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Spain's Hell Is A Bankruptcy Lawyer's Heaven

Tyler Durden's picture





 

You've seen Spanish youth unemployment rates soaring; been brow-beaten with data on the dramatic rise and acceleration of Spanish bank non-performing loans; and the rate of Spanish capital outflows chart is now ubiquitous; but where there is pain, there is also pleasure. As we are always looking on the bright-side and trying to find a silver-lining, Michael Cembalest provides just such a chart. To wit, the unprecedented surge in corporate bankruptcies in Spain; without question, a boon for the bankruptcy-lawyer industry and perhaps just the economic boost the country needs. Tongue-out-of-cheek, this is just a disastrous chart of reality on the ground.

 

Source:JPMorgan

 


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Wed, 09/05/2012 - 11:13 | Link to Comment Jason T
Jason T's picture

in bankruptcy, wealth transfer from the creditor to the debtor.  Debtor Winning!

Wed, 09/05/2012 - 11:15 | Link to Comment Abraxas
Abraxas's picture

Except if there's collateral...

Wed, 09/05/2012 - 11:16 | Link to Comment Newsboy
Newsboy's picture

Feast for a Crow.

Wed, 09/05/2012 - 11:32 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

 

I was gambling in Barcelona....I took a liittle risk.

 

Send lawyers, guns, and money......Dad get me out of this!

http://www.youtube.com/watch?v=QPlMmwOq7U8

 

Wed, 09/05/2012 - 15:20 | Link to Comment CPL
CPL's picture

Yes but crows feast as they are biologically instructed.

 

Lawyers need money.  In a country that's so deep under water in debt who as a Lawyer would work for someone that can't honor LARGE debts, pension obligations, restitution promised (somewhere like Canada, imagine none of the native bands getting their piece of change for getting fucked by England).

 

I've never understood that concept of a bankruptcy lawyer.  What are the chances they actually get paid back.

 

"I'll take the case.  How will you be paying?"

"Cheque."

"NEXT!!"

 

Seriously what lawyer is stupid enough to entertain the idea that they will be paid in anything but a job well done and a hand shake is beyond my meager intellect.

 

If there are any BK lawyers present I've never quite understood the idea at all.  On a individual level I understand completely what happens from friend's and family experiencing it first hand.  Companies the same, both public and private watching from a distance.

 

Where would a country even begin to throw itself over the rails financially.  I can't honestly think of any specific precedence except New Zealand.  Iceland is hardly saved from it's bumblefuck adventure., in fact it reversed course last year on attempting to re-enter the EU for some ungoddly reason.

Wed, 09/05/2012 - 15:49 | Link to Comment Poetic injustice
Poetic injustice's picture

They do things differently. It's like a shakedown, and interested parties through lawyer get assets for really cheap prices. Or government appoints lawyer, who gets paid AND gets sweet deals from interested parties.

Wed, 09/05/2012 - 11:18 | Link to Comment doomandbloom
doomandbloom's picture

Bullish.....

Wed, 09/05/2012 - 11:19 | Link to Comment Dr. Engali
Dr. Engali's picture

At least somebody is doing something right. That chart needs to be a lot bigger and it needs to include a few governments.

Wed, 09/05/2012 - 11:18 | Link to Comment rubearish10
rubearish10's picture

Fresh Start = No Shame. Our world today folks.

Wed, 09/05/2012 - 11:21 | Link to Comment Belarusian Bull
Belarusian Bull's picture

Oh, man! As a fellow bankruptcy lawyer, i wish we could get this number of cases, our market is so saturated here :(

Wed, 09/05/2012 - 11:21 | Link to Comment BandGap
BandGap's picture

OMG!

Wed, 09/05/2012 - 11:23 | Link to Comment Brazillionaire
Brazillionaire's picture

I always wondered how often bankruptcy lawyers actually get paid. I mean, isn't that like a cab driver picking up a hitchhiker?

Wed, 09/05/2012 - 11:31 | Link to Comment Winston Churchill
Winston Churchill's picture

They come ahmead ahead of everyone in the creditor queue.

Strangely their fee always coincides with the liquidatable free assets.

If there are few, its amazing how quickly thing are wrapped up.

Wed, 09/05/2012 - 11:31 | Link to Comment DaveyJones
DaveyJones's picture

exactly

Wed, 09/05/2012 - 11:34 | Link to Comment Brazillionaire
Brazillionaire's picture

So, when the client asks, "How much is this going to cost?", the answer is, "How much have ya got?"

Wed, 09/05/2012 - 11:50 | Link to Comment Belarusian Bull
Belarusian Bull's picture

Not always, depends on a specific country legislation.

