Posts Tagged ‘bankruptcy’

Todd Kincannon Unfazed by Righthaven’s Bankruptcy Talk

Tuesday, September 13th, 2011

Righthaven antagonist J. Todd Kincannon (Photo: The Kincannon Firm)

I asked Todd Kincannon, the lawyer signing up plaintiffs for a Righthaven class action, what he thought of the company’s claim that it was on the verge of bankruptcy.

“I always knew Righthaven would file bankruptcy if things got rough,” Kincannon told me by e-mail. “They
were set up as a limited liability company just so they could do that. Fortunately, Stephens Media, MediaNews Group, Sherman Frederick, Steve Gibson, and Dickinson Wright all seem to have plenty of money.”

I kind of thought he might think that.

The truth is that Righthaven’s bankruptcy, if and when it comes to that, won’t be the end of the Righthaven story. Instead, it will be the beginning of the second half.

Over its first year and a half, Righthaven was on the offense, swooping down on unsuspecting bloggers and holding them up for a few thousand dollars a piece. Then, in June, the Democratic Underground decision came down, and the tide reversed. Things are now swooping down on Righthaven. Not only does Kincannon have his nascent class-action, but there’s the strong possibility of bar discipline against Righthaven attorneys, and you can even see the potential for criminal charges (federal racketeering charges and conspiracy to obstruct justice, for instance).

The Implosion Accelerates: Righthaven Begs for Stay, Warns of Bankruptcy

Monday, September 12th, 2011

Bankrupt monopoly guy with copyright symbol replacing faceThe copyright-lawsuit factory that has sued scores of bloggers appears to be nearing the financial precipice. Steve Green of the Las Vegas Sun and Vegas Inc. reports that Righthaven is pleading with the U.S. District Court in Nevada to stay an order to pay $34,045 in attorneys fees arising from Righthaven’s failed lawsuit against Kentucky resident Wayne Hoehn over a post on a sports-betting message board. Judge Phillip Pro dismissed that lawsuit in June, holding that Righthaven lacked standing to sue Hoehn, and, additionally, that Hoehn’s reposting of an entire column from the Las Vegas Review-Journal was protected as fair use. As a result, Judge Pro ordered Righthaven pay Hoehn’s attorneys fees. On Friday, Righthaven asked Judge Pro to stay his order while it is appealed to the 9th Circuit. Green writes:

Righthaven … said the gridlock over its lawsuits has hurt its finances – and expressed concern that attorneys for prevailing defendants like Hoehn may seize its assets and put it out of business.

Righthaven, begging for mercy. I don’t even have the words to describe the irony here.

When a company breathes the word “bankruptcy” as part of a plea for delaying the payment of some debt, it generally means the implosion is already well underway. That being the case, we can expect anyone who has a judgment against Righthaven to rush to seize assets as fast as possible. That will force Righthaven to run to bankruptcy court to get the protection of the automatic stay available for bankruptcy filers.

I haven’t seen Righthaven’s emergency request to Judge Pro, but I can’t imagine there’s any good reason to grant it unless Righthaven is able to post a bond – which they might not be able to do if they are nearing bankruptcy. This is something that the bankruptcy courts can sort out, and will probably will have to.

And, by the way, yes, this means Righthaven defendants could end up controlling – through a creditors’ committee – the copyrights that were used as the basis for suing them. It also means that a lot more Righthaven documents could be opened up to public scrutiny.