Criminal mental health program in Miami-Dade seen as a model for nation

The front lines of the mental health crisis unfolding in Miami-Dade County — home to the nation’s largest ratio of people living with a serious mental illness in an urban community — are not in the psychiatric hospitals and behavioral counseling centers where patients seek help.

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Private development to bring construction boom to Miami River

By Jeff Lennox

MIAMI (WSVN) – Big changes are around the bend for the Miami River waterfront, as private development in the area is paving the way for a construction boom.

Paul George, a professor and local historian, has been giving tours up and down the Miami River for years, so he is in a unique position to know how the area will change. “It’s a special place for anyone who has been in Miami for a very long time,” he said.

George recently gave local developers an idea of what’s in store. “I see increased commerce on the river, especially as relations grow closer to normality with Cuba,” he said. “I think there is going to be more business back and forth. If and when that embargo is lifted, there’s going to be a flood of vessels relating to Cuban business in the river.”

In recent years, the river, which winds its way through the heart of Downtown Miami, has already seen an increase in retail, residential and business construction. But new plans approved by voters in mid-March call for a $30 million; 58,000-square-foot complex that includes an expansion of the public Riverwalk, an outdoor plaza and several outdoor restaurants.

The city, in turn, would receive a minimum annual rent payment of $195,500 from the developer. “The Miami River is becoming more populated then it has ever been,” said David Restainer, managing director at Douglas Elliman Commercial Real Estate. “When you look at some of the great cities around the world, most of them develop around rivers.”

With residential high-rises popping up in the area, real estate developers are hoping this trend flourishes. “What we’re looking at is creating a walkable waterfront,” said Alex Rhodes, a partner at Grant Thornton LLP, “a true neighborhood where people can live work and play, all in one place.”

The future site for the new restaurants is the north bank of the river, the land on the west side of Interstate 95. Part of the land being re-imagined has been leased by Garcia’s Seafood Grille & Fish Market for decades.

But that will all soon change, and the upcoming Miami Riverfront has earned George’s seal of approval. “I see nothing but positive stuff for the river in the next 15 years or so,” he said.

This project is still in the early framing stages. Developers believe they’ll break ground on the riverfront sometime in 2017 or 2018.

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Who is left holding the bag for latent damage claims?

By David A. Samole

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Lawyer to be honored by American Jewish Committee

Harley S. Tropin, president of the law firm KozyakTropin& Throckmorton in Coral Gables, will be honored with AJC’s 2016 Judge Learned Hand Award.

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Lawyer to be honored by American Jewish Committee

Harley S. TropinLawyer Harley S. Tropin of Pinecrest will receive American Committee’s 2016 Judge Learned Hand Award.

 

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In Health Care, Cost Transparency Is Unclear

By Sammy Mack

Health-care prices are complex and in many ways secret—which can affect how much you end up paying for your health care.

But not everyone agrees on what transparency in health-care pricing should look like.

You can listen to a story about what we mean when we talk about transparency here:

As part of our PriceCheck project, we’ve been spending a lot of time talking to people about what they picture when it comes to transparency. Below, you’ll find some of their thoughts.

And if you want to contribute your billing information to our crowd-sourced health-care price project, check out the PriceCheck tool at the bottom of the page.

Bruce Rueben, president of the Florida Hospital Association—which is behindmissiontocare.org—on what transparency could look like:

Boy, that’s a big question. It’s almost too big to really give a specific answer on it, so let’s talk about just a bit—acute-care hospital services to begin with.

I think when people are in a health crisis what they want is to know that they are going to be treated in a place that is safe and that provides effective care that is as patient-friendly or patient-centered as possible. And in a true crisis, the last thing people are concerned about are costs—and that’s probably appropriate.

But when one does have a chance to research—say if it’s not a life-threatening situation or it’s an elective situation—then what you want is information that can help you begin to narrow down where the choices are. And what are the relative value of those services.

Those are the kind of things that you want to know about to begin to ask the right questions. And I think that’s really the best we can do at this point. And that alone would be very useful if it’s in one place where people can get ready access to it.

