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Warren Graham's Legal Blog: January 2009

Warren Graham's Legal Blog

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Location: New York, New York, United States

I am a practicing lawyer who lives and works in Manhattan, and specializes in Bankruptcy, Corporate Restructuring and Creditors' Rights, Commercial Litigation and Real Estate Law. I grew up in the New York City Area, and am a graduate of the University at Buffalo (B.A. 1976) and Fordham University School of Law (J.D. 1980). I have a wide variety of interests, but am particularly interested in history, politics, economics/finance and religious affairs, and am a frequent writer on a variety of those topics, and others. On a personal note, I'm a 54 year old man, married for 27 years, with two daughters, ages 24 and 20, respectively. Legal topics of interest may be found on my blogsite,, while non-legal commentary may be found at The content of these sites will be centralized and easily accessed locations for both legal and non-legal analysis and commentary, as well as a description of my legal practice for clients and potential clients. Keep checking back, as I expect the content to change and grow regularly.

Friday, January 02, 2009

A Special Word to Clients and Prospective Clients

From: Warren R. Graham

I am, as you can see from my profile, an attorney specializing in bankruptcy and creditors’ rights, although my firm, Cohen Tauber Spievack & Wagner LLP, is a full-service commercial firm which can help your business solve your problems efficiently, economically, and with a practical understanding of your business needs. I invite you to e-mail me or contact me by phone in connection with any legal needs that you have. Consider the following:

What can my colleagues and I do to solve YOUR problem?

Our bankruptcy and creditors’ rights practice has several components:

--In representing distressed enterprises, we partner strategically with ailing, closely-held or family-owned businesses to save their companies, by keeping the ‘wolves from the door’ while working to recapture the value that made the companies succeed in the first place.

--In representing creditors, we help develop strategies to assist creditors caught in the bankruptcy/restructuring maze to recover on their claims quickly and to minimize their problem receivable.

--In representing Landlords, we help real estate owner/developers minimize, or even eliminate the risk of getting stuck in protracted tenant bankruptcy cases, in which the owner/developer frequently has to deal with uncertainty, while ultimately realizing little or none of the leasehold value.

--We help develop strategies for buyers of distressed assets to maximize the realization of value while defraying legal and due diligence expense through the vehicles of ‘break-up’ and ‘topping’ fees.

If any of these solutions sound right for your particular issue, please feel free to contact me to schedule a complimentary consultation. Also, feel free to request your absolutely free subscriptions to the two e-books I have published, one crafted especially for the creditor and landlord who need to understand their rights under the new bankruptcy laws and the other directed at owners/managers of closely-held family businesses in financial distress. Feel free, at the same time, to ask to be placed on our list for monthly updates and bulletins from our bankruptcy and creditors’ rights practice. There is no obligation, of course, and you can always “opt out” at any time. All you need to do is leave your name and contact information with us, and we will take care of the rest.

Also, let us know whether your organization might be benefited by receiving an in-person presentation or seminar by attorneys from our creditors' rights and bankruptcy department at our firm to help you understand these changes, and what they might mean to your business. You simply cannot afford to rely on your understanding of the bankruptcy laws as they existed before October 17, 2005. The changes are, quite simply, too profound and wide-ranging. Please do not hesitate to bookmark this site, and check back regularly for recent developments and reports which will, I expect, be of value to you in your business. I look forward to hearing from you.


Thursday, January 01, 2009

The Harvest of Failure: Why We Need to Re-plant Now!

In the midst of the economic downturn and chaos, our Government (and, most likely our Government-in-Waiting), is pinning its hopes for recovery on a seemingly endless stream of bail-outs and stimulus packages. In short, the same old failed ideas are being trotted out to address our problems. Predominant among these ideas is that, if only the public could once again begin to spend, everything would be alright. To date, the consumer, plagued by fears of imminent layoff, has failed to take the bait. The solution, according to the conventional wisdom, is to “fund” the spending spree by printing more money, sending it to Joe/Jane Sixpack, and expecting him or her to revert to the old habit of spending more than is affordable. At the same time, the Government is embarked upon what appears to be a bail-out of nearly every type of business in America. It started with the banks (which prompted nearly every financial institution to “become” a bank), and expanded to the automobile industry. Now, calls for bail outs are, predictably, coming from the retail and real estate industry. Where does it stop? The answer is that it doesn’t. This was, from the outset, an idea doomed to failure and a slippery slope, indeed.