In Belarus, it is true about the queue, but the fee for the lawyer is decided by the creditor committee(which is a good point, since they own the assets now).

The fee for the assetless cases is standart and is paid from the state budget.

Wed, 09/05/2012 - 13:38 | Link to Comment TeresaE
TeresaE's picture

In the US, the 2005 Bankruptcy Reform Act (or, complete and legal ass-screwing via the banks), the lawyers got their kife first.

There are hundreds of thousands of Americans that cannot afford to file for bankruptcy.  My guess is they are being hauled into court and losing by default (most don't show up at their own trial), then eventually - if working - have their paychecks garnished or assets stolen. The first thing a BK lawyer tells a person/business is:  quit paying on any debt and save that money to pay me.

What a great country.  The bankers, and their paid-for-attorneys, always win.

Wed, 09/05/2012 - 14:28 | Link to Comment Belarusian Bull
Belarusian Bull's picture

You mean filing for bankruptcy as a private person?

Our bankruptcy law only governs conpanies and individual enterpreneurs, so i can't really say anything, but there is a list of your assets which can never be taken away if you stop paying your debts.

These include your only living place (flat, house, etc), your clothes, your furniture, your food e.t.c

So, if you are good at hiding your assets, you can screw some banks over :)

Wed, 09/05/2012 - 11:24 | Link to Comment Winston Churchill
Winston Churchill's picture

The really scary part of this chart is the piece it cannot show.

Every BK lawyer thats been around a long time will tell you that the

real spike happens after the economey starts getting better.

With all reserves used in the hard times ,overtrading causes more businesses to fail

then, than before.

Thats of course in the normal business cycle,not the current death spiral we are ALL in.

Wed, 09/05/2012 - 11:25 | Link to Comment Brazillionaire
Brazillionaire's picture

Saved by the death spiral!

Wed, 09/05/2012 - 12:36 | Link to Comment Al Huxley
Al Huxley's picture

Well, fortunately there's no sign that economy will be getting better any time soon.

Wed, 09/05/2012 - 13:20 | Link to Comment Nobody For President
Nobody For President's picture

It is always good to have a little positive thinking on the site, Al.

Yep, things are gonna get worse before they get worse.

Wed, 09/05/2012 - 11:24 | Link to Comment NEOSERF
NEOSERF's picture

Wow, if anyone thinks that Spain is coming out of their Depression anytime in the next 3 years...think again...same issues have already started in Italy which is bigger than Spain...if Greece has cost at least $400b, then Spain will cost $2T and Italy $3-4T...which of course really is inconsequential as the ECB "bad bank" will rise from $3T to $8T and then they will move the bad loans off to some Fannie/Freddie type entity and the game will continue...

Wed, 09/05/2012 - 11:26 | Link to Comment NEOSERF
NEOSERF's picture

Interestingly, as we are all "back from summer", the volumes on my stocks today are worse than yesterday...all down around 75% of "normal" whatever that is...something really is broken

Wed, 09/05/2012 - 13:22 | Link to Comment Nobody For President
Nobody For President's picture

Like my bank account?

Wed, 09/05/2012 - 11:28 | Link to Comment No Euros please...
No Euros please we're British's picture

You sure JPMorgan didn't accidentally send the graph of their silver short position.

Wed, 09/05/2012 - 11:28 | Link to Comment SoundMoney45
SoundMoney45's picture

The good news is, this statistic will eventually return to the mean.  The bad news is, the return to the mean may be be caused the current status quo continuing, and there being few corporations left to file for bankruptcy.   

Wed, 09/05/2012 - 11:35 | Link to Comment Brazillionaire
Brazillionaire's picture

Problem solved!

Wed, 09/05/2012 - 11:29 | Link to Comment Meesohaawnee
Meesohaawnee's picture

dont worry.. the red algo cleanup crew is revin up the vacume tubes.

Wed, 09/05/2012 - 11:31 | Link to Comment DaveyJones
DaveyJones's picture

I thought most people's hell was a lawyer's heaven

and the reverse is equally true

Wed, 09/05/2012 - 11:52 | Link to Comment Thisson
Thisson's picture

You have it backwards.  When you have a *real* problem, a lawyer is going to be one of the first people you call.  Got arrested for drunk driving?  Want to get married?  Divorced?  Someone died?  You're going to be really grateful to have a lawyer in these circumstances, and if you can't have one, you're going to be very unhappy.  Anyone who bashes lawyers for being lawyers is very naive or inexperienced in the general troubles we all face at certain times of our lives.

