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A Feast for Lawyers: Inside Chapter 11: An Expose.

A Feast for Lawyers: Inside Chapter 11: An Expose. Sol Stein. M. Evans & Co., $18.95. What purports to be a case study of three companies that filed for Chapter 11 is mostly an anguished personal account of what happened to the author's own company, Stein and Day Publishers, after it was forced to seek protection from its creditors.

Far from the "protection" that the bankruptcy law supposedly offers, Stein soon discovers that Chapter 11 has put him at the mercy of greedy lawyers, bumbling judges, and vindictive claimants bent on his destruction. The whole process has nothing to do with restoring his company to health or even with getting the best deal for his creditors. In the end, the poor man and his wife (she's Day) lose everything. The publishing company is sold off for a pittance, perfectly saleable books are prohibited from being sold, the authors have no recourse, the creditors are shortchanged, everyone involved has wasted time and money on silly motions and hearings, and Stein is a pitiable wreck who can't even cash a check at the grocery store.

In this "madhouse rather than a place of healing," which is how Stein comes to view Chapter 11, the only real winners are the judicial bureau- crats and, of course, the lawyers, who are cynically padding fees all along, the only skill at which they truly excel.

His company's legal bills for one year of Chapter 11, Stein estimates, exceeded those of a quarter-century of normal operations.

This polemic would be more effective if it weren't for Stein himself. Once he gets up a full head of outrage, he complains about everything, even that law firms play music over their telephones while they put him on hold. Eventually, he gets around to slamming his town's zoning board for refusing approval to turn Stein and Day headquarters into a housing development, which would have increased its value as an asset. As he rails against this "unconstitutional deprivation of property," you begin to suspect that Stein himself may be something of a first-class pain in the patootie.

As Stein stands to address one of his least-favorite lawyers with "Mr. Borri, when you've been in Who's Who for 30 years you can talk to me that way and not until then," you may even feel a stirring of sympathy for his numerous enemies. By now, you're not surprised that this innocent victim has, on page after page, managed to bring out the worst in so many people.

Still, in the end, the point is made: Chapter I I is a cure that's often deadlier than the disease; if a company was in trouble before it sought protection, it's a likely goner afterwards. If the whole Chapter 11 setup is based on the premise that it ought to be a punishment for people who can't pay their bills, then it works. Stein suffered! The lawyers collected for his sins! But then, that's money that might have gone to creditors or to keeping the business going.

What's needed, he argues, is a less combative arena for helping troubled companies figure out how to survive, similar to the no-fault proceedings that have taken some of the useless courtroom bickering out of divorce. Already there are turnaround experts who specialize in bringing companies back. Why not get them more involved in Chapter 11? At least put a cap on the legal fees.
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Author:Rothchild, John
Publication:Washington Monthly
Article Type:Book Review
Date:Dec 1, 1989
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