Texas Rangers, Pilgrim's Pride Judge Looks Forward to Firm Life

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By Stephanie Cumings

Jan. 26 — Judge D. Michael Lynn has seen a lot transpire in the field of bankruptcy during his 14 years on the bench.

Lynn may have entered the bankruptcy world simply because “that's where [he] got a job,” but he leaves the bench as a pillar of the bankruptcy community, highly respected by judges and practitioners alike.

“I do not know anyone — anyone — who has the depth of knowledge and understanding of the Bankruptcy Code and Rules as Michael,” Judge Cecelia G. Morris told Bloomberg BNA Jan. 21. Morris is the Chief Bankruptcy Judge for the U.S. Bankruptcy Court for the Southern District of New York. “His intellect is astounding on every aspect.” Morris is also an editor of Bloomberg Law: Bankruptcy Treatise.

The law firm Shannon, Gracey, Ratliff & Miller LLP, Fort Worth, Texas, recently announced that Lynn has joined their firm as senior counsel, where he said he's looking forward to providing solutions to cases he couldn't offer when he was a judge.

Judge Lynn recently spoke with Bloomberg BNA about his return to private practice, the trends he's witnessed as a judge, and the lessons he's learned during his time on the bench.

‘Stupidest Statement I've Ever Heard.'

Lynn spent the last 14 years as a bankruptcy judge for the U.S. Bankruptcy Court for the Northern District of Texas, where he presided over several prominent bankruptcy cases, including Mirant Corp., Pilgrim's Pride Corp., and Texas Rangers Baseball Partners. The Texas Rangers case was particularly contentious, and it became national news when Judge Lynn received death threats related to the acrimonious sale process. Those threats resulted in U.S. Marshalls being sent to protect the courthouse.

But when Lynn reflects on the case, he's just happy to have had the chance to hear it at all. Despite the unique challenges posed by the case, the former judge strongly believes cases that have major impacts on a local community should be heard in that local community. He's been dismayed by the trend of bigger Chapter 11 cases going to Delaware and New York, despite having almost no connection to those states.

By way of example, he noted the Dallas Stars hockey team case and the American Airlines case, two cases that he said had a huge “community impact” that were sent to Delaware and New York respectively. Lynn told Bloomberg BNA that this was an “unfortunate thing,” especially for the thousands of American Airlines employees in the Dallas area.

Lynn scoffed at the idea that the Delaware and New York courts are better equipped to handle major bankruptcy cases. He told Bloomberg BNA that the former American Airlines president is an “idiot” for suggesting that the judges in New York were more experienced, calling this “the stupidest statement [he's] ever heard.” He noted that New York Bankruptcy Judge Sean H. Lane had only been on the bankruptcy bench 11 months when he was given the case. Lynn said the judges in Delaware and New York are no more qualified than the judges in Texas.

Shrinking Court Authority

Another trend he's noticed is the “shrinkage of bankruptcy court authority and jurisdiction,” referring to the line of Supreme Court cases in recent years that have questioned the bankruptcy courts' constitutional power to make certain decisions. The issues in those cases arise from the fact that bankruptcy judges aren't judges appointed for life under Article III of the Constitution. Lynn said he believes bankruptcy court judges should “be considered Article III judges or not exist.”

This trend of shrinking court power is “good for lawyers” but “not good for parties,” Lynn told Bloomberg BNA. He said these issues have given lawyers more to argue about, driving up fees and creating needless litigation. But he wouldn't go as far as to say the Supreme Court got it wrong on this issue, noting he “would never presume to say the Supreme Court got something wrong.”

Tougher Attitude Towards Discharges

Another trend he's noticed is a “tougher attitude towards consumer discharges.” Lynn said this isn't just the result of amendments to the Bankruptcy Code in 2005, but also the fact that “court decisions have become harsher.” While discharges used to be fairly routine, he said they have become more of a “privilege” than an “entitlement.”