Steven Weissman, lawyer and former interim chief of Palm Springs General Hospital in Hialeah—he also started a petition for health-care pricing reform on Change.org—on his idea for health-care price reform:

True transparency would be the simplest thing in the world, and to me it’s the most obvious thing in the world: All providers have to state their prices and charge everyone that price. Same as gas stations, same as delicatessens, same as a department store.

If you went into a department store and three people in front of you were being charged $19 for a shirt and when you got to the cash register they charged you $199 for the exact same thing, everybody would recognize that’s absurd. And all kinds of consumer protection organizations would help you.

But that happens every single day in hospitals.

Doug Wolfe, health-care lawyer with Kozyak Tropin Throckmorton, on the limits of transparency in health-care prices:

Even the most basic way of presenting information to consumers doesn’t really tell them what they need because they’re not going to know the services that they’re going to need when they go into a doctor’s office, or a hospital or whatnot. So I think the starting point is going to be educating consumers on how to ask the right questions. Transparency begins with educating the consumer.

I think that employers are starting to pick up on that. Premiums and the cost of insurance are going up and up and up every year. We’re starting to see that the employers are doing a lot more to educate consumers and to manage the claims, and make sure to keep people out of emergency rooms. If you need imaging stuff, go to a lower-cost facility. And employers are starting to do that, but it tends to be the bigger, more sophisticated employers.

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Shatter the Stigma Fundraiser

More than 150 community leaders attended Shatter the Stigma, an inaugural mental health awareness fundraiser addressing the stigma surrounding mental illness and the lack of resources available for treatment in South Florida. ​Money raised at t​he event​, which​ took place at de la Cruz Collection in Miami’s Design District, will support outreach and patient services at the University of Miami Department of Psychiatry and Behavioral Sciences​. The event was hosted by Rosa and Carlos de la Cruz and underwritten by Sherry and Harley Tropin, president of Kozyak Tropin & Throckmorton and honorary chair of the event. The speakers at the event, including Dr. Charles Nemeroff, Chair of the University of Miami Department of Psychiatry and Behavioral Sciences, Dr. Pascal J. Goldschmidt, Dean of the University of Miami Miller School of Medicine, and Harley Tropin, explained the need to remove the stigma of mental illness to encourage people to seek help, and addressed the pressing need for funding for research.

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American Jewish Committee’s Gala

Harley S. Tropin, president of Kozyak Tropin & Throckmorton, received American Jewish Committee’s 2016 Judge Learned Hand Award at a gala dinner at Jungle Island. Hundreds of legal, business and community leaders attended the event and presentation of the award, which was established by AJC in 1964 to recognize leaders in the legal profession for their excellence and contributions to the practice of law.

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Historic U.S. cruise docks in Havana

By Annie Rose Ramos and Catherine E. Shoichet

Ana Garcia was crying and could hardly walk as she left the cruise ship that took her from Miami to Havana.

It had been more than 48 years since she stepped foot in the country where she was born.

“I’m just thinking of that day when we left (Cuba) and shaking like a leaf,” she said.

Garcia is one of about 700 passengers on the first cruise in decades to travel from the United States to Cuba. The Adonia, a ship on Carnival Corp.’s Fathom cruise line, docked Monday in Havana.

The ship’s arrival marks the first stop on a historic, seven-day voyage that signals closer ties between the United States and its communist-run neighbor.

As the ship arrived, crowds onboard started chanting, “Cuba! Cuba! Cuba!”

For Garcia, the city manager of North Miami Beach, Florida, pulling into the port was an emotional experience.

“I’m blessed to be here today,” she said, “and hoping for a better tomorrow for Cuba and my Cuban brothers and sisters.”

A warm welcome

 Large crowds waved to the boat from the shore as it approached Havana.

Bands and dancers greeted passengers at the port.

Cuban rum drinks awaited them as they made their way into Havana.

The seven-day cruise is scheduled to stop in three cities: Havana, Cienfuegos and Santiago de Cuba.

Ship left protesters in its wake

 The boat set sail from Miami on Sunday as salsa music played and protesters picketed nearby.

Standing beside Cuban and American flags, the cruise manager touted the journey as “the beginning of a new era.”

Not everyone was happy about the new route.

