Vol. 77, No. 10, October
Eat What You Kill:
Ethics, Law Firms, and the Fall of a Wall Street Lawyer
By Milton C. Regan Jr. (Ann Arbor, MI: Univ. of Michigan
Press, 2004). 325 pgs. $29.95. Order, www.press.umich.edu.
Reviewed by Scott Amendola
John Gellene was a partner at the Wall Street law firm Milbank,
Tweed, Hadley & McCloy. He billed 3,000 hours a year, earned a
half-million dollars a year, and was regarded as one of the best
bankruptcy lawyers in America. He also became the first lawyer ever to
be prosecuted, convicted, and imprisoned for failing to disclose a
potential conflict of interest in a bankruptcy case.
Bucyrus-Erie was a Milwaukee-based manufacturer of mining and
construction equipment that faced financial difficulties. From 1988 to
1990, it issued $121 million in "junk bonds" as part of a $350 million
leveraged buyout, engaged in a $75 million exchange offer, and issued
$60 million more in bonds. Goldman Sachs was both a financial advisor to
and a member of the buyout group, with Goldman partner Mikael Salovaara
running the show. In 1991, Salovaara and another partner left Goldman to
start their own investment fund, South Street Fund. Bucyrus's cash flow
problems persisted, and in 1992 it agreed to sell all of its fixed
assets to South Street for $35 million and lease them back at a high
effective interest rate.
By 1993, Bucyrus was near bankruptcy. It contacted its lawyer at
Milbank, rainmaker Larry Lederman, who happened to be a close personal
friend and business contact of Salovaara. Lederman assigned Gellene to
the case. Gellene worked on the case for the next year, and Bucyrus
filed its Chapter 11 bankruptcy petition in 1994. As part of his
application to represent Bucyrus during bankruptcy, Gellene was required
to disclose to the court all of his and Milbank's connections with the
debtor, creditors, and any other parties in interest.
He did not. Although Gellene knew that Milbank represented South
Street in a separate matter and Gellene himself represented Salovaara in
yet another matter, Gellene did not disclose these connections in his
application. Why did he make this omission, which when discovered a year
after the bankruptcy proceeding concluded, caused the court to revoke
the $2 million Milbank had earned, led Milbank to fire Gellene, and
formed the basis of Gellene's criminal conviction?
Eat What You Kill suggests some answers. Gellene wanted to
please Lederman, whom he relied on for business, by handling the Bucyrus
case. The environment Gellene usually practiced in, corporate
bankruptcies handled by big firms in East Coast courts, tolerated (or at
least did not punish severely) bending the rules. Gellene could
rationalize the nondisclosure as a technical violation that would not
hurt anyone because he had reached an agreement with South Street
resolving its interests in the Bucyrus estate before filing the
Eat What You Kill attempts to use the Gellene case to shed
light on the ethical quandaries faced by lawyers under pressure to
please their bosses and bring in business. Although the book is
sometimes longer and more repetitive than it needs to be, it is largely
successful and should earn itself a place in law school ethics
classrooms across the country.
Bankruptcy Law, Fifth Ed.
By George M. Treister, J. Ronald Trost, Leon S. Forman,
Kenneth N. Klee, Richard B. Levin (Philadelphia, PA: ALI-ABA,
2004). 454 pgs. $129. Order, (800) 253-6397.
Reviewed by Raj Kumar Singh
True to its title, this book is a primer on its chosen topic. After
considering the credentials of the book's five lawyer-authors, one is
hard-pressed to suppose that there are any authorities more qualified to
speak on the topic at hand.
This book is first-rate as to its substance. More noteworthy, the
publisher employs three elements of form that satisfy more than the
reader's basic demands. First, the text of this nearly 500-page
presentation is printed only on right-hand pages, reserving the
left-hand pages for passages of the bankruptcy code relevant to the
facing text, thus focusing the reader's attention on the correlation
between the commentary and the code. Second, the table of contents is
maximally specific with more than 200 labeled sections for 10 chapters.
In addition to serving its intended function, the contents page can be
used as a checklist of litigation issues. Third, the index is structured
in a straight, one-tier fashion which, at least to this reviewer, makes
it far more efficient than two-tiered indexes.
I highly recommend this volume as a foundation to attorneys who wish
to enter into bankruptcy practice. If supplemented by a list of cases,
this book also would work quite well as a law school text.
2004 U.S. Master Wage-Hour Guide
Edited by Joy Waltemath, Susan Cumming, Lisa Milam-Perez,
Ronal Miller, David L. Stephanides (Riverwoods, IL: CCH Inc.,
2004). 488 pgs. $95. Order, (800) 228-3248.
Reviewed by Scott B. Franklin
The 2004 U.S. Master Wage-Hour Guide is a product similar to
the publisher's U.S. Master Tax Guide, which most tax
practitioners have in their libraries. This 488-page reference book is a
"must have" for the human resources leadership of client companies as
well as the attorneys, accountants, and other professionals who advise
them. It exceeds by far the basic information many employers post on
their bulletin boards.
The major federal law that regulates employment is the Fair Labor
Standards Act (FLSA). Each of the Guide's 13 major topics
discusses an element of the FLSA. The topics range from a general
overview of the federal wage-hour law (which establishes the flow of the
book) to child labor issues and exemptions from the FLSA to minimum pay
and overtime pay requirements to the law's enforcement and consumer
protection elements. Each topic is presented in detail with an
introduction and several subdivisions. The publication's final subject
is a significant discussion of the Family and Medical Leave Act of
The FLSA and its related rules were enacted in 1938 and have been
updated a few times since then. This publication's 2004 edition has been
revised to include the 2004 amendments to the Department of Labor
regulations covering the overtime pay exemptions under the FLSA.
Throughout the materials are frequent citations to applicable U.S. Code
sections, the federal regulations thereunder, and pertinent court
decisions interpreting the statutory language. The Guide's
topical index is quite detailed and allows quick access to desired
Keeping in mind that the Guide only covers federal law, it
is well worth the cost to have on hand when advising on or administering
personnel issues. Of course, one should review applicable state laws
since the federal rules work in tandem with, and don't necessarily
supercede, state and local employment regulations.
To Review a Book...
The following books are available for review. Please request the book
and writing guidelines from Karlé Lester at the State Bar of
Wisconsin, P.O. Box 7158, Madison, WI 53707-7158, (608) 250-6127, org klester wisbar wisbar klester org.
Publications and videos available for review
- Drafter's Guide to Wisconsin Condominium Documents,
by Jesse S. Ishikawa & Brian W. Mullins (Madison, WI: State Bar
CLE Books, 2004). 325 pgs. CD of forms.
- The Evidence Camera, by Deanne C. Siemer &
Frank D. Rothschild (Notre Dame, IN: National Institute for Trial
Advocacy, 2004). 166 pgs.