Judge Lynn has a history of going the extra mile to help consumer debtors understand the bankruptcy process. When he was a judge, he'd go to the standing Chapter 13 trustee's office once a week to speak with new debtors so that he could “bring home the importance of the bankruptcy proceeding.” He said “many people never see a judge” and he wanted debtors to understand that they're not just “filling out forms,” but participating in a real federal court proceeding with real life consequences.

“He is serious about making sure that people within the bankruptcy system are treated fairly and with respect,” Professor Nancy Rapoport told Bloomberg BNA Jan. 21. Rapoport is a law professor at the William S. Boyd School of Law at the University of Nevada, Las Vegas. She is also an editor of Bloomberg Law: Bankruptcy Treatise. “I've seen him welcome hundreds of new debtors to the workings of the Bankruptcy Code without ever demeaning them or making them feel bad about having sought bankruptcy protection.”

Bad Mouthing Opposing Counsel

When asked if he had any advice for young bankruptcy attorneys, Judge Lynn said: “Be prepared, proofread, and don't let the other side set the issues.” He said he's seen attorneys argue at length over things that turned out to be irrelevant because one side didn't question the opposing counsel's framing of the issue.

He also can't stand “the practice of bad-mouthing opposing counsel,” specifically when “instead of arguing your case, you're blaming other lawyers for acting badly.” Lynn called this a “waste of time,” and said as a judge he wanted to get to the substantive arguments rather than hear attorneys bicker about discovery issues and uncooperative behavior.

Leaving His Mark

“Judge Lynn will be deeply missed by the Texas bar,” Omar J. Alaniz of Baker Botts LLP, Dallas, told Bloomberg BNA Jan. 26. Alaniz clerked for Judge Lynn from 2006 to 2007 and is also a contributing author for Bloomberg Law: Bankruptcy Treatise. Alaniz said that Judge Lynn has been an invaluable mentor to the young lawyers of the Texas bankruptcy community. “I would not be where I am in my career without Judge Lynn’s guidance and mentorship.”

But mentoring young lawyers isn't the only way the judge impacted his community.

“One thing I remember about my judicial clerkship, which has always stood out in my mind and I doubt many people know about (because Judge Lynn doesn’t make it a point to necessarily talk about), is the time Judge Lynn spends helping the local community through non-legal organizations, such as Samaritan House,” Jonathan L. Howell, another former clerk of Judge Lynn, told Bloomberg BNA Jan. 26. Howell is currently the head of the Bankruptcy, Restructuring, & Creditors' Rights Section at Glast, Phillips & Murray PC, Dallas. “His commitment to helping those less fortunate and organizations in desperate need of resources, particularly those individuals and organizations which have historically been stigmatized but nonetheless in need of help, is what I’ll always remember about Judge Lynn as a mentor, a role model, and a friend.”

Offering Solutions

When he was a judge, Lynn said he “saw cases that had solutions the parties missed but I couldn't offer.” Now that he is returning to private practice, he's looking forward to be able to offer those solutions.

“Judge Lynn will work closely with the members of our Bankruptcy Group and develop the firm's mediation practice,” Rich Lowe, Shannon Gracey's managing partner, said in a Jan. 11 press release.

Working for a firm won't be unfamiliar to Lynn, who spent 29 years practicing bankruptcy law before his appointment to the bench. He'll bring a wealth of bankruptcy knowledge as the editor-in-chief of Bloomberg Law: Bankruptcy Treatise.

Lynn is “literally one of the top five smartest people I know,” Rapoport said.

“I have a better appreciation that there are two sides to each case,” Judge Lynn said when asked how his experience as a judge will shape the way he practices law going forward. But he is going to miss “not being the one to ask the questions.”

By Stephanie Cumings

To contact the reporter on this story: Stephanie Cumings in Washington at sacree@bna.com

To contact the editor responsible for this story: Jay Horowitz at jhorowitz@bna.com