R. Neal Batson – A Retrospective SPECIAL EDITION
SPECIAL EDITION As many of you have heard, Neal Batson recently passed away at the age of 84. Neal was a giant within the firm, and within the profession. Graduating as the valedictorian of his Vanderbilt Law School class in 1966, Neal joined the firm in 1967 and continued to practice at the highest level until he retired in 2004. His numerous leadership roles within the firm include serving as the Chair of the Partners Committee, Head of the Litigation Department, and Leader of the Bankruptcy Group. Neal was also a renowned member of the broader legal community, with elections to both the American College of Trial Lawyers and the American College of Bankruptcy. His appointment as the Examiner in the Enron investigation brought national attention to the firm and was one of the most important engagements that the firm has ever undertaken. Those who knew Neal best came together to provide a tribute to this legendary firm figure. I hope you will all take some time to read more about the incredible life and career of Neal Batson. – Ben Johnson
SPECIAL EDITION SPECIAL EDITION Ben Johnson: In the summer of 1968, I returned to my home in Atlanta, a recent Harvard Law grad, to begin a oneyear clerkship for Griffin B. Bell on the U.S. Court of Appeals for the Fifth Circuit. That was the beginning of one of the most formative relationships of my life. I asked Judge Bell to give me his view of what Atlanta law firms I should seek to join when I concluded my clerkship. I had grown up the son of the Emory Law School Dean who had started his career as a young lawyer with what was then Sutherland Tuttle and Brennan. I wasn’t without sources of advice. When I asked Judge Bell, a former King & Spalding partner, he said that of his recent clerks the one who seemed to be the most excited about his experience was Neal Batson at the Alston firm. And so, I became aware of Neal at the Alston firm. I didn’t actually meet Neal for several years. In June 1971 after service in the army in Vietnam, I joined the Alston firm as an associate. When I got there, Neal was beginning to be a leader in the litigation department and became one of my earliest close mentors. Neal began to develop a bankruptcy practice (notwithstanding the advice of Ron Reid, who was chair of the litigation department, that he’d rather cut hair than involve himself in the bankruptcy practice). I got caught up in banking issues. In 1976, Jimmy Carter was elected President and named Griffin Bell as his Attorney General. Judge Bell’s law clerks were prime candidates for Justice Department jobs. Neal and I talked about our future and concluded that we were too young for top jobs and too old for just another life experience. So for the balance of our legal careers, we worked at the Alston firm. Neal built one of the great bankruptcy practices, which was highlighted by his service as the Examiner in the Enron case. Neal was legendary in his firm and practice leadership. He chaired the Partners Committee, which named me as Managing Partner in 1996. The respect in which Neal was held and the support he gave me made all the difference. Kit Weitnauer: I first met Neal when I was a summer associate at the Alston firm. One of my assignments was to prepare a memo on an arcane jurisdictional issue under the Bankruptcy Act of 1898. I was asked to meet with Neal to go over my work, which, thankfully, he found acceptable except for one thing – I spelled Neal’s last name as “Baston.” Luckily, I still got an offer. During my first year as an associate, I was assigned to work with three different lawyers, one of whom was Sadler Poe, a corporate attorney. Sadler was deeply involved in the Great American Management and Investment (GAMI) bankruptcy case. Neal needed more associate help on that case and suddenly all my time seemed to be taken up by the GAMI case, which I found to be fascinating and exciting. About this same time, the Bankruptcy Reform Act of 1978 became effective, and it seemed to me that it might be a particularly good time to try and focus my practice on bankruptcy cases. Neal thought
SPECIAL EDITION SPECIAL EDITION that was a good idea and thereafter my practice was increasingly focused on debtor-creditor and bankruptcy matters. I had the privilege of working with Neal on matters such as A.H. Robins Inc. and Cajun Electric Cooperative Inc. as well as the Enron examination. Neal was pretty intense when working on a case. I remember one long morning meeting in his office as he outlined a long list of things we (meaning me) had to get done on a complex matter. Around lunchtime I finally got back to my office and began to sort through many pages of notes I had taken and think about where to begin. Before I had even finished my review, Neal called to ask if I had an answer on one of the questions he wanted researched! Neal’s devotion to clients