Wed, 09/05/2012 - 12:24 | Link to Comment bank guy in Brussels
bank guy in Brussels's picture

What is deceptive in your praise of lawyers, is that lawyers in corrupt cultures - like the USA - typically defraud and betray the clients who pay them ... this is a disease of Anglo cultures, with the US being the worst case:

Divorce lawyers rob their clients of assets

Lawyers 'defending' people and small companies, steal their money via legal fees and take a bribe to sabotage the case for the big company

Public defenders help send hundreds of thousands of innocent black people and Mexicans and poor white people to prison, via plea-bargain 'extortions' ... if they don't play the government game they lose their jobs and salaries as 'public defenders' ... Almost no one in America gets a jury trial, that is mostly in movies ... and the judges rig those by not allowing evidence and 'instructing' the dumb-ass jury

In general lawyers make money by creating trouble, extending the trouble to maximise the fees they extort and rob from the client, and then taking a bribe from the wealthier side's lawyers after the client's fees have been stolen

Cultures with many fewer lawyers are much healthier

Wed, 09/05/2012 - 16:10 | Link to Comment Thisson
Thisson's picture

So your argument is that in corrupt cultures, there is corruption?  Well, duh.  But you can't paint everyone with the same brush.  The problem in the US is in how laws are created and enforced (or not enforced), not in how things are adjudged when there is a legal contest.  And while there is a problem with certain lawyer fees due to a kind of market failure (particularly with class actions, as is noted below), I completely disagree with you about US lawyers "stealing" fees and taking bribes, about public defenders being part of the problem, and especially about judges "rigging" things by excluding evidence.  Judges are *supposed* to exclude things that are prejudicial, unreliable (like hearsay) or obtained in an unlawful way. Cultures with fewer lawyers have less access to justice than ours.  That is a fact.  It is also a fact that laws protecting private property are essential to liberty, and thus a properly functioning legal system is a necessity.  You'd rather have a kangaroo court system?  The US legal system is excellent.  It's the legislature and executive branches that are the problem.

Thu, 09/06/2012 - 18:18 | Link to Comment DaveyJones
DaveyJones's picture

funny thing, I am a lawyer

so are most of your congressmen

I must really suck

Wed, 09/05/2012 - 13:28 | Link to Comment Nobody For President
Nobody For President's picture

Apparently you have never been involved in a class action suit - I was in a couple involving stocks of internet/communication companies that flat lied on ther financials. Recovery was finally made after 6+ years. 

Just guess who got 80% of the recovered funds awarded to them for fees?

This is endemic - watch the MFGlobal scene play out - bet the lawyers get (on all sides) way more money than any of the creditors at the bottom - i.e. the account holders who got stolen from - oops, whose funds 'vaporized'.

Wed, 09/05/2012 - 18:20 | Link to Comment TruthHunter
TruthHunter's picture

Thissen:  "You have it backwards.  When you have a *real* problem, a lawyer is going to be one of the first people you call.  Got arrested for drunk driving?  Want to get married?  Divorced?  Someone died? "

Sounds like most people's hell...

being needed...sounds like lawyers heaven

Its hell, when a lawyer's your angel.

 

BTW, you've GOT to be a lawyer!

Wed, 09/05/2012 - 11:33 | Link to Comment Zero Govt
Zero Govt's picture

that chart is just for bankruptcies going into the official wind-down system ...you can probably double or triple that for off the books bankruptcies like small-medium sized business that can wind themselves down

so much for Brussels, the ECB's and national Govts recovery strategy

so can we wind up Govt now as a sad expensive joke at protecting, preventing or curing us from any economic malaise? Politcians cannot solve any economic puzzle, these toerags cannot even manage their own finances without running into complete farce

Game Over Govt

Wed, 09/05/2012 - 11:49 | Link to Comment Ungaro
Ungaro's picture

Betcha there's not a bank among them! 

Wed, 09/05/2012 - 12:37 | Link to Comment PavlovPup
PavlovPup's picture

Bet there will be soon

 

Wed, 09/05/2012 - 12:39 | Link to Comment vertexa
vertexa's picture

RTRS: Former minister Tremonti forms new Italian political movement

Wed, 09/05/2012 - 13:30 | Link to Comment Nobody For President
Nobody For President's picture

Wonder what the same chart for Greece looks like.

Wed, 09/05/2012 - 17:06 | Link to Comment MachuPicchu
MachuPicchu's picture

It needs to be measured relative to the number of bussinesses created or running in a period of time.. That chart tells nothing..!

Thu, 09/06/2012 - 01:34 | Link to Comment agagshoes
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Sat, 09/29/2012 - 00:33 | Link to Comment Kimale
Kimale's picture

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