Vol. 77, No. 10, October 2004

Book Reviews

• Eat What You Kill: Ethics, Law Firms, and the Fall of a Wall Street Lawyer
• Fundamentals of Bankruptcy Law, Fifth Ed.
• 2004 U.S. Master Wage-Hour Guide

• To review a book

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 bankruptcy petition.

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.

Fundamentals of 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 1993.

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 information.

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.

Wisconsin Lawyer