Monthly Archives: June 2009

First it was hot coffee, now machetes!

Proper thinking Englishmen outraged that 15-year-old boy purchased a machete over the Internet. Good Lord. By the time I was ten I was busy cutting down trees in our backyard with an axe, and I’m quite sure I brought a machete home from Puerto Rico when I was twelve. My misadventures thereafter had nothing to do with being exposed to sharp blades as a lad and I suspect England could survive this onslaught too. Or it could have a generation ago.

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If it saves the life of just one child

From Overlawyered.com comes this story of pensioners barred from drinking hot coffee at their library lest it spill and scald a toddler.

Sam Romeo was unavailable for comment.

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Bourke defense rests

He didn’t take the stand, which is standard advice from defense lawyers, but always a disappointment to jurors. It’s been hard to find much coverage of this trial, what with more important matters like Michael Jackson’s fatal drug overdose, but from I could glean, I don’t see that the prosecution had much to begin with and didn’t develop much as the trial progressed. Closing arguments next week, then the verdict, so I guess we’ll see.

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Dealbreaker reports Mark Madoff sighting

One of the two worthless sons was seen acting like an arrogant asshole in Nantucket this week. I wonder where he learned that behavior? More important, why does he still have the use of stolen money to spend on Nantucket and when will he joining his dad in Otisville for a manners course?

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So what’s the story with 58 Dawn Harbor?

A number of readers are curious how this came to be sold and so am I. It showed up today on the MLS marked “for reporting purposes only” meaning it was never really listed but the firm wants the credit for the transaction, and the “asking price” is shown as $14.5 million with a $12.8 million sales price. The former is just nonsense, of course, but was $12.8 a good price?

Without knowing more than the bare recital of the sales announcement, I’d say it was. Two good agents, even if they work for the same firm, each representing his and her client’s interest, should have produced a satisfactory deal.  In better times ‘d have expected to see this house sell for more but these are not better times.

Still, I’m surprised at the relatively low price this went for. 88 Cedar Cliff, right around the corner with beautiful water views but n0 frontage, sold direct for $11.750 to someone who proceeded to tear it down. Pilot Rock, waterfront with a view of 58 Dawn Harbor, sold for $10 million something six months ago and that house, too, is probably not long for this world. In that same association, the Mackey’s place, a pre-fab, is asking $12 and change for what is essentially waterfront land, period. It’s entirely possible this sale was made to a friend or neighbor or the seller simply didn’t want to complicate his life opening it to strangers. He might have gotten more if he had but he’s pocketed his money and moved on, which is never a bad result.

To answer one reader’s concern, fret not – I’m sure the agents managed to get paid their commissions. It’s touching that you worried, though.

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Uh oh

I wondered about this. 272 Riverside Avenue, new construction, was bought in January 2008 for $3.850 million and put back on the market this past February for $3.875. I sold two similar houses just a few doors away in 2007 for $3.8 each and I was curious to see what the market did to this one’s price. We still don’t know because it hasn’t sold but today it was marked down to $3.695.

It could be worse: the builder tried for the longest time to get $4.5 million for this place but fortunately, no one bit.

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First half activity, by district

Single Family Homes. Active as per 6/3009, sales 1/01/09 – 6/30/09

GR: 505 active, 61 sold, $445,000 – $16.500 million

CC: 71 Active, 29 sold, $525,000 – $3.8 million

RV: 91 Active, 21 sold, $722,500 – $12.8 million

OG: 92 Active, 18 sold, $570,000 – $2.2 million

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New land listing

22 Cornelia Drive has been listed today for $2.570 million. I understand the thinking here – the owner paid $2.050 for it two years ago, razed the cottage that was there and spent a small or even a large fortune preparing a building site. But ….

The lot is pretty much a high promontory falling off into swamp. It is technically two acres in a one acre lot but at least half of that is swamp cabbage and mud and I don’t think that brings a lot to the party. The neighboring spec house next door, 21 Cornelia, has been on the market since 2005, starting at $11.7 million and falling down into the $6s. I don’t know how long its builder can hang on but I’d guess that 21 will sell for a steep discount eventually, making anything built at 22 suffer a bit. But maybe – $2.5 for the land, $2 million for a house, you’d be in at a price that should be okay for this street. I guess I’d prefer to try to cut a deal with the builder of 21 and pick up what seems to be better land.

