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#bankruptcy
cryoverkiltmilk · 3 months
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One of America’s most corporate-crime-friendly bankruptcy judges forced to recuse himself
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Today (Oct 16) I'm in Minneapolis, keynoting the 26th ACM Conference On Computer-Supported Cooperative Work and Social Computing. Thursday (Oct 19), I'm in Charleston, WV to give the 41st annual McCreight Lecture in the Humanities. Friday (Oct 20), I'm at Charleston's Taylor Books from 12h-14h.
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"I’ll believe corporations are people when Texas executes one." The now-famous quip from Robert Reich cuts to the bone of corporate personhood. Corporations are people with speech rights. They are heat-shields that absorb liability on behalf of their owners and managers.
But the membrane separating corporations from people is selectively permeable. A corporation is separate from its owners, who are not liable for its deeds – but it can also be "closely held," and so inseparable from those owners that their religious beliefs can excuse their companies from obeying laws they don't like:
https://clsbluesky.law.columbia.edu/2014/10/13/hobby-lobby-and-closely-held-corporations/
Corporations – not their owners – are liable for their misdeeds (that's the "limited liability" in "limited liablity corporation"). But owners of a murderous company can hold their victims' families hostage and secure bankruptcies for their companies that wipe out their owners' culpability – without any requirement for the owners to surrender their billions to the people they killed and maimed:
https://pluralistic.net/2023/08/11/justice-delayed/#justice-redeemed
Corporations are, in other words, a kind of Schroedinger's Cat for impunity: when it helps the ruling class, corporations are inseparable from their owners; when that would hinder the rich and powerful, corporations are wholly distinct entities. They exist in a state of convenient superposition that collapses only when a plutocrat opens the box and decides what is inside it. Heads they win, tails we lose.
Key to corporate impunity is the rigged bankruptcy system. "Debts that can't be paid, won't be paid," so every successful civilization has some system for discharging debt, or it risks collapse:
https://pluralistic.net/2022/10/09/bankruptcy-protects-fake-people-brutalizes-real-ones/
When you or I declare bankruptcy, we have to give up virtually everything and endure years (or a lifetime) of punitive retaliation based on our stained credit records, and even then, our student debts continue to haunt us, as do lawless scumbag debt-collectors:
https://pluralistic.net/2023/08/12/do-not-pay/#fair-debt-collection-practices-act
When a giant corporation declares bankruptcy, by contrast, it emerges shorn of its union pension obligations and liabilities owed to workers and customers it abused or killed, and continues merrily on its way, re-offending at will. Big companies have mastered the Texas Two-Step, whereby a company creates a subsidiary that inherits all its liabilities, but not its assets. The liability-burdened company is declared bankrupt, and the company's sins are shriven at the bang of a judge's gavel:
https://pluralistic.net/2023/02/01/j-and-j-jk/#risible-gambit
Three US judges oversee the majority of large corporate bankruptcies, and they are so reliable in their deference to this scheme that an entire industry of high-priced lawyers exists solely to game the system to ensure that their clients end up before one of these judges. When the Sacklers were seeking to abscond with their billions in opioid blood-money and stiff their victims' families, they set their sights on Judge Robert Drain in the Southern District of New York:
https://pluralistic.net/2021/05/23/a-bankrupt-process/#sacklers
To get in front of Drain, the Sacklers opened an office in White Plains, NY, then waited 192 days to file bankruptcy papers there (it takes six months to establish jurisdiction). Their papers including invisible metadata that identified the case as destined for Judge Drain's court, in a bid to trick the court's Case Management/Electronic Case Files system to assign the case to him.
The case was even pre-captioned "RDD" ("Robert D Drain"), to nudge clerks into getting their case into a friendly forum.
If the Sacklers hadn't opted for Judge Drain, they might have set their sights on the Houston courthouse presided over by Judge David Jones, the second of of the three most corporate-friendly large bankruptcy judges. Judge Jones is a Texas judge – as in "Texas Two-Step" – and he has a long history of allowing corporate murderers and thieves to escape with their fortunes intact and their victims penniless:
https://pluralistic.net/2021/08/07/hr-4193/#shoppers-choice
But David Jones's reign of error is now in limbo. It turns out that he was secretly romantically involved with Elizabeth Freeman, a leading Texas corporate bankruptcy lawyer who argues Texas Two-Step cases in front of her boyfriend, Judge David Jones.
Judge Jones doesn't deny that he and Freeman are romantically involved, but said that he didn't think this fact warranted disclosure – let alone recusal – because they aren't married and "he didn't benefit economically from her legal work." He said that he'd only have to disclose if the two owned communal property, but the deed for their house lists them as co-owners:
https://www.documentcloud.org/documents/24032507-general-warranty-deed
(Jones claims they don't live together – rather, he owns the house and pays the utility bills but lets Freeman live there.)
Even if they didn't own communal property, judges should not hear cases where one of the parties is represented by their long term romantic partner. I mean, that is a weird sentence to have to type, but I stand by it.
