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Eat What You Kill: The Fall of a Wall Street Lawyer

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Read for: lessons in bankruptcy law and practice, junk bonds, vulture investment, corporate law generally, white collar crime and trial tactics, and a nuanced ethical exploration

Avoid if: seeking simple answers, easily bored by thorough and balanced legal arguments

"Eat What You Kill" explores in excruciating detail the rise and fall of John Gellene, bankruptcy attorney extraordinaire, who failed to disclose a conflict of interest which landed him in prison.

Yet Milton Regan's book offers more than an ethics case study. A blow-by-blow survey of corporate restructuring, bankruptcy litigation tactics, and white collar criminal prosecution, Regan's book overwhelms with useful instruction. Though focused upon Gellene's life at law, Regan uses it as a prism to explore the environment of many others swimming in the same waters.

Lay readers may find the professorial tone both vice and virtue, as the riches grow tiresome to anyone uninterested in following the pros, cons, counter-pros, and counter-cons of various litigation tactics and arguments. Within this web of contextual detail, the ethical story threads diverse legal doctrines.

Offering no simple denunciations or defenses, Regan sees Gellene as merely a lawyer who tends to lie to avoid the consequences of his own negligence. Flawed, perhaps, but hardly a gross flaw.

Refraining from potshots or praise permits Regan to hold Gellene accountable while looking more deeply into the practice of corporate law itself. Regan's conclusions seem to be that lawyers, preoccupied with the business of law, lose sight of its spirit.

Hats off to Professor Regan for his prodigious research and painstaking, vivid recreation of the saga of a prominent lawyer's startling rise and fall --an all-the-more remarkable achievement given Gellene's refusal to cooperate in this project. This is an amazing look-behind-the-curtain as to: how large law partnerships reward and penalize their producers and non-producers; how complicated bankruptcy negotiations unfold; how investment bankers and vulture investors exploit weakened corporations; how a brilliant professional succumbed under pressure to career-ending ethical blunders; and much more. An extremely valuable reading experience for practioners and students of law and business that deserves to be a best-seller.

A better read, simply as a page-turner, than many novels.

Gellene, the protagonist/anti-hero of this book, graduated Phi Beta Kappa and summa cum laude from Georgetown with degrees in philosophy and economics. He graduated cum laude from Harvard Law School, then clerked for Justice Morris Pashman of the New Jersey Supreme Court. Pretty impressive resume, eh? He had the "world at his feet," yet before much more time had passed he was in a prison cell.

This book should act as a warning on several levels. On one of them, it warns a certain type of investor about the nature of the chapter 11 process (in the course of which Gellene made the false statements that led to his downfall). Vulture investing in the instruments of distressed companies going through this process isn't an explicit theme of the book, one it ends up here nonetheless. There are traps for vultures, too.

Eat What You Kill: The Fall of a Wall Street Lawyer is the story of John Gellene, the only attorney to ever go to jail for making an incomplete disclosure of "connections" to creditors and parties in a bankruptcy case. While it is clear that Gellene committed an ethical lapse, the fact that he was prosecuted, convicted and served time is truly surprising. Others have failed to disclose much more and have suffered much lighter consequences. As a result, the question of why this particular case resulted in a prison sentence rather than a slap on the wrist is really interesting, particularly to lawyers.

This is a book about lawyers and the law, so that a little background on the law is helpful Representing large companies in bankruptcy is big business. The fees can run into the millions of dollars. In order to secure one of these potentially lucrative appointments, the lawyer must seek court approval of his employment and demonstrate that he is "disinterested." To show that he is "disinterested," the lawyer must submit a sworn statement disclosing his "connections" to the debtor and its creditors. Since the statement is submitted under penalty of perjury, a false statement is subject to criminal prosecution.

In the Gellene case, the large New York law firm of Milbank, Tweed was hired to represent Bucyrus-Erie Corporation in its bankruptcy proceeding. The bankruptcy was very contentious because the largest unsecured creditor, Jackson National Life, had accused the company's investment banker, Goldman Sachs, with manipulating the company's financial affairs to its own benefit. Things got worse when a Goldman Sachs partner, Mikael Salovaara, started his own firm, South Street Fund, and that firm did a deal with Bucyrus-Erie which put them ahead of all the other creditors.

All this happened before bankruptcy lawyer John Gellene entered the picture. However, it created an adversarial situation between the company and between different groups of its creditors. The debtor's attorney would be caught in the middle of this conflict and would have to navigate it in order to successfully reorganize the company. John Gellene began representing Bucyrus-Erie a year before its bankruptcy at a time when his law firm was not representing either Salovaara or South Street. However, shortly before the case was filed, Milbank, Tweed began representing South Street in another bankruptcy and also represented Salovaara in a dispute with his partner. Both of these were "connections" with creditors. However, Gellene failed to disclose these relationships in either of two affidavits filed with the court.

Gellene successfully guided Bucyrus-Erie through its reorganization and his firm was paid nearly $2 million in fees for doing so. Unfortunately, his successful plan put the company's old adversary, Jackson National Life, in control of the company. Years later, Jackson found out about the failure to disclose and sued Milbank, Tweed to return its fees and for malpractice. This proved to be very costly for Milbank, Tweed but it was worse for John Gellene. The publicity spawned by the fee litigation prompted the U.S. Attorney to file criminal charges against Gellene. A deal to plead to a misdemeanor fell through and the case went to trial. The prosecution sought to portray the failure to disclose as black and white, the while the defense attempted to put the statement in context. The jury sided with the U.S. Attorney and Gellene was convicted and sentenced to 15 months in prison. Gellene went from being a highly respected bankruptcy attorney to a convicted felon in a relatively short period of time.