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Stepping from the shadows of the B.E.T.

Free beach passes for all!

Free beach passes for all!

Ed Krumeich will accept job as Third Selectman. I’m sure he’d prefer to see Tesei defeated completely but even if Ed comes in last, as he has before, at least this time he’ll gain the loser’s prize of being permitted to attend ribbon cuttings at the sewage plant, kiss the winner of the Cos Cob School Field Day potato sack race and anything else Lynn and Peter won’t attend. I don’t know why a talented lawyer and genuinely nice guy like Ed would want this stupid job but heck, it doesn’t pay and there’s no honor in it, so why not let him have it?

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More Nigerian email

Got this in the mail just now. I think I’m going to run it by Helen Davis Chaitman, just to make sure it’s on the up and up. If it’s legit and you want to join me in this quest, just send cash to Fudrucker and me here in Old Greenwch. We’ll take it from there.

chris –

Did you see Vice President Biden’s email last week, sharing personal health care stories from supporters across the country? Well, the stories have been read millions of times, and the reaction is an overwhelming, “Wow — we’ve got to get to work.”

It’s not surprising — these stories show the human face of the health care debate and inspire us all to act.

So here’s our latest idea: Putting our supporters in coast-to-coast television and online ads, telling their own stories, in their own voice. It could be a breakthrough moment in this debate, when millions of Americans realize how urgent reform really is.

But recording and nationally broadcasting these stories won’t be cheap. We can only go forward if you’re ready to chip in. So what do you say — should we do it?

Yes. I think this is a great idea, and I’m ready to contribute so it can happen.

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Dealbreaker: Bernie’s gonna be just fine

Darn it, they may be right.

[I]t’s probably just going to be a lot of monotony, which will be boring but let’s be honest– he’s a 71 and the alternative, had he not run into some legal troubles, would’ve been puttering around Boca with Ruth squawking in the background. With this new change in life plans, he’ll be mixing it up, making friends and actually making money. Between 12 and 40 cents an hour, depending on the gig and its seniority! He’ll also have the time to get in shape, since there’ll probably be a walking track and basketball court, where you just know he’ll be hustling guys twice his size on the regular. Finally, let us not forget that being thrown in the slammer will actually provide some measure of relief to Big B, who will be free, mentally-speaking, for the first time in his adult life, assuming that former employee wasn’t just blowing smoke re: Ponz Boy being obsessed with symmetry and straight lines.

Of course, Bernie’s obsessive need for cleanliness probably won’t jibe with the less than spotless conditions of wherever he ends up, but presumably fellow inmates will have no problem dressing him up in a French maid costume and scrubbing on hands and knees.

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End of quarter activity

58 Dawn Harbor

58 Dawn Harbor

This waterfront Riverside home was never listed but it sold today for $12.8 million. Not bad. Owner paid $12.5 for it in January 2004 but I do believe direct waterfront is the last best hope for anyone who wants to come close to breaking even on his purchase these days.

On a lesser scale, 236 Palmer Hill Road sold today for $1.140, which is nice, but the poor owner has had it on the market since July, 2006 at $1.495 and on down.

10 Greenway, in Glenville, was bought new via a bidding war for $2.02250 in June, 2006 and sold yesterday for $1.675. Win some, lose some.

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Madoff victims – cry me a river?

There are certainly some unfortunate tales of people who entrusted their money to Bernie Madoff only to have that trust betrayed. And then there are those like Helen Davis Chaitman, who seem less deserving of my concern.

Today’s New York Times covers her thus:

“The S.E.C. has done nothing to enforce the Securities Investor Protection Corp.,” said Helen Davis Chaitman, a retiree who spoke at the rally. Ms. Chaitman is leading a group of Madoff victims who have sued Mr. Picard to change the way he calculates claims.