The case that led to the revelation and Jones's stepping away from his cases while the Fifth Circuit investigates is a ghastly – but typical – corporate murder trial. Corizon is a prison healthcare provider that killed prisoners with neglect, in the most cruel and awful ways imaginable. Their families sued, so Corizon budded off two new companies: YesCare got all the contracts and other assets, while Tehum Care Services got all the liabilities:
https://ca.finance.yahoo.com/news/prominent-bankruptcy-judge-david-jones-033801325.html
Then, Tehum paid Freeman to tell her boyfriend, Judge Jones, to let it declare bankruptcy, leaving $173m for YesCare and allocating $37m for the victims suing Tehum. Corizon owes more than $1.2b, "including tens of millions of dollars in unpaid invoices and hundreds of malpractice suits filed by prisoners and their families who have alleged negligent care":
https://www.kccllc.net/tehum/document/2390086230522000000000041
Under the deal, if Corizon murdered your family member, you would get $5,000 in compensation. Corizon gets to continue operating, using that $173m to prolong its yearslong murder spree.
The revelation that Jones and Freeman are lovers has derailed this deal. Jones is under investigation and has recused himself from his cases. The US Trustee – who represents creditors in bankruptcy cases – has intervened to block the deal, calling Tehum "a barren estate, one that was stripped of all of its valuable assets as a result of the combination and divisional mergers that occurred prior to the bankruptcy filing."
This is the third high-profile sleazy corporate bankruptcy that had victory snatched from the jaws of defeat this year: there was Johnson and Johnson's attempt to escape from liability from tricking women into powder their vulvas with asbestos (no, really), the Sacklers' attempt to abscond with billions after kicking off the opioid epidemic that's killed 800,000+ Americans and counting, and now this one.
This one might be the most consequential, though – it has the potential to eliminate one third of the major crime-enabling bankruptcy judges serving today.
One down.
Two to go.
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If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2023/10/16/texas-two-step/#david-jones
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My next novel is The Lost Cause, a hopeful novel of the climate emergency. Amazon won't sell the audiobook, so I made my own and I'm pre-selling it on Kickstarter!
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politijohn · 1 year
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The Silicon Valley Bank failure is the latest example of corporations running politics. Democrats and Republicans, alike, supported banking deregulations inspired by financial lobbying efforts. Never mind hypocrisy at its finest.
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reality-detective · 1 month
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Is there a crash looming in the horizon? 🤔
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destiel-news-network · 3 months
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(Source)
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i learned that Lego was flirting with bankruptcy, and the release of Bionicle, which accounted for 100% of their profits in 2003, saved them from going under (x)
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euoniainquisition · 8 months
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took a small L today
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one-time-i-dreamt · 1 year
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ExxonMobil declared bankruptcy.
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memenewsdotcom · 8 months
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Yellow files for bankruptcy
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View On WordPress
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saywhat-politics · 2 months
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NEW YORK (AP) — A group of people and businesses who say they are owed money by Rudy Giuliani gathered virtually Friday for the first court hearing since he declared bankruptcy last month after losing a defamation suit to two Georgia election workers.
During a two-hour Zoom hearing, an attorney for Giuliani told a U.S. bankruptcy judge that the former New York City mayor lacks the funds to pay the $148 million he owes the election workers for spreading a conspiracy about their role in the 2020 election. Others with claims against Giuliani should expect to wait as well.
“There’s no pot of gold at the end of the rainbow,” the attorney, Gary Fischoff, said, noting that Giuliani was making his living as a radio and podcast host while dealing with a wide range of “financial issues.”
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miramaramora · 5 months
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Starbucks are zionists so here's their recipe that a former employee leaked 🤗
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Many locations are in inner cities where the poor, elderly, and marginalized will suffer.
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newyorkthegoldenage · 4 months
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Angry depositors gathered in front of the Clarke Brothers Bank, an 80-year old private institution at 154 Nassau St., which closed as bankrupt, ca. 1929. Unprecedented withdrawals caused the crisis, and the payment of 100 cents on the dollar was promised to the skeptical depositors.
Photo: Bettmann Archive/Getty Images/Fine Art America
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investmentees · 1 year
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The more info revealed about the FTX fiasco, the more pain the bag holders feel. Were you ever left holding a bag before?
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nodynasty4us · 30 days
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The cases listed in this February 26, 2024 roundup cover:
Donald Trump ballot eligibility
Whether Jan. 6 rioters (and Trump) can be charged with obstruction
Guns for suspected domestic abusers
Bump stock ban
Abortion medication restrictions
Emergency room abortions
Limits on social media posts
Blocking critics on social media
White House asking social media companies to remove misinformation
Power of federal agencies
Consumer Financial Protection Bureau
SEC tribunals
Opioid lawsuit settlement
Voting maps
Employment discrimination
Homeless encampments in public spaces
Trump tax cuts
Downwind industrial pollution
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crayistic · 7 months
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I have spent over £2k... on upcoming critical role meets for autographs and photos..... I will be moving into a cardboard box soon after. That is all.
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