was unwavering. The needle on his ethical compass was always true. He spent endless hours helping young lawyers grow their practices through thoughtful mentoring and advice and by giving them significant responsibilities for challenging assignments. I am just one of the many Alston & Bird lawyers who owe him debts of gratitude that cannot be repaid. Grant Stein: After completing my clerkship with Bankruptcy Judge W. Homer Drake, Jr. in the U.S. Bankruptcy Court for the Northern District of Georgia, I joined the firm on August 1, 1983. During my time at the firm, I had the pleasure of serving as the Practice Group Leader for the Bankruptcy Group for several years. I retired on January 1, 2019, and have continued in a Senior Counsel capacity since then working on various matters ranging from the Pacific Life/Wardman Hotel case in the Delaware Chancery Court, Delaware Bankruptcy Court, and Maryland state and U.S. district courts, to cases for Atlanta Legal Aid. I worked with Neal Batson on various matters throughout my time with the firm, until Neal’s retirement in 2004. Those are the basic facts. The background is a bit more interesting. I had an extensive general background on bankruptcy because the family business since 1917, Rosen & Company, had been commercial auctioneering, which was heavily in bankruptcy cases in the early years. Then, while in law school at the University of Georgia, we had a visiting professor in the fall of 1979, Peter Coogan, who literally helped write the new bankruptcy law. He had been a practitioner at Ropes & Gray in Boston and adjunct faculty at Harvard. He was a professor who focused on the practice of law in the real world in explaining how the new Bankruptcy Code worked. When I sought employment to follow my clerkship with Judge Drake, I interviewed at Alston, Miller & Gaines, which led to separate interviews at Jones, Bird & Howell in anticipation of their merger in December 1982. I did not know at that time that Neal had been in Judge Drake’s wedding. Neal later told me that Judge Drake was candid with him that I wasn’t the best at anything, but that I was good at a lot of things and had the complete package. To be blunt, I was rough around the edges and felt lucky to be able to have an opportunity at a firm like the brand new, merged Alston & Bird. My transition from law clerk to lawyer was not easy. I had to learn a standard of excellence for practice and persuasion as a lawyer that is very different from the decision-making process of writing as a law clerk. I had to develop a new set of skills. Neal was patient with me in teaching me how to do the basics of being a commercial bankruptcy litigator. Thankfully, Kit Weitnauer also was patient in letting me develop because the work I did for him early in my career was not up to standard. My baptism, so to speak, took place with Neal on the second Colony Square bankruptcy in the mid1980s. The firm’s client was Prudential. In that case, I learned the basic foundation for my career. Among other things, Neal and I defended 31 depositions during December 1984. That meant tag teaming witness preparation and then defending. We had the earliest precursor for large electronic document discovery that exists today, and thankfully, Neal had three outstanding paralegals who worked on that portion of the case, supposedly under my supervision, to make sure it all got done correctly and timely. Neal also let me argue one of our discovery sanctions motions that I had prepared. The look on the senior litigator from the opposing law firm when he saw our most junior lawyer get up to argue against him was priceless. The Colony Square case made three trips to the Eleventh Circuit and one to the Supreme Court, and I was able to take the lead on all the briefing. Neal did all the arguing. Among the varied experiences I had was being asked to be a witness in the case for Prudential in both the Pittsburgh Bankruptcy Court and the U.S. District Court for the Northern District of Georgia as a third-year associate. The stress was incredible, but as Bernard Taylor used to say, if you can’t take the heat, get out of the kitchen. Even as a very junior lawyer I was included in every strategy meeting and was allowed to contribute significant ideas and approaches. All the efforts were successful under Neal’s leadership, but the opportunity provided to a young lawyer to learn by active participation was immeasurable. Neal also gave me my favorite compliment of my legal career one day, years later, when we were discussing the qualities of the lawyers in the group. One was smartest, one was the best writer, but Neal said that if he was ever in a street fight, he wanted me with him. In summary, Neal taught us all that our standard is excellence at all times. He was a superior courtroom advocate, so we all became strong courtroom lawyers with both the ability to argue a point and the ability to handle a fact or expert witness. Neal exemplified what it meant to be a zealous advocate, so we all became persuasive advocates before
