the town dandy / By Hank Sims

Larger than life

(April 26, 2007) “Why is it that we honor the Great Thieves of Whitehall, for Acts that in Whitechapel would merit hanging? Why admire the one sort of Thief, and despise the other? I suggest, ‘tis because of the Scale of the Crime.- What we of the Mobility love to watch, is any of the Great Matices, Greed, Lust, Revenge, taken out of all measure, brought quite past the scale of the ev’ryday world, approaching what we always knew were the true Dimensions of Desire. Let Anthony lose the world for Cleopatra, to be sure,- not Dick his Day’s Wages, at the Tavern.”

-Thomas Pynchon, Mason & Dixon

Well, baby, it’s all done - don’t expect the Hon. Richard S. Schmidt, he of the Corpus Christi branch of federal bankruptcy court, to rule for anyone but Charles Hurwitz from here on in. There’ll be a lot of jabber for quite a few months to come. Everyone will go through the “motions,” if you’ll pardon me. As for myself, I’m willing to stake all that remains of my tattered reputation on the proposition that Hurwitz and his Maxxam Corp. - parent company of the Pacific Lumber Company for the past 20-odd (very odd) years - will get everything they desire out of Judge Schmidt. That, no doubt, is the reason Hurwitz and his people chose him in the first place. Well played, sir.

What remains to be seen is whether a biddable judge will be enough.

The preliminaries in the Pacific Lumber bankruptcy case are out of the way. Everyone has cleared his throat, so to speak. The opening movement ended last week, when Schmidt released the long-anticipated ruling that the company’s creditors, the state of California and the Office of the U.S Bankruptcy Trustee were all wrong, wrong, wrong in asserting that the interests of justice would demand that the case be moved to California.

The ruling was expected - when the trial on the question was held a month and a half ago, Schmidt didn’t bother to conceal much of his hand. The question, for spectators, was how he’d go about justifying his decision. Would he accept Maxxam’s “nerve center” argument? This one went: Despite the fact that Pacific Lumber’s 200,000 acres of timberland, all its operations and most of its creditors reside in California, a small coterie of company directors make their home in Texas, making venue proper there. Or would he go with the ludicrous “phone booth” defense? In other words, would he rule that he should get to keep this entertaining matter in his own courtroom because a few months prior to filing bankruptcy, Maxxam set up a fake company five blocks from the courthouse, and then proceeded to pour all of its California assets into this empty vessel on the day before bankruptcy was declared?

In keeping with this week’s text, Schmidt favored the more outlandish argument. Yes, Palco’s true brain trust was in Texas, he allowed. As evidence, the learned jurist approvingly cited a 1988 “Houston Chronical” [sic] article that named Hurwitz “Houston’s only World-Class Corporate raider.” But this was more or less beside the point. The main thing was the nothing company Maxxam recently set up in Schmidt’s home town - the company code-named “Scotia Development” - was no sham. And since “Scotia Development” was in Corpus Christi, the whole show gets to stay in Corpus Christi.

But all Scotia Development ever was was a 350-square-foot office, empty but for the rented furniture, you say! Right, says Schmidt, but big deal. What about me? “first office,” he writes in a footnote. Haw haw! Dry your eyes, folks - an affiliated business is an affiliated business, and that fact lets Palco go bankrupt on Hurwitz’s home turf.

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