What led us, in large measure, to the current pass in the economy was overspending and over-consumption by the consumer. The result of this was far too much debt. The consumer, in turn, used increasingly appreciating home values as a “piggy bank,” by serial refinancings to retire high-interest, non-tax-deductible credit card debt. This “system” worked fine until home values started to fall, as a result of over-development and over-leverage. This was inevitable, and was precipitated mostly by a false sense of security by the public in its ever-increasing income, asset values, and a steady rise in the financial markets. Never mind Madoff; the entire American economy, before recent events took their predictable toll, was built upon a house of cards and a giant Ponzi Scheme.

Now, the Government offers us more of the same as an antidote. It proposes to flood the economy with dollars, hot off the presses, so as to “encourage” (meaning: force) consumer spending. There is talk of governmental rewriting of mortgage obligations, even to the extent of reducing principal balances (the constitutionality of governmental interference in private contracts notwithstanding). Let’s not worry about inflation, our leaders say; we will cross that bridge when we come to it. In the meantime, let’s prop up failing (and doomed to fail) businesses by incentivizing consumer spending, guaranteeing asset values and rescuing everything from General Motors to Sal’s Pizza Parlor. But make no mistake about it: there will be a day of inflationary reckoning, and we will have to “cross that bridge” sooner than most of us think. The flooding of paper money into this economy can only end in a disastrous inflationary spiral at some point down the road. Moreover, the issuance by government of an endless supply of money, and assumption of unlimited debt by loan guarantees and sale of debt instruments will encumber several generations of Americans, at least.

No, the last thing this Country needs is to return to a day when more than two-thirds of its economy was driven by extravagant, excessive irresponsible consumerism. That, friends, is what got us in this fix to begin with. Our consumerism is a weapon, though, which, if properly used, can do what is necessary to improve our economic lot. I speak, of course, of the creation of industry and jobs. For too many years, this Country has failed to manufacture almost anything within its borders, and for the benefit of domestic owners. The so-called “Global Economy” has served as a mechanism for exporting jobs to take advantage of cheap labor in the developing world, or to allow foreign companies to operate freely here, unencumbered by, among other things, our labor costs. This has all been justified by the illusion of “free trade.” Free trade, you see, implies a two way street. Does China allow us a level playing field for our exported goods? Does Japan? The EU? Of course not. The result, then, is that we are “free trading” only with (and against) ourselves.

We have one economic weapon, and one only, in our arsenal: our rampant consumerism. So long as foreign manufactured goods can be made more cheaply overseas, and sold here in such a manner as to make American industry non-competitive, it is naïve to suppose that we will buy American-made goods out of a sense of patriotism. We have to level the playing field HERE, and for our own benefit. China will not stop selling here no matter what we do. The Chinese consumer base is too small to purchase all those goods, notwithstanding all that overblown talk about a burgeoning Chinese middle class. The same goes for all our trading partners. They must, and will, sell to us, even if the cost of doing so rises, and as we begin to protect our labor force and industry by (yes, I said it), protectionism. Foreign business should be made to “pay to play.”

Once the economy improves, we will no doubt return to our over-consuming natures. One hopes, of course, that this conduct will be somewhat tempered by recent events, much as the spending and saving habits of our parents and grandparents were informed by the Great Depression in the 1930’s. But no matter what, we will still be a consuming nation. Let foreign countries export to us. Let U.S. companies move their jobs overseas. But let’s at least charge them for the privilege. And for God’s sake (and America’s), let’s start consuming our own stuff for a change.

Unlimited government interference in our markets, in the form of printing more money, throwing it at consumers and businesses to induce us all to wallow even more in a sea of debt is a short-sighted and ultimately a destructive policy. Aside from its ultimate inflationary consequence, and creation of a debt burden which will long outlive us, it virtually guarantees the destruction of private industry as we know it. Government will have a share in nearly all U.S. business, leading to over-regulation, and a commitment by John Q. Taxpayer to throw good money after bad, in an attempt to protect our nationalized “equity” in dying businesses. When the smoke clears from this orgy of easy money, and staving off of natural business failure, I fear that the America we all love will be unrecognizable. This would be the biggest tragedy, indeed, especially given that a real, long-term solution is right under our noses. Let’s hope that our elected representatives, for once, have the sense and intestinal fortitude to see it, and to implement it.

The future of this nation depends on it!

Warren R. Graham
Copyright 2008

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