In case you’ve been waiting for a Virginia court to weigh in on the theory of “deepening insolvency,” that time has come.
The theory is a way of holding corporate directors liable for operating a financially strapped company in a way that only digs a deeper hole – penalizing them for not knowing when to quit.
“Deepening insolvency” has drawn a fair amount of academic debate since it first cropped up in the early 1980s, but the theory has been on the wane since a Delaware court rejected it last year.
U.S. Bankruptcy Judge Kevin Huennekens threw out the claim in a new case, In re James River Coal Co. (VLW 007-4-003). In JRCC, a coal company and its 21 subsidiaries sought to reorganize under Chapter 11. The trustee of a liquidating trust sued First Reserve, an entity that included major shareholders of the coal company and the managing general partner of the shareholder funds.
The trustee claimed that First Reserve and its directors, “by virtue of their overreaching, domination and control” over the debtors’ businesses, fraudulently or negligently “prolonged the corporation’s existence for more than three years.”
Huennekens said that application of the theory “would fundamentally transform Virginia law,” which does not require a financially challenged company to abruptly wind up its business and liquidate its assets.
“Simply because a business may be failing does not make the directors personally responsible for insuring the success of the business strategies they decide to pursue,” the bankruptcy judge said.
Thursday, May 3, 2007
Wednesday, May 2, 2007
Lawyers allowed back in Norfolk jail
The Norfolk jail has changed its lawyer visitation policy … again.
Now, lawyers can visit their clients behind bars in the cell blocks, so long as they sign a waiver form acknowledging the jail’s safety policies, reports The Virginian-Pilot.
The sheriff changed the policy last year to require lawyer-client meetings in visitation rooms after female attorneys complained about lewd comments and gestures. Under this latest policy, lawyers are required to report any "offensive language or behavior" to the jail.
Now, lawyers can visit their clients behind bars in the cell blocks, so long as they sign a waiver form acknowledging the jail’s safety policies, reports The Virginian-Pilot.
The sheriff changed the policy last year to require lawyer-client meetings in visitation rooms after female attorneys complained about lewd comments and gestures. Under this latest policy, lawyers are required to report any "offensive language or behavior" to the jail.
Tuesday, May 1, 2007
AG’s brief not persuasive in lesbian case
Virginia Solicitor General William E. Thro unsuccessfully asserted the sovereignty of the commonwealth in urging the U.S. Supreme Court to hear the appeal of a lesbian mother who is attempting to sever the parental rights of her former partner.
In an amicus brief in the case of Miller-Jenkins v. Miller-Jenkins, Record No. 06-1110, Thro cited four reasons the high court should hear the case: to reaffirm the sovereign power of the states over domestic relations, to reaffirm the public policy exception to the Full Faith and Credit Clause, to reaffirm the limits on congressional power to enforce the Constitution, and to provide guidance on the application of the Parental Kidnapping Prevention Act in the context of same-sex unions.
The couple left Virginia to get a civil union in Vermont in 2000. Lisa Jenkins-Miller was artificially inseminated in Virginia, and the couple moved to Vermont for a time before they separated and Lisa Jenkins-Miller returned to Virginia. She filed in Vermont to have the union dissolved and courts there awarded Janet Jenkins-Miller visitation rights.
Lisa then filed suit in Virginia to have the Vermont order invalidated as contrary to Virginia’s public policy against same-sex unions and adoptions. The Virginia Court of Appeals ruled that Vermont had jurisdiction over the custody case and that the parental kidnapping act controlled. That ruling is on appeal to the Virginia Supreme Court.
On Monday, the U.S. Supreme Court rejected the appeal from Vermont with no further comment.
In an amicus brief in the case of Miller-Jenkins v. Miller-Jenkins, Record No. 06-1110, Thro cited four reasons the high court should hear the case: to reaffirm the sovereign power of the states over domestic relations, to reaffirm the public policy exception to the Full Faith and Credit Clause, to reaffirm the limits on congressional power to enforce the Constitution, and to provide guidance on the application of the Parental Kidnapping Prevention Act in the context of same-sex unions.
The couple left Virginia to get a civil union in Vermont in 2000. Lisa Jenkins-Miller was artificially inseminated in Virginia, and the couple moved to Vermont for a time before they separated and Lisa Jenkins-Miller returned to Virginia. She filed in Vermont to have the union dissolved and courts there awarded Janet Jenkins-Miller visitation rights.
Lisa then filed suit in Virginia to have the Vermont order invalidated as contrary to Virginia’s public policy against same-sex unions and adoptions. The Virginia Court of Appeals ruled that Vermont had jurisdiction over the custody case and that the parental kidnapping act controlled. That ruling is on appeal to the Virginia Supreme Court.
On Monday, the U.S. Supreme Court rejected the appeal from Vermont with no further comment.
Judges’ complaint, prosecutor’s response detailed
The Virginian-Pilot has obtained the ethics complaint that Virginia Beach circuit judges filed against Commonwealth’s Attorney Harvey L. Bryant III and Bryant’s formal response to the complaint.
The judges said they were concerned about reports that Bryant had said at a Republican breakfast in February he was keeping a record of “illegal conduct” by Virginia Beach judges “until I need it.”