“No one can trust the honesty of the securities industry,” Ms. Chaitman added later. “We have learned that from Madoff, from Stanford and from the global economic collapse caused by the unremitting greed of Wall Street,” she said, referring to R. Allen Stanford, the Texas billionaire who is involved in his own legal battle amid accusations by the S.E.C. that he operated a big Ponzi scheme.

“From our perspective, the S.E.C. is a waste of taxpayer dollars,” her husband chimed in.

So who is this “retiree” who trusted so blindly, who relied on the SEC to protect her? A lawyer who specialized in bank fraud.

Her biography states:

Helen Davis Chaitman is a nationally recognized litigator with a diverse trial practice in the areas of lender liability, bankruptcy, bank fraud, RICO, professional malpractice, trusts and estates, and white collar defense.  In 1995, Ms. Chaitman was named one of the nation’s top ten litigators by the National Law Journal for a jury verdict she obtained in an accountants’ malpractice case.  Ms. Chaitman is the author of The Law of Lender Liability (Warren, Gorham & Lamont 1990) which is periodically updated and, since 1987, has authored the monthly newsletter, The Lender Liability Law Report.  In early 2009, Ms. Chaitman spearheaded the firm’s pro bono representation of investors in Bernard L. Madoff Investment Securities LLC.  She has been successful in publicizing the plight of the victims of Madoff’s Ponzi scheme and has been interviewed or reported on by media outlets worldwide, including The New York Times, Bloomberg, The Guardian and The American Lawyer

Ms. Chaitman practices regularly in New York and New Jersey and has been admitted to practice pro haec vice in numerous jurisdictions throughout the United States.
 

Representation Details Regarding Areas of Experience:

Bank Litigation
Ms. Chaitman has handled all kinds of debtor/creditor litigation.  She has prosecuted and defended RICO claims; she has defended banks in various lender liability actions; she has represented borrowers and guarantors in litigation against financial institutions. 

Lender Liability
Ms. Chaitman is not only the author of the leading treatise on lender liability, she coined the term “lender liability.”  She has been involved in some of the seminal decisions defining the obligations of financial institutions, particularly in the area of good faith and fair dealing.  She has written the monthly newsletter “The Lender Liability Law Report” since 1987 and has spoken at professional conferences on lender liability since the 1980s.

Bankruptcy and Restructuring
Ms. Chaitman has represented several corporate debtors in chapter 11 cases that were successfully reorganized.  She has represented creditors in defending preference and fraudulent conveyance claims.  She has had extensive experience representing lenders and corporate borrowers in debt restructurings and workouts.

Professional Malpractice Litigation
Ms. Chaitman has litigated malpractice cases against both accountants and lawyers.  Indeed, the National Law Journal named her one of the nation’s top ten litigators in 1995 based upon a jury verdict she won in New York Supreme Court against an accounting firm on behalf of a client whose accountant embezzled funds.  She also litigated a legal malpractice case against Rogers & Wells.

RICO Litigation
Ms. Chaitman has extensive experience litigating RICO cases on behalf of creditors.   She won a RICO judgment in the Eastern District of New York in a bench trial before the Honorable Jack Weinstein, which was affirmed on appeal by the Second Circuit.  She successfully defended Credit Lyonnais (Suisse) S.A. in a RICO action in the Southern District of New York. 

Trusts & Estates Litigation
Ms. Chaitman has done substantial litigation involving trusts and estates both in New York and New Jersey.  In one instance, she was asked to try a case in New Jersey one week before the trial was scheduled to begin.  The case was a suit by an executor to recover hundreds of thousands of dollars in cash gifts given to the defendant in the last two years of the decedent’s life.  During the course of the trial, the judge urged Ms. Chaitman to settle because he was convinced that the jury was against Ms. Chaitman’s client.  The executor refused the generous settlement proposal offered by Ms. Chaitman’s client and she had no alternative but to proceed with the trial.  The result: The verdict was in favor of Ms. Chaitman’s client. The jury found that the inter vivos not the result of undue influence.  The jury verdict was affirmed on appeal.

