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To: IngotWeTrust who wrote (90271)10/2/2002 3:08:00 PM
From: long-gone  Respond to of 116762
 
found this interesting. It might be important if or when naked shorts explode?
Chapter 11 Creditors Can't Sue for Avoidance of Fraudulent Transfers
by Mary P. Gallagher
New Jersey Law Journal
10-01-2002
law.com

Related:
Official Committee of Unsecured Creditors of Cybergenics Corporation
law.com

The 3rd U.S. Circuit Court of Appeals invalidated a widely used mechanism
by which Chapter 11 creditors could, with bankruptcy court permission, sue
to avoid fraudulent transfers.

In Cybergenics Corp. v. Chinery, 01-3805, decided Sept. 20, the court
affirmed a trial judge's finding that creditors are not proper parties to
bring avoidance claims under 11 U.S.C. 544(b).

"Based on the plain statutory language and the Supreme Court's analysis in
Hartford Underwriters [Ins. Co. v. Union Planters Bank, 530 U.S. 1 (2000)],
we hold that only a trustee or debtor-in-possession has the power to invoke
§544(b) to avoid fraudulent transfers, and that a court may not authorize a
creditor or creditors' committee to bring suit under §544 derivatively,"
wrote Judge Julio Fuentes, joined by Judges Anthony Scirica and Samuel
Alito Jr.

The Cybergenics ruling make the 3rd Circuit the first to disallow such
suits, which are lodged when debtors fail to bring avoidance claims. Now,
if a debtor will not sue, creditors will now have to seek appointment of a
trustee to bring an avoidance action, says the defendants' lawyer, Brian
Molloy, a partner with Wilentz, Goldman & Spitzer in Woodbridge, N.J.

However, one of the creditors' lawyers, Gary Sesser, a partner with New
York's Carter, Ledyard & Milburn, points out that it is not clear that a
court can appoint a Chapter 11 trustee for the sole purpose of bringing a
lawsuit.

Other bankruptcy lawyers are reading the opinion with interest. The ability
of creditors to sue in place of the debtors was a "safety valve" that is
now lost, says Michael Sirota, a partner with Hackensack, N.J.'s Cole,
Schotz, Meisel, Forman & Leonard.

Bruce Buechler, a partner with Roseland, N.J.'s Lowenstein Sandler, says
the ruling will force creditors to seek appointment of operating trustees
to bring suit even if putting a trustee in charge is not otherwise in the
debtor's best interest. For example, a closely held or family-owned company
may be reluctant to sue shareholders or insiders, who could be family
members. But the company might have installed new management, so that
appointing a trustee to run the business is counterproductive, Buechler says.

As Buechler points out, the alternatives to derivative suits present their
own problems. Creditors can push for quick confirmation of a reorganization
plan that provides for an estate representative to pursue claims, but they
run the risk that the limitations period will run before the plan is adopted.

He says that another approach -- to dismiss the bankruptcy action and
pursue the claim in state court -- ignores the reasons the Chapter 11
petition was filed and sacrifices the ability to sell assets clear of liens.

The effect of the ruling is already being felt. On Sept. 24, U.S. District
Judge Alfred Wolin of the District of New Jersey postponed a trial
scheduled to start Monday in an action against Sealed Air Corp. by
creditors of Chapter 11 debtor W.R. Grace.

According to Henry Wasserstein, who represents Sealed Air, a
packaging-supplies company in Saddle Brook, N.J., Wolin gave the parties
until Monday to file letter briefs explaining how the Cybergenics ruling
impacts their case. Wasserstein is a partner with the New York firm of
Skadden, Arps, Slate, Meagher & Flom.

The Grace creditors' lawyer, Brad Friedman, a partner with New York's
Milberg Weiss Bershad Hynes & Lerach, did not return a call requesting comment.



To: IngotWeTrust who wrote (90271)10/2/2002 3:18:28 PM
From: long-gone  Respond to of 116762
 
somehow related to this & or your realm
The hidden treasures of Egypt
In a dark, dusty museum basement, an Indiana Jones fantasy unfolds
msnbc.com

CAIRO, Egypt, Sept. 29 — Gaston Maspero, the first director of Egypt’s national storehouse of ancient treasures, is said to have believed his museum should resemble pharaohs’ tombs — crowded with paintings and statues, furniture and jewelry. One hundred years after the Egyptian Museum opened, its basement, at least, is everything the French Egyptologist could have hoped for. Wandering through its shadowy maze is like exploring the inside of a pyramid.

‘It was a discovery. We conducted an excavation inside the basement itself.’ — ELHAM SALAH museum curator

HERE, THE BEAM of a flashlight picks out a 3-foot-long, bearded stone bust of a pharaoh resembling those at Luxor and Karnak that date back some 4,600 years. There, a trio of cupids straight out of a Victorian cemetery form an incongruous honor guard for a dark stone pharaonic figure in the familiar pose — arms straight at the sides, left foot forward, face imperious. A corner devoted to stone pedestals and capitals could be a spare parts shop for a classical architect.

