Legal Briefing: Business Bankruptcies Decline Sharply
Business Bankruptcies Plunge in February, Year Over Year
Only five public companies filed for Chapter 7 or Chapter 11 bankruptcy in February 2010, continuing a recent downward trend in business bankruptcies. That's down from 19 in February of 2009. Bankruptcies have not only decreased but the companies filing them are getting smaller. Billion-dollar bankruptcies represent 19% of claims filed this year, down from 25% last year.
However, the news isn't all good. Rather than reflect healthier companies over all, the decrease seems to result from better market financing opportunities, enabling weak companies to stave off bankruptcy by raising high-yield capital, renegotiating deals with lenders and doing debt exchanges. If credit markets tighten or lenders become less accommodating, bankruptcies could again surge this year.
Toyota Takes On Its American Critics
After lots of apologizing in the past days, Toyota (TM) is now going on the offensive. Monday at noon it will webcast a presentation by Stanford University scientists that Toyota believes will refute the claims of a Southern Illinois University professor that Toyota's electronics can cause sudden acceleration problems. Toyota continues to deny sudden acceleration can be caused by its electronics. The carmaker will also release data suggesting that "whistleblower" Dimitrios Biller is mentally unstable and had negative job reviews from employers other than Toyota.
While America's consumer protections could certainly be much stronger, at least we can feel safer than Japanese consumers. A New York Times article explains how Japan has a history of protecting industry over consumers, a bias that continues today with respect to the Toyota sudden acceleration issue. Not a single Toyota car has been recalled in Japan for this problem, despite at least 99 reports of sudden acceleration that resulted in 31 accidents.
Crime Labs Aren't Like CSI
North Carolina's state crime lab is under investigation by the Federal Bureau of Investigation, potentially affecting cases from the 1990s to the present day. Shoddy practices at the lab produced flawed evidence that may have led to the conviction of innocent people.
The investigation was initiated because of one documented case of a false conviction. Gregory F. Taylor spent 16 years in jail for a murder he didn't commit because, in part, the crime lab said a substance on his truck was blood, a point the prosecution emphasized at trial. However, the lab knew from its testing that the substance was animal blood, not human, and was thus irrelevant in the case. The technician had been instructed to keep quiet about that detail.
Unfortunately for defendants, problems at crime labs are far more common than the CSI/NCIS-watching public is likely to believe.
And in the Business of Law...
Only 100 (or 110 depending on how you count) attorneys lost their jobs in February. However, that doesn't mean the employment market for attorneys is good; far fewer job openings exist for new graduates than in past years.
If you're Google's (GOOG) top attorney, however, you're doing great: He earned more than $2 million last year.
Don't try to impress your law firm by overbilling your client. Mark J. McCombs billed Calumet Park, in his childhood neighborhood, over $1 million for work he never did and now faces criminal charges. Other municipalities he represented are checking his billing records too.