisure time. No American is going to work 5 days a week. Maybe 3, maybe 4. So what are

00:47:56.810 - 00:48:13.649

they going to do with their leisure time? Well, these real estate investment trusts came along, and what they were doing is they were building recreational vehicle parks. Second home developments in very odd places and people were buying Winnebagos. Winnebagos got 1.5 miles to the gallon and

00:48:13.649 - 00:48:31.389

along came this oil embargo and all these construction and development reefs. Which was sponsored by banks in many cases, started to fail. And I think we're starting in, I think '73, I filed the first associated mortgage investors. And for the first time you saw a

00:48:31.389 - 00:48:49.959

syndicate of banks. And you also saw public bondholders, so we were getting a new set of constituencies in the Chapter 11s. And my theory is that the banks began to learn how Chapter 11 worked. And if you go back to the '78 statute, the banks were

00:48:49.959 - 00:49:06.919

big supporters of Chapter 11 at the time, but the issue was they were unsecured. And what's happened since '79. Today they found the Uniform Commercial Code. Somebody told them where it was, and they've now taken collateral and they've changed the whole dynamic of Chapter 11. Did

00:49:06.919 - 00:49:19.959

you see that REIT phenomenon out west? I would assume in Arizona that must have been going on to some extent too. You know, I don't recall. I know we had problems with the REITs and they were devastated, but I don't think we had any located

00:49:19.959 - 00:49:41.159

in Arizona. Do you think competition for business was as fierce then as it is now? Well, I'm really not a good one to ask. Arizona still is kind of off the mainstream, but we have a very good bankruptcy bar and we'd like more cases. If you'd

00:49:41.159 - 00:49:53.689

let us have some, Harvey in New York, it took me a long time to find the venue statute in New York they they fought over who was going to run the committee and who was going to be counsel for the committee and so forth and who

00:49:53.689 - 00:50:10.250

was going to be counsel for the trustee. Is that fair to say? Oh yeah, and it was pretty cutthroat as I understand it. Well, before the Bankruptcy Reform Act, the way it operated was the debtor's attorney would call a meeting. The creditors and ask for the

00:50:10.469 - 00:50:28.100

selection of a creditors committee and then you'd go to the court to get it officially appointed, but some debtors' attorneys were very clever in who they invited to the meetings. And I remember the WT Grant creditors meeting which was held in the Americana Hotel

00:50:28.100 - 00:50:49.919

in New York and there were 3000 creditors showed up. It was fantastic and it was the only Chapter 11 case that Wachtell Lipton filed. And Leonard Rosen was the attorney in charge of it, and there were garment manufacturers and there were manufacturing, it was, it

00:50:49.919 - 00:51:06.250

was a it was a zoo. And one of those cases actually ended up with a 45 person creditors committee, but the purpose of the meeting was the jockeying for who was going to represent the committee. That meeting started at 10 o'clock in the morning and ended

00:51:06.250 - 00:51:22.570

at 1 a.m. And it was people calling each other, you baboon, get off the stage. It was that's why we needed plans. I mean we needed a statute to say how you appoint the committee, but that was what was going on. But Grant

00:51:22.570 - 00:51:40.760

was, I think, a breakthrough because. It was dominated by a syndicate of banks that had $640 million. In 1975 $640 million was a lot of money, so they ended up having, and it was a real tough fight, 6 members on the committee and 5 trade creditors.

00:51:41.649 - 00:51:58.659

And we used to start creditors committee meetings in Grant at 7:30 in the morning. And generally we'd end around midnight and you could sit there all day and watch the sandwiches in the corner curl up in the grand boardroom and that became a prototype for those

00:51:58.659 - 00:52:16.620

cases. The banks generally went in and they wanted control of the committee. So Jerry and Harvey, Did you have, I think you've indicated that in the Chapter 10 cases they were usually the trustee was usually a lawyer. Was there, was there a turnaround business

00:52:16.620 - 00:52:34.179

at all back in those days? Did you have people who were turnaround managers and specialized in it? No, we didn't have, we, we did not have what you call today the turnaround Management Association. We did not have CROs. What happened was a trustee or trustees would

00:52:34.179 - 00:52:50.239

come in. They would try to find an attorney like Charles, like Sydney Krause who knew what they were doing, but they generally worked internally with the people there. The problem with Chapter 10 is nobody wanted to go into Chapter 10. So, and we're beginning to

00:52:50.239 - 00:53:08.219

have that problem today. Companies would stay out. Until there was basically nothing left to reorganize. Many of the Chapter 10 cases turned out to be liquidations. Occasionally I was brought up working on Chapter 10 cases. We had a Chapter 10 case. It was a real estate

00:53:08.219 - 00:53:21.850

company. If you had real estate, you know, you could touch it. It was tangible and real estate was cyclical. And if you could hold out in the cycle, and we did, it was a company called the Small Investors Real Estate Plan, which was basically a fraud,