For the most part, the basement is off limits to all but museum staff and researchers. An Associated Press reporter was recently allowed a rare visit. Once inside, it is something of an Indiana Jones fantasy, minus the snakes.

Just getting here was an excavation of sorts through several layers of skeptical bureaucracy before a curator opened the heavy door of a safe and handed a set of keys to an assistant. Another assistant grabbed a pair of cutters for the wire and lead seal on the basement gate.

Permissions granted, seal snipped, gate and door unlocked and then it is down a sloping cement floor, under a low arch, a sharp right past three dusty fire extinguishers to another locked door, this one iron and guarded by an empty stone sarcophagus. A pause while a member of the party — which has grown to include a museum guard, a second assistant curator and a handyman — heads back to the office to find more keys.

Once inside the main chamber, the honking, tire-squealing cacophony of downtown Cairo is muffled. The first stop is an area cleared to store the 150 or so items of “Hidden Treasures of the Egyptian Museum,” an exhibit set to open Dec. 9 to showcase objects long hidden in the basement and other storage sites.

The “Hidden Treasures” include two sphinxes the size of beagles, one headless, standing chest-to-chest on the cement floor under cowls of bubble wrap. On shelves behind sheets of clear plastic are a graceful, shallow stone vessel marbled in gray and charcoal, and delicately detailed funerary statues of workers doing tasks for the royal dead — offering beer, grinding grain. They haven’t been dated yet, but resemble those found in the tomb of Tutankhamun, who ruled more than 3,300 years ago.

MYSTERIOUS ORIGINS

For years, museum curator Elham Salah had seen the basement as merely a place for leftovers. Then came an order from the irrepressible Zahi Hawass, director of the Supreme Council of Antiquities, to choose items for “Hidden Treasures.” That opened her eyes.

“It was a discovery,” she says. “We conducted an excavation inside the basement itself.”

Adding to the sense of intrigue, most items in the basement are what Salah described as “unpublished objects” — those yet to be studied and placed into the context of Egypt’s rich history. Curators are contacting excavation leaders and other researchers and comparing the no-longer hidden treasures to pieces about which more is known to prepare to tell their stories for the exhibit.

Many of the basement treasures are tagged, though dust and time have obscured some information. Pieces from the museum’s holdings are cataloged, but the basement also has become the resting place for items from excavations and overflow from other museums for which there’s no central registry. Until planned cataloging of the entire basement begins in earnest, it will be difficult to determine how complete the basement records are, and how many pieces may remain mysteries forever.

As they explored in preparation for the “Hidden Treasures” show, scholars simply grabbed whatever caught their eye. “It could take days and days” to find any specific object, Salah said. With each step deeper inside the basement, it became clear why.

ORDERLY NEGLECT

Wires snaking along the brick walls feed bulbs, their light penetrating the gloom just enough to reveal a scene of orderly neglect: Wooden crates sprouting straw, cardboard boxes that once held bottled water, suitcases of treasures arranged on shelves and covered with dust that looks as though it has been collecting since the museum opened Nov. 15, 1902.

A crate that had lost its lid revealed beach-ball-sized, terra-cotta vessels nestled in crumpled paper and dust. Unboxed larger pieces include a life-sized prone human figure on a high shelf. The eerie figure, arms thrust to the ceiling in what looked like rigor mortis, set off a debate among the guard and assistant curators. A mummy? A flashlight revealed it was a wooden statue.

The mummy was farther on, resting in a richly carved and painted wooden sarcophagus, its lid ajar just enough to allow a glimpse of dust-blackened wrappings.

As time passed, the basement seemed to get hotter and damper. The east bank of the Nile is only a block away, but there are no obvious signs of water damage on the walls, low ceiling or art. Antiquities director Hawass, though, is concerned some of the treasures may have been damaged by years of neglect.

Hawass took a look in the basement not long after being promoted to Egypt’s top archaeology job in March. Out of curiosity, he tried — and failed — to find boxes he had sent to the museum from a dig he oversaw in the mid-1970s of a site from 2,300 years ago when Greco-Roman pharaohs ruled Egypt.

“That basement — it was for me like a site that had not been excavated yet,” said Hawass, whose broad smile and enthusiasm for all things Egyptological are familiar to TV viewers worldwide, most recently on a National Geographic special about the secrets of the Great Pyramid.

A MUSEUM’S WORTH UNDERGROUND

Hawass estimates the basement holds some 100,000 items, about as many as in the galleries above that are open to the public. He has ordered every basement piece cleaned, cataloged and eventually transferred to new storage quarters to be built next to the museum.

The old basement will be remodeled into study areas for researchers, new work space for the museum’s restoration team and a gallery to show off pieces lost in storage for years.
The project will begin with the “Hidden Treasures” show as part of the museum’s 100th birthday celebrations. There are no plans yet to take the exhibition abroad.

Most of the artifacts in the museum’s downtown building will eventually be moved to the much larger Grand Egyptian Museum, expected to open in five years on the edge of the desert near the pyramids. The old museum will be devoted to a few thousand masterpieces.