All posts in Current Events

Off-topic but fun: Tesla shareholders prevail against Musk $55 billion bonus.

I mentioned a few times to my UWLA Business Assns students last semester that there was a pending derivative lawsuit by some Tesla shareholders against Elon Musk that went to trial in Oct 2022 but no decision to date.  Well the decision came down yesterday and it was against Elon Musk. 

I really expected it to go the other way.  The 201 page decision is here.  As we learned, it is a duty of loyalty and care issue as to Musk since something is going from the corp into his pocket (a lot of stock), and a duty of care issue as to the rest of the board.  As to loyalty, the transfer to him is presumed to be unfair to the corp unless he did not participate in making the decision.  He argued that he did not and further, the bonus program was approved in advance by disinterested directors as well as disinterested shareholders.  Based on that, he argued that it was the unhappy shareholders’ burden to establish that the transaction was not fair to Tesla.  

The court, after taking testimony for five days, and considering 1700 exhibits, (and reading a few Musk biographies I think) found that the directors were not disinterested, and the shareholders were misled, at least enough to diminish the consequences of the vote, and therefore it was Musk’s burden to establish fairness which he did not do.  

I’ve just started working my way through the decision.  I’m going to prepare a case summary which I will upload which it is complete.       

Where have you been Hayes?

Good grief, I see that my last post was in December 2021. Since then there has been a lot of water under the bridge, or over the dam if you prefer. In early January 2022 I accepted a position as BAP Law Clerk to Judge Laura Taylor, then in San Diego, now retired. I quickly sold my practice to my partner Matt Resnik and began my new job on February 15, 2022. Since Judge Taylor’s term on the BAP was to end on December 31, 2022, I assumed and announced that I was taking a sabbatical for the remainder of the year expecting to return in early 2023. During that time, I became acquainted with Judge William Lafferty in Oakland, also a member of the BAP. Since his BAP clerk was retiring in April 2023, we agreed that I would become his BAP clerk on May 1, 2023. Nearing the end of 2023, I decided that a two year sabbatical was enough and advised Judge Lafferty that I wanted to return to civilian life and my consumer bankruptcy practice and he was graciously fine with that.

As a law clerk to a bankruptcy judge I was no longer free to opine on the great questions of the day as there was always some risk that someone would equate my opinions with the opinions of the judge I was working for so I stopped posting things on this list serve. I wrote only one article during that time, Demystifying Bankruptcy Appeals for the Los Angeles Times. It’s pretty good. I asked for Judge Taylor’s okay which was quickly given. She commented that the article was “breezy and very informative.” I was quite delighted with the comment.

The experience was a once in a lifetime deal. Most lawyers who clerk for judges do so early in their career. I waited 42 years to get a clerking job. My appreciation for the efforts of the judges increased many fold. I will speak more about it as things come up.

In the meantime, I have forgotten how WordPress works so please forgive my writing gaffs. I’m looking forward to rejoining the internet voices and hearing from you.

Good News – UWLA 2021 California Accredited Law School Annual Compliance Report

Email from Dean Jay Frykberg, Dean and Provost, University of West Los Angeles School of law

UWLA 2021 California Accredited Law school Annual Compliance Report

All,

I can report that UWLA has successfully submitted our 2021 annual CBE report. This report was dramatically different and much larger than any previous annual report due to changes from staff at the CBE (ie. student/faculty demographics, further disaggregated data based upon campus location and program, etc.) in fact this report was almost three times the size of previous annual reports and consisted of 33 files and 916 pages all of which was completed in only 23 days. This is also our first fully digital report that is accessible on UWLA’s share drive, that ensures that next year’s process will be even more efficient.

Thank you to each of you who contributed, especially to those that submitted print ready documents as requested, and an extra special and deeply appreciated thank you to Patty and Jesse both of whom were indispensable in the completion of this project. Not only did they complete their sections, but they also assisted in completing many more.

Jay

Response from President Robert Brown

Dean Frykberg, I would like to also extend my heartiest appreciation for the work completed by your team. I wish to note that your team submitted the report well  in advance of the requisite deadline. I also want to express my appreciation for the extraordinary efforts of Jesse Aldava and Patty White. Job well done.  Your contributions are recognized and appreciated. As you know this report is not only no small feat to prepare but it means everything in terms of our state bar accreditation and our relationship with the California Bar. Congrats!

I also want to salute Dean Frykberg for being named the Chair of the State Bar rules committee. What a fantastic and well-deserved honor. You mean that someone from UWLA is considered an “insider”? lol Thanks jay for your fabulous and ongoing leadership. You are an example for all of us to aspire to emulate. Will you please join me in saluting Jay and his team for their outstanding efforts and achievements?

Robert Brown

Congratulations to Everett Green

I learned today that Everett Green will be the new Chair of the Business Law Section of the California Lawyers Association.   Congratulations Everett.

Message from University of West Los Angeles School of Law (UWLA) President Robert Brown (total good news).