That wasn’t quite what I said, Bryant responded, and the comments were a small part of a broad-ranging discussion of his office’s activities and answers he gave to questions about the criminal justice system.
Bryant said in his response that he does keep track of when judges defer a finding of guilt “without statutory authority” when the evidence would support such a finding and that he would consider it appropriate to convey that information when judges come up for reappointment.
Judges and prosecutors long have been at odds over whether a judge can defer judgment in cases other than where there is specific statutory authority to do so. First-time drug offenses are one category in which the legislature has granted such authority.
Some judges contend that they have the inherent authority to take such action in the absence of an explicit prohibition. Drunken driving, theft and trespass are three categories of cases in which judges sometimes defer judgment and dismiss a charge if a defendant has no further legal difficulty. In February 2003, the Virginia Supreme Court rejected a request by a Roanoke prosecutor for a writ of mandamus or prohibition that would have required a judge to make a finding of guilt in such cases.
Bryant noted that comments at the breakfast were in the context of his observation “that I wouldn’t trade our bench for any other bench I knew of or had heard of my 32 years of practice in Virginia.”
The judges said they were concerned about reports that Bryant had said at a Republican breakfast in February he was keeping a record of “illegal conduct” by Virginia Beach judges “until I need it.”
That wasn’t quite what I said, Bryant responded, and the comments were a small part of a broad-ranging discussion of his office’s activities and answers he gave to questions about the criminal justice system.
Bryant said in his response that he does keep track of when judges defer a finding of guilt “without statutory authority” when the evidence would support such a finding and that he would consider it appropriate to convey that information when judges come up for reappointment.
Judges and prosecutors long have been at odds over whether a judge can defer judgment in cases other than where there is specific statutory authority to do so. First-time drug offenses are one category in which the legislature has granted such authority.
Some judges contend that they have the inherent authority to take such action in the absence of an explicit prohibition. Drunken driving, theft and trespass are three categories of cases in which judges sometimes defer judgment and dismiss a charge if a defendant has no further legal difficulty. In February 2003, the Virginia Supreme Court rejected a request by a Roanoke prosecutor for a writ of mandamus or prohibition that would have required a judge to make a finding of guilt in such cases.
Bryant noted that comments at the breakfast were in the context of his observation “that I wouldn’t trade our bench for any other bench I knew of or had heard of my 32 years of practice in Virginia.”
Virginia’s viatical settlements law upheld
Virginia’s law regulating viatical settlements has been upheld by a panel of the 4th U.S. Circuit Court of Appeals.
In a viatical settlement, a terminally ill patient sells a life insurance policy to a third party that picks up the premium payments and collects the proceeds when the patient dies, notes The Associated Press.
Virginia’s law requires a company buying policies to pay 60 to 80 percent of face value. A Texas-based company that paid 26 percent of a policy’s face value to a dying AIDS patient unsuccessfully challenged the Virginia regulatory scheme in Life Partners Inc. v. Morrison (VLW 007-2-067).
The panel affirmed a decision by U.S. District Judge Henry E. Hudson.
In a viatical settlement, a terminally ill patient sells a life insurance policy to a third party that picks up the premium payments and collects the proceeds when the patient dies, notes The Associated Press.
Virginia’s law requires a company buying policies to pay 60 to 80 percent of face value. A Texas-based company that paid 26 percent of a policy’s face value to a dying AIDS patient unsuccessfully challenged the Virginia regulatory scheme in Life Partners Inc. v. Morrison (VLW 007-2-067).
The panel affirmed a decision by U.S. District Judge Henry E. Hudson.
In memoriam: James W. Renney Sr.
James W. Renney Sr. will be remembered by many people as the longtime master of ceremonies at the annual shad planking in Wakefield. That time-honored Virginia political event has attracted politicians and candidates from both parties for years.
Mr. Renney, a former mayor of Wakefield, died April 26 at the age of 80. A graduate of the Unversity of Richmond and its law school, he began practicing law in Wakefield in 1958. The Richmond Times-Dispatch has details.
Mr. Renney, a former mayor of Wakefield, died April 26 at the age of 80. A graduate of the Unversity of Richmond and its law school, he began practicing law in Wakefield in 1958. The Richmond Times-Dispatch has details.
323 pass February bar exam
The results are in for the February 2007 bar exam. There will soon be 323 new Virginia-licensed attorneys, as reported by the Virginia Board of Bar Examiners.
A total of 596 candidates took the February exam, for a pass rate of 54 percent. This figure is consistent with years past.
Nearly 80 percent of the bar passers are Virginia residents, while 16 percent hailed from Maryland and D.C. Twelve additional states boasted successful candidates.
A complete run-down of new attorneys and their locations will appear in an upcoming edition of Virginia Lawyers Weekly.
Congratulations to all the new lawyers!
A total of 596 candidates took the February exam, for a pass rate of 54 percent. This figure is consistent with years past.
Nearly 80 percent of the bar passers are Virginia residents, while 16 percent hailed from Maryland and D.C. Twelve additional states boasted successful candidates.
A complete run-down of new attorneys and their locations will appear in an upcoming edition of Virginia Lawyers Weekly.
Congratulations to all the new lawyers!
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