00:53:21.899 - 00:53:35.360

but it was we owned a lot of real property in and around New York. And it turned out it took a little while, 6 years, but 3/4 of the cases turned out to be solvent. But many of the Chapter 10 cases went on for years and

00:53:35.360 - 00:53:49.800

years. I don't remember. I think you may have done a study, Jerry, how long they. No, I didn't. They were very long and very often liquidations, but they were very comprehensive. You remember in Chapter 10, you could not propose a plan until the trustee proposed a

00:53:49.800 - 00:54:05.310

plan. Or the trustee filed a report as to why he or she could not file a plan. So when did the turnaround management business, I mean, who was it? Could you pinpoint when that started, that trend started in the in the end of the 1970s and

00:54:05.310 - 00:54:26.639

going into the 1980s, they weren't called turnaround people. Creditors got upset with the the debtor in possession concept and said, mostly financial institutions, we want a responsible officer. And nobody defined what a responsible officer was or is, except that it was an independent person.

00:54:27.389 - 00:54:42.800

And what we began to see in cases was this demand for a responsible officer. And then somebody challenged it, and the courts held you cannot have a responsible officer if you're not satisfied with the debtor in possession, you have an option. You're going to have a

00:54:42.800 - 00:54:56.469

trustee, but you can't delegate the obligations and duties of a debt in possession to a responsible officer, and there are a few cases on that, the Gas Light Club in New York and a few others, and that was the end of it. And then when

00:54:56.469 - 00:55:17.510

we started filing cases in Wilmington, Delaware, and it became the Chapter 11 capital for a while, this concept of a CRO came up. And it was sort of a morphing from the accountants for the creditors committee to Jay Alix and companies like that

00:55:17.750 - 00:55:32.229

saying, well, we want to go in and really take over the management. And that became the CRO concept. It was really started though by Victor Palmieri and some of the earlier cases. Penn Central. Penn Central was probably the earliest one. And then Victor formed Palmieri Associates

00:55:32.229 - 00:55:52.879

and offered his services, and I think there was a case out in the West Coast Financial Services. Sandy came in, but it's now CROs are just almost normal. So Jerry. Is reorganization practice better now than it was 25 years ago, both professionally and

00:55:53.110 - 00:56:15.199

and otherwise? You know, I think it's too adversarial. I don't know how we Prevent some of that, but it has become very adversarial. The cases that at least I've been involved with, I don't know if Harvey's had some that weren't adversarial, but You know, one of

00:56:15.199 - 00:56:33.800

the problems is if you have some Fraud or anything like that. How do you deal with it? How do you investigate it? We don't want a trustee apparently, but we don't want to leave the investigation to the existing board and the officers. What do you do

00:56:33.800 - 00:56:51.070

with that? Harvey's had some experiences in that area. How do you solve that? I agree with Jerry. It's become terribly adversarial and terribly expensive as a result. Well, you were saying is it a good practice remuneratively. It has gotten very good. I mean, if you start

00:56:51.070 - 00:57:08.969

looking and start tabulating the fees today, they've really gone out of whack. I mean, it used to be that. The creditors committee's fees were like 25% of the debtor's fees. Not today, not anymore, and there are so many specialists today. I think we create specialists for

00:57:08.969 - 00:57:31.510

the cases. The adversarial nature of it is that the relationships have changed and today we're going through a real evolution. Major changes was the '91 change in the rules which allowed the free trading of claims. Claims trade with velocity and volatility that's amazing. You never know

00:57:31.510 - 00:57:55.840

who the creditors are sometimes. And now we have hedge funds. Hedge funds are very aggressive, short term horizons, very different objectives than you might look at historically, and people have they've learned some catch phrases equitable subordination, breach of fiduciary duties, fraudulent transfers. And it is so

00:57:55.840 - 00:58:11.699

expensive to litigate. That there are a lot of coerced problems. I think one of the big problems is we've never grappled with the valuation problem. We talk about the absolute priority rule, but nobody ever asks for a valuation. You know, it's very interesting. We talk about adequate

00:58:11.699 - 00:58:29.739

protection. What are you protecting against? You've never established the value that may be eroded. So that valuation problem, which is not a science, permeates the case. And today, for example, all of a sudden in the last two years there's been a reinstatement of equity committees. We

00:58:29.739 - 00:58:44.780

didn't have equity committees for a long time. Now we're having equity committees because people come in and say, well, if we can pursue these lawsuits, there will be enough value for the equity. And we get involved in a lot of a lot of litigation. What do

00:58:44.780 - 00:59:03.290

you think, Jerry, the practice is going to look like in 20 years? You know, it's hard to tell. What we really have is a system whereby various economic interests can be resolved, and that system is very flexible. I would not have fully predicted where we are

00:59:03.290 - 00:59:19.679

today. I just knew that there was going to be something happen that was not foreseeable at the time we changed the law, and I really don't know. Here you have the CROs coming in and running. They're hired. You don't have disinterestedness problems. You don't even have