A small group of protesters gathered outside the port Sunday. And as the cruise ship was getting ready to leave Miami, police descended upon a nearby boat labeled Democracia, where demonstrators held a blue sign that said, “Castro why do you ask Cubans for a Visa to visit their own country?”

But passengers on the ship said they wanted to put politics aside.

As the boat sailed, a salsa band serenaded passengers on deck.

Jesse Mercado, a business owner from Los Angeles, was one of the first to hit the dance floor with his girlfriend, putting aside the small American and Cuban flags they had been waving at people on the shore as the ship passed by Miami’s South Beach.

He said he was looking forward to buying some of the island’s famed cigars, but he most likely wouldn’t try to bring them back to the United States, where an embargo on Cuban-made products still exists.

“I’ll probably smoke them all there (in Cuba),” he laughed.

Gary Carlson said controversy surrounding the cruise doesn’t add up.

“I’m not sure I really understand, because it’s time to put those things behind us,” he said. “Really the big issue is government to government, not people to people, and that’s what we’re excited about participating in.”

Cruise almost didn’t happen

 The voyage, the first U.S. cruise bound for Cuba in nearly 40 years, almost didn’t happen as scheduled.

Last month, controversy erupted over a Cuban law that prevented Cuban-born passengers from coming to the island on boats. The law stopped Fathom owner Carnival Corp. from selling tickets to Cuban passengers.

That move sparked a lawsuit from would-be Cuban passengers and an announcement by the cruise line that it wouldn’t sail unless Cuba changed its policies. Soon afterward, the Cuban government said it would scrap its longstanding ban on letting people born in Cuba come to the island by cruise ship.

But the two plaintiffs in the lawsuit aren’t on this week’s voyage, according to lawyer Javier Lopez, “not because they don’t want to be, but because the Cuban government requires people that were born in Cuba to jump through a whole bunch of other hurdles.”

Cruise officials said six of the passengers on the cruise are Cuban.

Beatriz Melendez is one of them.

The 52-year-old was 4 when she left Cuba with her sister and parents. Now she and her sister are taking the cruise to Cuba together.

“Is that where you had your birthday party when you were little?” Melendez asked her sister, pointing excitedly as the boat pulled into the Havana port Monday.

On Sunday, when the cruise ship left Miami, the sisters spotted a rainbow spanning the bright blue sky — a sign that the spirit of their parents was with them, Melendez said, as they began their journey back home.

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Who is left holding the bag for latent damage claims?

By David A. Samole

Increasingly, true reorganizations under Chapter 11 are the exception, not the rule, as corporate debtors utilize bankruptcy sales to maximize asset value and pay creditors. This trend blurs the line between reorganizations and liquidations, as many Chapter 11 filings repurpose the disposition of assets via goingconcern sales to purchasers without associated liabilities and interests, which attach to sale proceeds payable to administrative expenses, lienholders, unsecured creditors and equity.

The Bankruptcy Economy

Asset value is maximized by “free and clear” sale provisions set forth in Section 363(f) of the Bankruptcy Code — and the finality of such sales. These concepts are paramount to bankruptcy practitioners and the system alike, and drive a certain “bankruptcy economy” for ALL cases and sales, where debtors, creditors and purchasers rely on these concepts to market and close transactions at their highest value with the cleanest title available at law.

Bankruptcy transactions are governed by bankruptcy court sale orders, and many times, such sale orders are in furtherance of a confirmed Chapter 11 plan that can utilize certain transfer tax exemptions provided only in a Chapter 11 confirmation order, which again maximizes the net proceeds for a bankruptcy estate. And Chapter 11 plans ensure equal treatment of similarly situated creditors. As such, bankruptcy sale orders and plan confirmation work together for all constituents as part of this bankruptcy economy as:

  • The purchaser acquires the desired assets, clean title and seemingly unfettered insulation from prior liabilities associated with the assets and the selling company in an expedited manner governed by an open, judicial sale process;
  • The debtor/seller fulfills its fiduciary duty to creditors by maximizing the value of its assets and receives a discharge with respect to all claims and interests it includes in the bankruptcy, with those claims attaching to the proceeds and other estate property and funds; and
  • The creditors obtain the benefit of the assets being fully marketed and monetized at their highest remaining value promoting an improved overall distribution and equal treatment among similarly situated creditor groups.