SPECIAL EDITION SPECIAL EDITION Neal’s introduction to the unusual legal world of commercial bankruptcy practice began in January 1971, when the old Atlanta International Raceway filed bankruptcy under Chapter X of the former Bankruptcy Act and Neal was appointed as the initial Trustee in the case. Later that decade, in 1977, one of Alston Miller & Gaines’ largest clients, the real estate investment trust Great American Management and Investment (GAMI), filed for bankruptcy under Chapter XI of the former Bankruptcy Act, with Neal serving as lead counsel for the debtor. The case was one of national significance, leading to attorneys from the major bankruptcy firms in New York coming to Atlanta for the proceedings. The plan in the case was confirmed by Atlanta Bankruptcy Judge A.D. Kahn in February 1979. During this time, the bankruptcy playing field changed materially. The Bankruptcy Reform Act of 1978, the first major revision to the bankruptcy laws in over 40 years, was about to take effect in October 1979. In addition, due to the relationships Neal developed in the GAMI case and his involvement with the Southeastern Bankruptcy Law Institute (an educational organization that brought non-Georgia bankruptcy lawyers, judges, and professors to Atlanta each year for a three-day seminar on bankruptcy law), Neal began to lecture on bankruptcy law nationally at programs sponsored by ALI/ABA and PLI, among others. In combination, the credentialing and relationships built by Neal by being a superior attorney in the cases he worked on led him to become a significant player in the evolving commercial bankruptcy world. Neal also had two other differentiating attributes that helped him grow Alston & Bird’s bankruptcy practice. Unlike the overwhelming majority of bankruptcy lawyers from institutional firms who found their way to the practice as an adjunct to their commercial lending practices, Neal was an extraordinary trial lawyer and trial strategist. There were no judges that leaned our way and before those that didn’t. Neal was always appropriately professional in his conduct, and thus we learned to be professional and civil in our actions as lawyers. Dennis Connolly: I joined the firm on August 26, 1986, after graduating from law school at the University of South Carolina. When I joined the firm, I started in general litigation doing railroad work with Jack Senterfitt. I had lunch one day with Neal at the Commerce Club, where I expressed interest in doing bankruptcy work. He said “great,” and that was it. As a junior lawyer in the bankruptcy group, I mainly worked with Grant Stein and David Butler. But I also worked with Neal Batson on various matters throughout my time with the firm. In the late 1990s I did debtor work for LaRoche Industries when Neal was lead counsel for the debtor, and he did a fantastic job. At that time, the Delaware courts were so busy that they were using visiting judges. It was interesting and educational to watch Neal deal with all the judicial personalities and perspectives (in the LaRoche case, we had four different judges over 16 months). Neal handled it all, as usual, with style and grace. I also served as counsel for Neal as the Enron Examiner before Bankruptcy Judge Arthur J. Gonzalez. Neal was always someone who could not only look over the horizon and see the curve of the Earth, but he was also one who would check every citation and page and make comments on each one. He was truly a man of great interest and detail. Steve Collins: After graduating from Harvard Law School in 1977, I joined the firm. I retired at the end of 2022, but during my time at the firm I served on the Partners Committee (2006–2009), as the Hiring Partner (1990– 1992), as a Practice Group Leader (1997–2000), and as the firm’s General Counsel (2001–2022). When I joined the firm, there were only 75 lawyers, so you really knew everyone, and I was able to interact with Neal informally early in my career. During my time as a senior associate and new partner, Neal served as the head of the Litigation Department. My practice focused on securities litigation, investigations and enforcement proceedings, financial services litigation, and professional liability litigation, rather than bankruptcy. But in 2002–2003, I, along with Dennis Connolly, Kit Weitnauer, and many others, represented Neal as Examiner in the Enron bankruptcy, so I worked very closely with Neal during those intense years. My thoughts on that experience are detailed in the section on Enron. * * * * * * * * * * * * LEGAL CAREER