Dear UWLA executive management team, faculty and staff. While it is fresh in my mind, I want to circle back and commend our entire institutional team on the recent great achievements. After tremendous efforts and team work by  all, we have achieved amazing institutional victories and goals. I want to ask everyone to reflect on what we recently achieved and then re-direct your energies and efforts to the formidable challenges facing us this year.

  1. In February of this year, we hosted a WASC accreditation visit and were extremely successful in evidencing to the team, why we deserve to be re-accredited. Just as a reminder, this visit occurred because we received our initial accreditation two years ago, and WASC requires a backup visit within two years of the initial accreditation. Yes, it has been two years already since we received initial accreditation! Our entire team from the board of managers to our faculty and every staff person contributed to the successful re-accreditation visit. Dean Frykberg and Dean Brown, led our tremendous faculty and  staff in preparing an accreditation self-study that had over 7,000 pages of evidence. Our accreditation report from the visiting team had a number of outstanding commendations and in particular cited our faculty, Deans and the Board of managers and our CFO. We will attend the WASC conference in June to meet with the full WASC committee and we expect to receive full renewal of accreditation  based upon the WASC team report and their overall recommendation.  Great job team! Thanks Faculty and staff. Read more…

My interview with Judge Maureen Tighe

Some good articles in the Central District Consumer Bankruptcy Attorneys Association (cdcbaa) latest newsletter.  You can get it here.

How to pay the new District Court $25 fee

Email from Keith Higgenbotham

Dear Colleagues!

The District Court is currently finalizing its renewal application and plans to post it on its website with a link to a portal so that we can pay online using a credit card.  It plans to send out a Notice to its practitioners and to our Bankruptcy Court Clerk.  Once the Notice is received, our Clerk of the Court will send out its own Notice to all the bankruptcy CM/ECF users with a link to the District Court’s website and portal.  The District Court’s goal is to have the renewal application posted and the portal setup by the end of next week.

So some advice:

  1.   You do not need to send in a check to District Court with the hope that it will be applied correctly.

  2.  PLEASE do not send a check to the Bankruptcy Court since it has nothing to do with this fee.

cdcbaa member

Keith Higginbotham

Cathy Moran Oral History (and Happy Birthday Cathy)

It will always be one of the highlights of my business life that when I asked Cathy Moran if she would let me do her oral history, she said yes.  We met for two hours, two days in a row, at her office near San Jose, discussing her life and of course her views of the bankruptcy world and consumer bankruptcy practices.  She has a lot to say and every consumer bankruptcy attorney should listen to her.  We talked about her early days growing up on a farm in central California, helping her farm animal veterinarian father in his business, even helping him with surgeries here and there.  She went to Stanford undergrad and later Hastings Law school.  But it’s her comments on the practice of bankruptcy, 40 years worth, especially chapter 13, that people should listen to.  The audio of the oral history can be accessed here from the website of the Biddle Law Library of the University of Pennsylvania Law School.  Scroll down to find hers.  Listen to it on one of your walks.  The Biddle Law Library has had it transcribed but has not uploaded that yet.   Let me know what you think.

Her blogs, if you haven’t checked them out, are here and here.

By the way, Happy Birthday Cathy.  Keep yourself well.

Letter from BMW in SBRA case

This is kind of galling if you ask me.  I just got this letter from a “a bankruptcy servicing company” relating to new Small Business case I just filed.  What is the point, I wonder, of instantaneously and unilaterally discontinuing “online access, monthly statements, notification emails,” and the “easy pay program”?

Dear M J HAYES:

We are AIS Portfolio Services, LP a bankruptcy servicing company for BMWF Financial Services. BMW Financial Services received a notice of bankruptcy filing on the above referenced account. As a result, online access, monthly Account Statement mailings, statement notification emails and, if applicable, the Easy Pay Program, have been discontinued.

Please be aware this letter is not an attempt to collect a debt nor is it a demand for payment. The information below, including payment options, is being provided for informational purposes only.

If you wish to make voluntary payments, you may do so anytime using BMW Financial Services automated phone system, paying by check, bank bill pay, or Western Union.  For all payments made, please include your account number and remit to:

BMW Financial Services NA, LLC
PO Box 78066
Phoenix, AZ 85062
Toll free – 800 – 398 – 3939

If you have any questions, please contact a Bankruptcy Specialist at (888) 455-6662, Monday through Friday, from 9:00 a.m. to 5: 00 p.m.ET

Loyola Law Students Practicum Reception

Email from Keith Higginbotham:

To all my cdcbaa colleagues that answered the call and attended Judge Klein’s Reception for the six Loyola law students’ Practicum Reception, I wholehearted thank you.  Judge Klein was VERY pleased at cdcbaa’s response to her request for participation.  The food was excellent and there were four judges present to mingle with — including the Chief Judge herself.  A good time was had by all.

This is one of the many reasons why the Court is often turning to cdcbaa for participation and input in its various endeavors.  We are recognized as the BK Bar Association that “gets things done.”

Again, I am very proud of this organization and I thank the many cdcbaa members that attended this event yesterday.

Keith Higginbotham