Judge Thomas Bennett Pens New Bankruptcy Chapter
It all began in the year 1997 when Jefferson County borrowed a sum of 3.6 billion dollars from J.P Morgan & Chase Company and various investors in order to start a huge pipeline project that would help prevent the leakage of sewage into rivers of Alabama. But after about 14 years, the County realized that the project had cost them way too much to be continued and therefore in November 2011, Jefferson County finally filed for bankruptcy to seek protection against the payments to be made to the investing people and company. This has in turn created a stir amongst the courts and legal community since this is officially the biggest bankruptcy filed in the history of United States.
A year after the bankruptcy case was filed; the leaders of the county are still involved in a tug of war with the lawyers from Wall Street who have been hired by the banks in order to protect some (if not all) part of the investment worth 3.2 billion dollars in the sewer system of the county. As time passed and the case went on, the local government was forced to reduce the budget of work on the streets and other development activities while cutting down government jobs as well. To make the situation even worse, the officials of the county have also mentioned that they might have to cut down funding and operation of hospital for the poor. In addition, a crowd of people trying to get their permits and licenses renewed was seen around the municipal building at all times.
The 63 year old well experienced U.S bankruptcy court judge, Thomas Bennett, has chosen an eccentric and completely blunt legal path to fight this battle by taking it to unexplored parts of bankruptcy laws of Chapter 9. This is because the case threatens to damage the entire concept of investment in municipal bonds. Even the financial institutions and most of the banks are fearing the fact that by the case will eventually result in such laws that are bound to scare off those investors who want to trade in municipal bonds. For this year, the case has gained utmost importance not only among the judges and the local investors but also among other counties.
According to John T. Copenhaver who is the longest serving federal judge of the nation, the case will lead to a number of new laws made with regards to bankruptcy and Thomas Bennett will be playing a key role in bringing these changes since he is the man who has maximum amount of knowledge about Chapter 9. Bennett was the one who fought the California bankruptcy case, which was considered the largest one before this new case arrived. He has an experience of around 17 years in the courtrooms, not to forget the Chapter 11 case he filed on behalf of a poultry that had around 6 million live chickens. In addition to this, Bennett has also been involved in a number of bankruptcy cases but none of them were of this large a scale.
Judge Bennett also had a private attorney of the county interpret the fine print of accounting rules. The attorney who charges $1050 per hour constructed legal arguments around the request put forward by the county to have the bondholders pay. However, this request to have the creditors cover Chapter 9 costs has not been fulfilled. Bennett remained unsatisfied with this information on Alabama state rules restricting counties from filing for bankruptcy. Instead, he ordered his law clerks to find more details in a Montgomery library on a 28-page March decision that allowed the case to go on.
With regards to Bennett’s aptitude and capabilities, a Harvard professor currently teaching at University of Virginia, Frederick Schauer, believes that most lawyers outside the Birmingham bar incorrectly assume that just because somebody practiced in West Virginia and is now a judge in Alabama, they would necessarily not be sophisticated. This is further proved to be true because of many attorneys who are surprised by his controlling style and have started calling him the ‘smartest man in the room’.
For a lot of people who considered him an outsider, his appointment in 1995 for a 14-year term came as a surprise. Having a salary of $160,080, similar to federal bankruptcy judges, Bennett as former President of the National Conference of Bankruptcy Judges also testified before Congress in 2007 with regards to the foreclosure crisis.
So how does Bennett’s mind really work? After representing clients like Exxon and the coal firm, Massey Energy Co. at a law firm in Charleston, West Virginia, Bennett took to the bench in 1995. Thoman Heywood, a former colleague described Bennett’s mind as always being ‘three to four chess move’ ahead of other lawyers. He also engaged his mind in all sorts of unknowns and ambiguities. According to Bennett himself, he is always on the lookout for things that are missing and differentiating between something that is missing and something that is wrong.
The spot on Birmingham’s bankruptcy bench first came to Bennett’s attention through a mass-mailed flier. His style is also believed to be different from that common in bankruptcy courts in Delaware and Manhattan. Wall Street lawyers, who were asking for time to organize a round of arguments in one of the first hearings, were quickly rejected by Bennett with the reasoning that the full-time job of these lawyers for the next month should solely be the case.
P. Michael Pleska, who has experience working with Bennett in private practice but who is now retired, stated that he expects all the reputed and big-time lawyers to know exactly what they are talking about. On the other hand, Judge Bennett himself has taken months to write opinions amidst rising sewer costs and the claim by creditors for repayment.
Judge Bennett, like this father, attended boarding school after growing up in Philadelphia and then went on to get undergraduate and graduate degrees of economics for West Virginia University. Later he enrolled in law school and topped his class in 1976.
☑ Been paying credit card balances that seem to never go down?
☑ Lost your job and are now having trouble keeping up?
☑ Attempted to work out a payment arrangement to no avail?
☑ Been notified of a mortgage foreclosure action?
☑ Been denied for a mortgage or other line of credit?
If the answer to any of these questions is “yes” then bankruptcy may be an option that you should consider.