Eat What You Kill does a good job of telling the story and does an adequate job of explaining why this lawyer did what he did, but really fails to answer the big question of why John Gellene was prosecuted. The book does its best job at opening a window onto the pressures faced by a big firm lawyer struggling to survive but cutting corners to do so.

Part 1 of the book does a slow but methodical job of setting the stage. In particular, it describes the world of the large New York law firm where security is an illusion. Gone are the days where clients maintained loyalty to a single firm and firms maintained loyalty to their partners. This world was replaced by a much more fluid one where clients award their business to the best suitor and partners compete against each other in a continuous tournament to see who can bring in the most clients, or failing that, who can bill the most hours. In such a world, it is tempting to cut corners if doing so means being able to attract more business and bill more hours. Additionally, it creates an atmosphere where the "service partners," the ones who perform and supervise the work, must maintain the good will of the "rain makers" who bring in the clients.

Parts 2 and 3 of Eat What You Kill tell the guts of the story in a fast-paced, easy to read manner. It is exciting to watch (at least from a bankruptcy lawyer's vantage) as John Gellene tries strategy after strategy to bring the reorganization to a successful conclusion before the company implodes under the weight of the litigation. Then, just as Gellene has achieved success, everything comes crashing down on him with the weight of a Shakespearean tragedy.

Part 4 and the epilogue try to make sense of what happened. This part of the story could have benefited from a thorough job of editing and re-writing. Pieces of the story which were apparent from the original telling are replayed over and over again in over 70 pages of mind-numbing discussion without achieving a coherent explanation. The epilogue strays into proposals for reforming legal ethics while paying scant attention to the story.

It is possible for the reader to put together the "why" of John Gellene's actions, but it requires some patience. In short, Gellene was placed in an atmosphere where he had to succeed to survive. Disclosing the connections to Salovaara and South Street would have risked losing a lucrative piece of work that he had already been working on for a year. It would have also risked incurring the displeasure of his rain maker who controlled the relationships with Bucyrus-Erie, South Street and Salovaara. The disclosures were one piece of paper of thousands filed in the case. There must have been overwhelming pressure to give them scant attention and move on to more substantive issues. If Gellene did weigh the risks in any detail, he probably dismissed them, since disclosure violations frequently resulted in mild consequences. Thus, it is likely that John Gellene felt sucker-punched when he was indicted, tried and convicted.

Unfortunately, the book gives little emphasis to the "why" of his prosecution. White color prosecutions are rare and prosecutions for failure to disclose conflicts in a bankruptcy case are rarer still. In this case, the Asst. U.S. Trustee (an official charged with overseeing bankruptcy proceedings) had previously been the U.S. Attorney. Perhaps he approached the case with a prosecutor's mindset rather than from a bankruptcy point of view and thus was able to lobby for a prosecution. This was a case where a big New York law firm collected millions of dollars in fees in a case filed in Wisconsin. Perhaps jealousy and mistrust of outsiders played a role. Unfortunately, these themes are not discussed in any depth.

This is an interesting book about an interesting topic, but a revised edition could be better.

I just read this book and I absolutely agree with the positive reviews that it has received. It is written in a really accessible style, brings the characters to life and deals with some complex issues in a readable way.

I thought that the contrast it develops between the somewhat relaxed conflict rules that have developed in the world of M + A and Investments and the very different rules that apply in contentious matters (not something that I had thought about before) is really useful. It also brings out the real risks that arise when these two worlds collide. It made me wonder about the extent to which relaxed conflict rules were a contributor to the financial meltdown that we have just seen.

Enjoyable to read and carries some important lessons that are hugely relevant to all lawyers in private practice. Make sure someone in your firm has read it!

Just read a few chapters so far, but Regan offers a superb and very compelling explanation for the change of law firms in the past century...can't wait to finish!

I read this book on recommendation from a Penn Law Prof before I came to law school.

It not only tells a great story, but for those in law or entering law it manages to tell that story while at the same time showing the trials and tribulations related to life in large law firms where the "eat what you kill" model is in place.

It doesn't leave you pitying lawyers or try to send too strong a moral message, it just tells a real life story in a way that illustrates the unique pressures of this world.

"Eat What You Kill" is a moralty tale about legal practice. It reconstructs the self-immolation of a big firm lawyer who went to jail for lying about a conflict of interest in a Chapter 11 case. Along the way, the book tells the story of how greed and cutthroat competition took over law firm practice over the past 30 years.

The analysis is thoughtful and nuanced -- but let's face it, bankruptcy litigation ain't the stuff of high drama. Even worse, the author never won the cooperation of the lying lawyer, leaving a huge hole at the center of the narrative. The page/insight ratio is just too high for the book to get more than three stars.

Elite lawyers ply their trade in a bleak moral landscape. In what may be the greatest waste of human intellect since medieval monasticism, our legal high priests squander their superb educations devising strategies to preserve and augment the fortunes of people who already have too much money for their own good. In the process, the lawyers earn piles of money for themselves, but only by working 12-hour days, like deskbound slaves. Selling one's soul for cash is a grotesque bargain -- but we don't need "Eat What You Kill" to know that!

Bottom line: "Eat What You Kill" isn't for everyone, but it is highly recommended for law students having second thoughts. It is also recommended for practicing lawyers coming to terms with the meaning of their lives.

Great book showing what can go wrong when law firms let top lawyers get away with violating common practices.