White Collar Criminal Defense
Ms. Chaitman defended a bank director charged by the United States with bank fraud – a charge of which the defendant was found not guilty.  Ms. Chaitman has also represented a criminal defendant in post-trial proceedings and provided advice to clients facing charges of bank fraud. 

A representative sampling of Ms. Chaitman’s reported decisions include:

  • McAninch v. Kansas Bankers Surety Co., 478 F. 3d 882, 2007 WL 655454 (8th Cir. 2007) 
  • Hunts Point Terminal Produce Cooperative Association v. New York City Economic Development Corporation, 36 A.D. 3d 234, 824 N.Y.S. 2d 59, 2006 N.Y. Slip Op. 08073 (2006). 
  • Levchuk v. Jovich, 2005 WL 2364826 (N.J. App. Div.) 
  • Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A., 220 F. Supp. 2d 283 (SDNY 2002) Sinclair v. United States, 49 Fed. Cl. 274 (2001); Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A., 2000 U.S. Dist. LEXIS 1438 (S.D.N.Y.) 
    Logan & Kanawha Coal Company, Inc. v. Banque Francaise du Commerce, 1996 WL 551718 (SDNY) 
  • Sterling National Bank v. Longa, 2000 U.S. Dist. LEXIS 13306 (S.D.N.Y.) 
  • Stochastic Decisions, Inc. v. DiDomenico, 995 F. 2d 1158 (1993) 
  • Bank of China v. Chan, 937 F. 2d 780 (2d Cir. 1991) 
  • Baxt v. Liloia, 155 N.J. 190, 714 A. 2d 271 (N.J. 1998) 
  • Bevill, Bresler & Schulman Asset Mgmt. Corp. v. Spencer S&L Assn., 878 F. 2d 742 (3d Cir. 1989) 
  • International Minerals & Mining Corp. v. Citicorp North America, Inc., 736 F. Supp 587 (D.N.J. 1990) 
  • In re Wedgewood Realty Group, Ltd., 878 F. 2d 693 (3d Cir. 1989) 
  • Stochastic Decisions, Inc. v. DiDomenico, 236 N.J. Super. 388, 565 A. 2d 1133 (N.J. App. Div. 1989) 
  • John Doe v. United States, 520 F. Supp. 1200 (S.D.N.Y. 1981).

Ms. Chaitman is a member of the Character & Fitness Committee of the New York State Appellate Division – First Department.  She served as the chair of the Commercial Financial Services Committee of the Business Law Section of the American Bar Association from 1994 to 1997.  She is a member of the American Law Institute and serves as an adviser on the Restatement (Third) of Restitution. 

Ms. Chaitman has written numerous articles published in various journals on banking law and other subjects, including:

  • “The Ten Commandments for Avoiding Lender Liability” The Secured Lender November/December 1986
  • The Equitable Subordination of Bank Claims” The Business Lawyer, August 1984 
  • “Enjoining Payment on a Letter of Credit in Bankruptcy: A Tempest in a Twist Cap” The Business Lawyer, November 1982 
  • “David, Inc. v. Goliath National Bank” Litigation  Vol. 13 No. 4 Summer 1987
  • “The Ten Commandments for Avoiding Lender Liability” Commercial Law Annual 1991 
  • “Do Unto Others…” Business Law Today, November/December 1993 
  • “Supreme Court Chills Prejudgment Remedies” The Banking Law Journal, July/August 1999

I am not saying that a sophisticated investor like Attorney Chaitman deserved to be ripped off by Madoff or any other crook. I am saying that I am not particularly touched by her demand that I make up for her losses. Go back to work, madam, and earn it back – probably won’t take you more than a few years of lecturing those “Greedy Wall Street Bankers” on the ins and outs of “avoiding lender liability”.

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There’s a great, big beautiful tomorrow, ….

Home mortgage delinquencies double.

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All real estate is local but ….

Case Shiller Index doesn’t have anything encouraging to say about new home prices. Down 40 – 50% from peak, with more room to go.

0 case shiller

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The tax man leaveth

As reported here yesterday, this will be Lou Caravella’s last term as tax collector. So far, Walter Noel has yet to take up this blog’s suggestion that he run to replace him but he’s probably giving it deep thought. The $95,000 salary may not keep the creditors away from 175 Round Hill but it would afford a nice Byram rental and a few rounds of drinks at the RHC.