SPECIAL EDITION SPECIAL EDITION Examples of the complex cases Neal led as counsel included A.H. Robbins (Richmond, Virginia; represented the equity interests in mass tort case), Colony Square (Atlanta, Georgia; represented Prudential as lender in serial bankruptcy filing), LaRoche Industries (Wilmington, Delaware; chemical company), Southmark (Atlanta, Georgia and transferred to Dallas, Texas; Examiner); and Cajun Power Electric (Baton Rouge, Louisiana; represented the debtor). These cases, as well as Neal’s unquestioned skill and integrity, led to the final and most difficult case of his career. A.H. Robins Inc. A.H. Robins Inc. was a relatively early case in which Neal made his mark. It filed for protection under Chapter 11 of the Bankruptcy Code on August 21, 1985, after it and its insurer had paid approximately $530 million in settlements or to satisfy judgments relating to injuries attributed to a product sold by the company since 1970: an intrauterine device intended to prevent conception known as the Dalkon Shield. A.H. Robins was among the early mass tort cases. By 1972 several hundred suits had been filed against A.H. Robins, and over time “the number of lawsuits grew exponentially.” By “the mid-1980s, Robins faced almost 6,000 lawsuits from Shield victims.” U.S. District Court Judge Miles Lord increased the pressure on A.H. Robins by, among other things, ordering that executives of the company, including E. Claiborne Robins, Sr. and E. Claiborne Robins, Jr., be deposed. In addition, in a statement from the bench, Judge Lord “chastised Robins Junior and Senior, who were present, for not doing more to end the suffering they had caused,” and “lawyers and victims were instilled with a new-found zeal and impetus to bring Robins to justice.” Robins Senior and Robins Junior, both major shareholders in the company, retained Neal to represent them in their individual capacities in the A.H. Robins bankruptcy case. The bankruptcy case was resolved after the total liability for all Dalkon Shield claims was estimated by the court at $2.475 billion. The company’s plan of reorganization, which was confirmed on April 1, 1988, created two trusts for the future resolution of all Dalkon Shield claims. Robins Senior and Robins Junior contributed $5 million to each of the trusts. A.H. Robins was merged into a subsidiary of America Home Products, and the shareholders in A.H. Robins – comparable bankruptcy attorneys with his courtroom presence or skills, and while bankruptcy practice was focused on developing consensus for resolutions, Neal had a special ability to use the bankruptcy court to create the necessary leverage to find beneficial results for his clients through agreement or judicial determinations. As one professional friend described Neal when presenting him the American College of Bankruptcy’s Distinguished Service Award: “He is comfortable in the courtroom and at the conference table.” Neal also was a native Southerner, having grown up in Nashville. Many clients in the South preferred having one of their own as their counsel. This helped Neal be retained on the most difficult cases in the region. One final area that helped Neal become established as a preeminent bankruptcy attorney with national recognition was his work as a founder of the American College of Bankruptcy. The College exists to recognize those who are more than just excellent lawyers and insolvency professionals in the United States and internationally – it exists to recognize those who give back to their profession and communities. His leadership roles in the College were important in establishing the foundation to grow his bankruptcy practice and provide professional opportunities for generations of Alston & Bird lawyers that still ripple today. * * * * * * * * * * * * NOTABLE CASES
SPECIAL EDITION SPECIAL EDITION which included Robins Senior and Robins Junior – received American Home Products common stock valued at $700 million in exchange for their shares. In addition, “insiders” of the company – including Robins Senior and Robins Junior – were relieved of any future liability for their own conduct relating to the Dalkon Shield. Cajun Electric Power Cooperative Inc. In the early 1990s, Cajun Electric Power Cooperative retained Neal to assist its other professionals with a restructuring of its massive debt load. Cajun was an electric generation and transmission cooperative in Louisiana. Cajun’s board of directors was composed of representatives from its 12 member companies, all electric distribution cooperatives in Louisiana and that bought all of their electricity from Cajun. Those distribution cooperatives distributed the power they purchased from Cajun to their members (local residential or business customers). Cajun generated power at two wholly-owned fossilfueled generating plants, and Cajun also received power by virtue of its 30% interest in a nuclear power plant (River Bend), which it owned jointly with Gulf States Utilities (GSU), a large public utility operating in Louisiana. It was the 30% investment in River Bend that caused Cajun’s financial