Approved competitive bidding bankruptcy sales and confirmed plans are supposed to be a utilitarian-like situation for constituents involved in, or affected by, the bankruptcy proceedings. However, there is an untold and many times unaccounted group of “liabilities” that do not get (adequately) addressed as part of most bankruptcy proceedings: latent damage obligations.

Dormant Defects and Latent Damages

Latent damage claims are held by persons or companies that are affected by the repurposed asset with prepetition dormant defects, that only suffer their injury (or more precisely, only suffer their damages or connect their damages to the repurposed asset) post-confirmation. Bankruptcy cases have been able to address latent tort claims with Section 524(g) channeling injunctions and trusts in the asbestos case context, or otherwise establish future claims trusts in cases with massive “known” defects with un-manifested or unaccounted injuries and damages.

The majority of bankruptcy cases, however, do not involve nor merit Section 524(g) channeling injunctions or future claims trusts. As such, when latent damage claimants pursue litigation against the asset purchaser — who is reaping the profits and holding itself outas the owner of such asset — the purchaser and/or the debtor (hello, indemnification sale provisions) usually seek relief in the original bankruptcy court to enforce the discharge and/or other injunctions provided by a final, non-appealable confirmation order and/or sale order that otherwise was duly served on all known creditors by CM/ECF or regular mail processes, and many times served on all unknown creditors by court-approved publication notices in newspapers, industryspecific periodicals and other online mechanisms.

Undercard Issues of a 101(5) Claim

An undercard of threshold issues present themselves many times in these situations, but are affected by different facts or varying circuit-level holdings, such as whether the latent damage liability is even a claim under Section 101(5) of the Bankruptcy Code or when such claim is deemed to arise in a given circuit, which of course is a prerequisite for a claim to be deemed (and perhaps was) discharged by the confirmation order and/or sale order.

Similarly, different cases have varying facts about pre-existing knowledge of manufacturing defects by the debtor and/or asset purchaser (see recent ongoing postconfirmation bankruptcy litigation in GM pending in the Southern District of New York, In re Motors Liquidation Company, f/k/a General Motors Corp., Case No. 09-50026, (and now the U.S. Court of Appeals for the Second Circuit) or perhaps about the defective form and manner of the notice of the bankruptcy case, claims bar date, and confirmation order affecting notions of due process. See an interesting example of this from a case in which this author was involved a few years ago regarding cemetery improprieties, called Alderwoods Group, Inc. v. Garcia, et al., 420 B.R. 609 (Bankr.S.D.Fla. 2009)).

Again, these “other” issues can be dispositive by themselves in post confirmation litigation, for instance taking the example of successor liability claims and their dischargeability, or whether an asset purchaser can use a sale order or confirmation order as a shield to protect against its own misconduct with respect to the purchased assets.

On the one hand, there is a growing trend of bankruptcy courts determining that the “free and clear” language of Bankruptcy Code Section 363(f) may include successor liability claims among “interests in such property” immunizing the purchaser, and merely attaching to estate sale proceeds. However, on the other hand, courts are showing a similarly strong trend that a latent or future claim victim may pursue an asset purchaser for damages strictly rooted to the asset purchaser’s post confirmation (mis)conduct in handling a defective product in the marketplace, where the claim is NOT about successor liability for the debtor’s pre-confirmation conduct, but rather is a standalone claim against the asset purchaser only looking at its conduct after confirmation.

The current debate in the GM case now up on appeal is a very good example of just how hard itis to decipher a stand-alone claim when the post-confirmation misconduct by the asset purchaser is knowingly continuing a defective product line in the marketplace that was manufactured prepetition by the debtor and/or failing to timely recall that product or otherwise not adequately advising consumers about the risks involved with purchasing and continuing to use that product.

These undercard issues can fill up an entire article by themselves, including the effect on seeking punitive damages in the post-confirmation context (which is what really moves the needle in boardrooms), and will be left for another day, but usually these issues have a meaningful effect on such post-confirmation litigation.