In the meantime, Lou will be missed.

Affectionately known as the “Mayor of Cos Cob,” Caravella has perennially been a top vote-getter for his party, appealing to Democrats, Republicans and unaffiliated voters alike. He has rarely been challenged.

“All I can say is any town where the most beloved official is the tax collector, that’s got to say something about Lou Caravella,” said Frank Farricker, a Democratic Town Committee leader who is charge of recruiting candidates for municipal office.

Next time I see Frankie Futtericker, I’ll point out that if the most popular elected official in town is the Tax Collector, it’s possible that the other pols running the town are really, really hated. Just a possibility, but ….

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Off to open houses – here’s Walt’s favorite poem to contemplate while I’m gone

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Hay for the Horses

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  He had driven half the night
From far down San Joaquin
Through Mariposa, up the
Dangerous Mountain roads,
And pulled in at eight a.m.
With his big truckload of hay
behind the barn.
With winch and ropes and hooks
We stacked the bales up clean
To splintery redwood rafters
High in the dark, flecks of alfalfa
Whirling through shingle-cracks of light,
Itch of haydust in the
sweaty shirt and shoes.
At lunchtime under Black oak
Out in the hot corral,
—The old mare nosing lunchpails,
Grasshoppers crackling in the weeds—
“I’m sixty-eight” he said,
“I first bucked hay when I was seventeen.
I thought, that day I started,
I sure would hate to do this all my life.
And dammit, that’s just what
I’ve gone and done.”

Gary Snyder

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Price cut

80 Birch Lane80 Birch Lane. Bought for $1.385 million in 2002, town 70% assessment $1.578, first price in March ’09, $3,295 million. New price today, $2.495. Getting there.

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New construction at 63% of ask

6 Loading Rock Rd, on the market since January, 2008 with an original asking price of $3.695 million, sold yesterday for 63% of that, or $2.350 million. Over a year ago a client asked me about this property and I advised her to wait until the builder was ready to hear an offer of $2.3. The buyer didn’t wait for that happy moment and bought something else.

As Walt will happily attest, I am not the sharpest pencil in the box but if I can figure out that this house was wildly over-priced, what was with its builder? The reason some of us keep track of sales statistics is to be able to come up with some reasonable opinion of current market value and those statistics are available to builders, too. I have no idea of what this builder paid in interest over the past 18 months but he could have saved a bundle by pricing it right to begin with. And, considering what’s happened to the market since he first publicly announced his dream, he could probably have achieved a higher price way back then.

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Sex offender in Old Greenwich!

Police arrested one David Weil, a former financial advisor convicted of doing to a fifteen-year-old client what his peers do to older clients with impunity, at that hotel on Shore Road. I assume this is the guy, reported back in 1996 in the Daily News. Sam, “Why can’t I ever shut up?” Romeo was the first to chime in on this incident, as reported by Greenwich Time.

The arrest of a registered sex offender found staying in a Greenwich hotel has proponents of a recently voted down child safety-zone ordinance convinced their proposal needs to be law.

“This definitely makes our point,” said Sam Romeo, a chief proponent of the child safety ordinance and chairman of the Community And Police Partnership for the eastern end of town.

“We are no different than any other municipality in the state. We are vulnerable and we were trying to take an extra step of caution,” Romeo said. “Kids come first.”

Look – the guy was in a hotel, not at the beach, so Sam’s anti-loitering ban would have no effect. Furthermore, if the Daily News article is correct, Weil’s obligation to register as a sex offender lasted ten years and so should have expired three years ago. Romeo doesn’t want sexual predators in town – who does? But this says nothing about the merits of his proposed ordinance.

(Reached for comment, blog reader Front Row Phil denied holding any position on the issue and in fact denied he was speaking to this reporter at all. “You’re just making this up,” he said, “I’m here at my house having a cup of coffee with my Congressman Jim Himes and you’re wherever you are, typing up imaginary conversations. Get lost!” )

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