problems. Construction of the River Bend plant began in the late 1970s; the plant finally went on line in 1986. Massive cost overruns plagued the River Bend plant and pushed the construction costs to $4.2 billion. Cajun financed its investment in River Bend with loans from the Rural Electrification Administration (REA). Cajun’s ability to pay its $3.1 billion debt to the REA depended on the rates it could charge for electricity, which in turn impacted the rates that Cajun’s members could charge their members. The rates permitted by the Louisiana Public Service Commission (LPSC) were not sufficient to repay the REA, which led to an impasse between the REA and Cajun. After several years of out-of-court negotiations with the REA and the LPSC, Cajun’s debt to the REA was restructured into two promissory notes. The parties thought that Note A could be kept current given the rate structures in place. Note B, however, was only expected to be satisfied depending on the success of a pending lawsuit against GSU over the River Bend debacle. That’s when the firm’s initial involvement with Cajun’s restructuring ended. However, several years later, Cajun’s financial instability was exacerbated when the LPSC ordered Cajun to lower its rates. Cajun’s board appealed the order, but was unsuccessful. Because Cajun would not be able to meet its obligations to creditors under the lower rates, Cajun once again retained Neal, and on December 21, 1994, Cajun filed for bankruptcy under Chapter 11 of the Bankruptcy Code. During the bankruptcy, Cajun negotiated a settlement pursuant to which (1) its distribution cooperative members agreed to pay higher rates for electric power for the benefit of REA; and (2) GSU agreed to take back Cajun’s 30% interest in Cajun and provide $250 million in value to Cajun, but the REA stubbornly refused to approve it. Instead, the REA sought the appointment of a trustee, claiming that Cajun’s members had an inherent conflict of interest since higher rates would benefit the REA but harm Cajun’s members and their customers. A trustee was appointed and after that order was affirmed on appeal, Alston & Bird’s involvement with Cajun came to an end. REA’s strategy turned out to be shortsighted – by the time the bankruptcy case was concluded under the supervision of the court-appointed trustee, Cajun’s member cooperatives got a 25% rate reduction and Cajun had to pay GSU $100 million to get rid of its interest in River Bend. Enron In the spring of 2002, after an intense, nationwide search by the U.S. Trustee, Neal was selected to be the investigatory Examiner in the Enron bankruptcy case in New York. An Examiner is a court fiduciary – an investigative arm of the bankruptcy court. The Examiner’s job in the Enron case was to (1) investigate how Enron had gotten into the mess it was in – a Fortune 10 company that had imploded in a matter of weeks; (2) investigate Enron’s relationships with its officers, directors, lawyers, accountants, and banks; (3) identify claims that the bankruptcy estates had against any or all of those officers, directors, lawyers, accountants, and banks; and (4) report in detail on all of the above. Importantly, the Examiner had subpoena power, so he could compel production of documents and testimony in the course of his work. He was also able to review information that otherwise would not have been available due to the attorney-client privilege. In light of the claim deadlines under the Bankruptcy Code, the Examiner needed to work quickly in order to identify and preserve claims that might benefit the estates. There was an expression back then – you didn’t want to be the dog that caught the car and didn’t know what to do with it. Neal had caught the biggest car imaginable. None of the rest of the lawyers at the firm could fathom what to do with it. But he could and did. He engaged Alston & Bird as his counsel. He immediately set out to recruit and organize a very large, multidisciplinary team of lawyers, paralegals, and staff. For a significant portion of the engagement there were over 200 lawyers who worked on it, many full time. Given the size of the firm at the time, this was a very material call on the overall resources of the firm, but the firm stepped up and made it happen. Neal divided the lawyers into substantive areas: corporate, bankruptcy, litigation, and tax. He set up a multilevel reporting structure that funneled up to an Executive Committee, which of course he ran. In each area there were multiple teams, divided according to the work in that area during that phase of the examination. Because the teams would have to review huge quantities of documents quickly, the A&B Special Resources Group was established, which survives at the firm to this day. Neal also designated liaisons to coordinate with the Department of Justice, Securities and Exchange Commission, Federal Reserve, and U.S. Trustee.