00:59:19.679 - 00:59:39.679

disclosures in some courts, but they're really the trustee that's come in. The secured creditors are comfortable with whoever it is. They kind of run the operation. I didn't see that coming. So it's terribly difficult to predict. I'll tell you one thing though. We've got to get

00:59:39.679 - 00:59:58.794

costs under control. It really has become very expensive and only the major corporations can really afford to reorganize under the bankruptcy code. I think we'll go back to the days. We're going to see a lot more out of court resolutions. Maybe some states will begin to

00:59:59.175 - 01:00:14.939

improve their old assignment provisions. We have, we're almost out of time, but I want to ask both of you first, Jerry, I want to ask you what was your greatest accomplishment? What was your greatest disappointment in your career? Hm. I don't know that I have any

01:00:14.939 - 01:00:35.120

great accomplishments. You survived, but probably one of the most fun things I did was with John Flynn, who had tried 128 1st degree murder cases. We tried a case before then Superior Court Judge Sandra Day O'Connor for 15 weeks. The litigation actually, she was in the

01:00:35.120 - 01:00:49.709

second wave of the litigation. It was the Bialac cases. It's a famous lift stay case under the bankruptcy laws out of the Ninth Circuit was part of it. But Newman Porter with Evans, Kitchel and Jenckes was on the other side, and he and I were involved

01:00:49.709 - 01:01:07.620

in this dispute for 23 years. Started in 1966. We've been up the circuit twice. We've been through Justice O'Connor and gone up to the Court of Appeals, and then there were chapter cases. There was originally a chapter Roman 11 and then a chapter 11, and

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finally Newman joined our firm, so we both got out. And it was the best thing that ever happened to me. I just want to say one thing, Randy. The big change, I think that is, you have to answer my question. I am going to answer. I

01:01:20.560 - 01:01:36.510

just want to say one thing. Taking away discretion from the bankruptcy judges is a bad thing. This statute worked because we had good bankruptcy judges who could flex the statute to meet the demands of particular cases. As Congress keeps taking away discretion, that's going to hurt

01:01:36.510 - 01:01:50.270

the system and we're going to go back to the 60s where the last thing you wanted to do was go into bankruptcy. I'd want to second that. It's extremely important that the judge has the ability to deal with it. We have a fairly flexible framework, and

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when you have rigidly applied rules by the requirement of how you construe things, it just becomes a nightmare. OK, OK, I think it's very hard for me to say one particular thing. Because I've had a great career. I think probably the most challenging case for me

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was Texaco because there was so much antagonism in that case with this $13 billion judgment and to be able to turn that around, and I think we did it in 11 months there was 2 years of preparation, but that was a great accomplishment. Great satisfaction came

01:02:28.639 - 01:02:48.000

out of that case. My biggest disappointment, and I carry a scarlet A on my underwear. I and I think I was wrong, but I did this anyway, the Leslie Fay case, which was an issue of conflicts and disclosure, and which I really

01:02:48.000 - 01:03:04.739

thought we were right. I wasn't handling the case, but I, I handled that argument, and it was before Judge Brosman, and I remember before the argument and I was on vacation in London and I spent the entire vacation in my hotel room. Writing my argument

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and redoing it and redoing it and it was a long argument. The US trustee was the adversary, Arthur Gonzalez, and the issue was whether we had properly disclosed representation of some of the directors. And Judge Arthur was the US trustee, and he argued against it. I

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argued for about 3 hours. He argued for about 20 minutes, and then Judge Brozman took a couple of months to write the decision. It was a long decision, and I lost, and I thought, how could I have lost that case? I've rethought that and I've come

01:03:40.340 - 01:03:51.889

to the conclusion Judge Brozman was right. But I'll tell you a little story about that. I'm sitting in my office one day and the phone rings and it's the FBI. And they're calling me. We have an application here by a man named Gonzalez to become a

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bankruptcy judge, and you've been given as a reference. And I said, he gave me as a reference. And they said, Well, what do you think of his legal ability? So I said, I didn't think much of it, but the judge loved it. He got the job.

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Thank you, Jerry. Could I tell one last little anecdote about Harvey's Texaco case? They were up in White Plains and Judge Schwartzberg had the case and they were trying to get some things resolved and then Harvey was there and I think maybe Ken Klee was there

01:04:22.429 - 01:04:40.209

was on the scene by then representing Pennzoil, and you remember in those days Texaco had Arnold. No, Texaco had. Who was the golfer they had Bob Hope, Bob Hope, who played once in a while, and the doing the ads for Pennzoil was Arnold Palmer.

01:04:40.300 - 01:04:55.139

So Schwartzberg said, I'll suggest what we do. You look out my window here, you see a beautiful golf course. Let's just get, Hope and Palmer out here and we'll settle this real quick. a round of golf. Well, thanks to our moderator Randy. Thank you, Randy

01:04:55.139 - 01:05:00.590

Newsome and two individuals who are legends of the law, Harvey Miller and Jerry Smith.