Due Diligence or: Why Do You Need So Much $#*! From Me?
Due Diligence or: Why Do You Need So Much $#*! From Me?
The Ancient Greeks had odd habits. For example, they played sports in the nude (odd, though not necessarily bad). Democracy and slaveholding were not mutually exclusive (regrettably not historically odd; though necessarily bad). And, they introduced one of the more pernicious human practices: the Socratic Method. Yet, weirdness aside, the Greeks recorded myths and tales that still inform charting of the heavens, psychology, and playwriting. In that last category is the legacy of Greek Tragedy. The tragic theme spans the millennia in Greek drama, from brutal patricide in the 5th-century-BC works of Sophocles to the equally-famous calamity of superfluous nausea-inducing Avatar-bandwagoning 3-D treatment of Clash of the Titans (ca 2010).
As it happens, we turn not to Clash of the Titans (sorry), but to Sophocles to set the tone of our present pontification. For it was Sophocles who's credited with the concept of "don't shoot the messenger" and I discover sometimes I am the messenger. Recall, in Antigone, a ca 442 BC work, the author wrote, No one loves the messenger who brings bad news. Shakespeare put it a bit more elegantly in Henry IV, Part II*:
"Thou shakest thy head and hold'st it fear or sin to speak a truth. ... Yet the first bringer of unwelcome news hath but a losing office, and his tongue sounds ever after as a sullen bell, remember'd tolling a departed friend."
Why don't people talk like that anymore? They should.
So, how am I the messenger? It's about "Supporting documentation."
In filing a chapter 7 or 13 bankruptcy, the debtor must provide to a case trustee, a distinct set of supporting documentation. These docs must substantiate the facts in one's bankruptcy petition. They also inform what goes into the petition in the first place. In directing the debtor what to provide, the attorney exercises "due diligence." Due diligence is defined as, "the act of nagging a client." [Per 11 USC 101(52)(A).] The trustee, in turn, must exercise due diligence by checking it all (so you want to turn in only what's necessary; if it's redundant, they still have to read the damn stuff, no matter how painfully dull it is.)**
So what are these due-diligence items? Tax returns, tax transcripts, valuations, payoff statements, etc. Nothing too abstract or abstruse. Yet, sometimes (not many times), clients revolt. He who delivers the message to submit tax forms may suffer unexpected vitriol.*** As in, What the (bleep), why am I put out, what am I paying you for?
Yet, we announce at the outset that bankruptcy is a cooperative effort between attorney and client. I sum it up thus: give us the pulp... we'll make the paper.
The paper is that fat stack of stuff we call the bankruptcy petition. And for that paper we need pulp... the returns, the transcripts, the statements, confidential material to which the client retains unique access. Only the client has the pulp-- he need just give it up.
Certain clients may prefer lackadaisical, enabling counsel who don't insist upon what's needed-- or don't know what it is. If one favors expediency over preparation and prudence, one assumes risk for ill results.
The messenger doesn't blame his shooter (too much). It's expected: the clientele is stressed. Just put it in perspective. If one wishes to discharge thousands in debt for a penny on the dollar, then yes, one must uncover pay advices, tax returns, and similar pulp. How hard is that? Its level of taxation does not quite approximate the Spartan stand at Thermopylae or watching Clash of the Titans in 3-D. On the scale of difficulty, procuring bankruptcy-pulp is somewhere in the middle, next to naked track-and-field.
__________
*Insofar as Henry IV was a sequel to the third Henry---who was of such unimportance that he didn't merit a play from the Bard--and a prequel to Henry VI, who was awarded not one, nor two, but a trilogy of plays, the multi-part Henry IV work presaged the contemporary phenomenon of sequel mitosis. This being the milking of a brand name: see such mouthfuls as "The Twilight Saga [IV]: Breaking Dawn Part I" or Harry Potter [VII]: The Deathly Hallows Part II." They say this is somewhat disruptive of the narrative continuity . For example, between episodes, one might forget what a Deathly Hallow is.
**Indeed, the level of boredom may approximate viewing The Twilight Saga [IV]: Breaking Dawn Part I.
***Upon a not-prohibitively-difficult request, a client may promptly begin to pull his hair out and spew obscenities. This is funnier than it sounds because it is true. Such reactions might be uncalled for--I do not know.
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Sunday, December 4, 2011