SPECIAL EDITION SPECIAL EDITION The general approach was to begin by analyzing the many overly complicated transactions Enron had engaged in, from multiple points of view (corporate, accounting, tax, bankruptcy issues, etc.). The first and second reports were primarily devoted to that analysis. Then the examination turned to the investigation of claims against those who were involved in the transactions. That was the primary focus of the third and fourth (final) reports. Every fact set forth in the reports had a footnote citation to a piece of evidence, either a Bates-numbered document or a page of a deposition transcript. The investigatory aspect of the engagement lasted 1½ years. The teams developed a weekly rhythm. Nearly everyone was on the road every week. All internal strategy and coordination meetings were conducted on Monday mornings. Monday morning at 7:30 the group would begin with team meetings, followed by team leader meetings, followed by area meetings, followed by the Executive Committee meeting, all concluding by early afternoon. That left Monday afternoons and evenings for travel, and Tuesday–Friday for out-of-town activities such as depositions and interviews. Weekends were for return travel, regrouping, and planning for the coming week. If you consider the number of pages of documents subpoenaed and reviewed (millions), the number of witnesses deposed (over 200), the number of pages of reports filed (over 4,200), and the potential value of the claims identified (tens of billions of dollars), you begin to get an idea of the staggering nature of the undertaking. This was, and remains, the largest and most comprehensive examination in U.S. history. And no one has ever accused the Examiner of misstating a single fact. The reports helped the bankrupt estates recover billions of dollars for the benefit of creditors. Equally important, the reports explained to those impacted and to the public at large how and why the Enron meltdown occurred. And the reports have been cited favorably in numerous scholarly articles about corporate governance issues. Neal managed and directed all of this. He did it with a particular combination of qualities we don’t think we’ve ever seen in another lawyer. In the ultimate multipolar environment – the Enron bankruptcy case in New York – he could see farther down the road than anyone else, indeed well over the horizon. Frequently he would have the team do or not do things based on events that only he could foresee, events that would invariably come to pass. He was a brilliant and far-sighted strategist; in chess terms, a grand master. At the same time, his patient attention to detail was extraordinary. There was no aspect of the examination, however small, that escaped his focus and direction. He was as meticulous as any lawyer could be. Either of these characteristics could be the mark of a great lawyer. Finding both in the same lawyer is close to unthinkable. To put it in superhero terms – not too much of an exaggeration in Neal’s case – Neal was blessed with both telescopic and X-ray vision. He also worked as hard or harder than everyone else. And he treated everyone on the team, no matter how large or small their role, with respect. Due to the time constraints, Neal had to push his large team hard; but he knew how to push in a way that made the group feel challenged, not overwhelmed. The success of the examination was the direct result of all these qualities. Everyone involved felt it was a great privilege, and a career highlight, to work with Neal on the examination. Perhaps the Wall Street Journal summarized it best: “The examiner, Neal Batson, is by all accounts a respected and conservative bankruptcy lawyer. And despite the fact that the report is a masterpiece of legal understatement, readers will find it difficult to suppress the cry: Guilty! The Batson report is deliciously specific, naming names via internal memos, phone conversations, faxes, sworn testimony and, of course, the white collar equivalent of the smoking gun – e-mails.” * * * * * * * * * * * * * * * *
SPECIAL EDITION SPECIAL EDITION This retrospective arises from the debt felt by a close band of lawyers who need to leave some record of what an impact one partner had in building Alston & Bird. When you are part of a firm that is now planted in cities across the globe, it is wise to take a moment and reflect on how a firm in Atlanta moved to the firm of today. Neal Batson was one of many who made it happen, and one of the best. This retrospective is, on the occasion of Neal’s death, an appreciation of one of our best.
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