Pro se Claimants Say the Darnedest Things

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Co-authored by Adam Strochak and Elisa Lemmer

Bankruptcy courts can be unfriendly and confusing places even for skilled trial attorneys who may be unfamiliar with the intricacies of the Bankruptcy Code or the fast-paced world of a large chapter 11 case.  So imagine the trepidation of an unrepresented claimant or shareholder (one appearing pro se in lawyer-speak) standing up in open court before a judge in black robe and a small army of attorneys attired for battle in dark suits, all carrying thick Bankruptcy Code pamphlets full of words more or less understandable individually but inscrutable when strung together.  Over the years, pro se participants have provided some of our most memorable moments in bankruptcy court and we thought we would share a few of them.

Nothing mean-spirited intended here.  Although pro se participants sometimes amuse and bemuse us, we appreciate the guts it takes to stand up on your own in court and we never cease to be amazed at the patience and courtesy extended to pro se litigants by the bankruptcy bench.

“Everybody Hates the Phone Company”

The bankruptcy of any consumer business brings pro se claimants out in force and no business seems to inspire more consumer controversy than the phone company.  Some of our favorite pro se moments came out of the 2002 chapter 11 filing of WorldCom.  One retail investor in that case – we’ll call him Mr. Simon (not his real name) – appeared by telephone at almost every hearing.  Mr. Simon would chime in periodically and ask if it was his turn to speak and Judge Gonzalez would patiently say, “Not yet, Mr. Simon.”  Finally, Mr. Simon’s matter would be called, but inevitably at that exact moment there would be a problem on the phone line.  After a few moments of static or silence, Mr. Simon’s Brooklyn-accented baritone finally would boom into the courtroom, and invariably the first thing he would say was, “Can you hear me now?”  That, of course, was the same thing that the “Network Guy” would say in the ubiquitous Verizon Wireless television commercials of the time.  It provoked a big laugh in the courtroom every time, and a smile from the bench, as everyone savored the double irony of a balky phone system in the largest telecommunications bankruptcy in history and the repetition of a competitor’s tag line.

The phone company also reminds us of the pro se claimant who purported to represent the “Department of Moorish Affairs” and sought damages for a claim against WorldCom that, 9 years later, we still don’t understand.  Although there didn’t appear to be any basis for the claim, and we never did find any information suggesting that the “Department of Moorish Affairs” even exists, neither of these obstacles stopped the claimant from making settlement demands for tens of millions of dollars, payable in “gold bullions.”  We did not uncover any bullions in the WorldCom case, although there was a substantial return for creditors in cash and stock of the reorganized company, which emerged from chapter 11 renamed MCI and, to close the irony loop, later was acquired by. . .wait for it. . .Verizon.  Can you hear me now?

“Judge Judy”

Our award for most creative argument by a pro se participant goes to a shareholder in the early 2000s reorganization of Genesis Health Ventures.  GHV was hopelessly insolvent and the case culminated with a contested confirmation hearing where a splinter group of unsecured creditors, who received only a small distribution under the plan, claimed that the debtors, the creditors committee and the secured lenders all were undervaluing the company.  At the confirmation hearing, at least four investment bankers testified that there was insufficient value to cover all the debt, and after all that evidence, at the conclusion of a lengthy hearing, a lone pro se shareholder stepped up to the podium to plead his case.  Judge Judith Wizmur patiently heard him out and at the conclusion of his presentation asked if he had any evidence to offer.  In fact, he did.  The shareholder asked to approach the bench and handed up what looked to be a PowerPoint presentation.  Judge Wizmur looked it over carefully, then peered down and said, “Sir, these are cartoons.”  They were indeed cartoons – a neatly illustrated story-board version of the shareholder’s arguments depicting “Judge Judy” presiding over the allocation of GHV’s value.  Although the GHV case is long over, this memorable confirmation exhibit lives on in our archives.  You can see it here.

“What is Abused Chicken?”

More than 50 years ago, Judge Henry Friendly, the respected lawyer and jurist who served as the general counsel of Pan American World Airways and later as the Chief Judge of the United States Court of Appeals for the Second Circuit, answered the question “What is chicken?” in his decision in Frigaliment Importing Co. v. BNS International Sales Corp., 190 F. Supp. 116 (S.D.N.Y. 1960).  The Frigaliment case, now taught in every law school class on interpretation of contracts, considered whether the word “chicken” in a contract meant broilers or fryers.  Although he deftly handled the distinction between broilers and fryers, we wonder if even Judge Friendly would be able to make sense of an allegation that counsel fees in the Pilgrims Pride case were paid in “abused chickens.”

Pilgrim’s Pride is famous for its delicious chickens and a successful chapter 11 case that paid its unsecured creditors in full.  Perhaps the success of the reorganization is why the company became the target of a serial pro se claimant.  The claimant in question has filed over 1,000 pro se pleadings nationally in the last five years naming famous defendants such as President George W. Bush, Somali Pirates and Britney Spears, as well as other less likely defendants, such as the Garden of Eden, Nostradamus, and the Roman Empire.

In May 2010, Pilgrim’s Pride found itself added to this lengthy list of targets when the claimant filed a pro se notice of appeal in its chapter 11 case.  In a pleading that mostly rambled and made numerous unfounded criminal accusations against various parties (including many unrelated to Pilgrim’s Pride), the claimant noted that he believed Pilgrim’s Pride paid its bankruptcy counsel (us) in “free abused chickens.”  We can only imagine what our monthly fee applications would have looked like if that were true.