Sale Immunity Versus Due Process

This is where two of the most fundamental, heavyweight concepts in bankruptcy law come to a head: the “free and clear” provisions of bankruptcy sales versus due process. In reconciling the bankruptcy sale objectives with the bedrock notions of due process, one should consider the famous bridges hypothetical from the Second Circuit:

Consider, for example, a company that builds bridges aroundthe world. It can estimate that of 10,000 bridges it builds, one will fail, causing 10 deaths. Having built 10,000 bridges, it becomes insolvent and files a petition in bankruptcy. Is there a “claim” on behalf of the 10 people who will be killed when they drive across the one bridge that will fail someday in the future? The potential victims are not only unidentified, but there is no way to identify them. Sheer fortuity will determine who will be on that one bridge when it crashes. What notice is to be given to these potential “claimants”?

In re Chateaugay Corp., 944 F.2d 997, 1003 (2d Cir.1991).

And while some people will think immediately about a future claims representative in the bridges-stype case with a large-scale known forthcoming damage claim without identified claimants, there are many middle-market cases or smaller, where having a future claims representative is not plausible or fiscally responsible to the known creditors in the case, or where the product itself is not inherently known to be the subject of forthcoming damage claims. Ultimately, the key question is what is considered due processfor a latent damage claimant who did not know of the defect at the time of the bankruptcy or was not hurt by the defect manifestation until after the bankruptcy?

Let us add to the bridges-type hypothetical a bankruptcy-related sale process as the best way to maximize the value of the debtor’s assets for creditors. With due process concerns present and inconsistent treatment of such liabilities in the post-confirmation litigation case law, then — even with tightly drafted 363(f) and 1141(c) provisions immunizing the purchaser and debtor from further liability — there remains the potential for purchasers to pay less for assets in bankruptcy because of uncertainty over liability. And existing creditors not only are affected by this potential lower purchase price, but unsecured creditors receiving ratable distributions in the Plan may receive disparate treatment compared with those unsecured latentdamage claimants seeking a dollarfor-dollar recovery against the asset purchaser. Disrupting asset value maximization and the equal creditor treatment continuum can become a recipe for disaster for all constituents in the bankruptcy economy, and has proven to be of great concern in bankruptcy jurisprudence.

However, as the district court in the Southern District of New York advised in a bankruptcy appellate capacity in In Re Grumman Olson Industries, Inc., 467 B.R. 694 (S.D.N.Y. (2012)), despite the strong policy and case law favoring enforcement of bankruptcy court sale/confirmation orders limiting the rights of injured parties, where parties either had no notice of the bankruptcy proceedings or, more importantly, no reason at the time to present an interest in the bankruptcy proceedings (even if they were generally aware of the bankruptcy proceedings) or to take any action in response to the threatened deprivation of their rights, enforcing sale/ confirmation orders in such instancewould violate due process and bankruptcy notice concerns. Id. at 705- 709 (internal citations omitted).

Ultimately, the Grumman Olson court surmised that “[c]ourts have rejected the premise that maximizing the value of the estate outweighs the due process rights of potential claimants.” Id. at 711.

Where Does This Leave the Bankruptcy Economy?

So, where does this leave the bankruptcy economy and the underbelly of future latent damage claimants? Plenty of cases thread the needle to foreclose certain successor liability claims, especially in mega-cases like GM, and there is still the host of undercard issues discussed earlier that many times answer the smaller questions disposing of the matter before reaching the ultimate larger discussion and conclusion reached in Grumman Olson. As such, there remains a discernible variance as to the consequences of latent damage claims in bankruptcy cases relative to enforcing injunctions in sale/confirmation orders.

In many instances, it is latent damage claimants who are left with restricted rights, if any, outside of bankruptcy, and are affected negatively by a process that did not involve them at all. In other cases, the specter of potential latent damage claims will affect the purchase price attained by the bankruptcy asset sale to the detriment of creditors and perhaps debtors. Then, of course, there are those cases where the asset purchaser will face lawsuits on their merits for successor liability-type actions or for standalone post-confirmation misconduct relative to the purchased defective assets despite premising its court approved purchase of such assets on immunizing themselves from liability with respect to the assets.

Accounting for Failure

Asset purchasers should be aware of the limits of “free and clear” language and discharge relief provided in bankruptcy orders no matter how tightly drafted or the breadth of indemnification provisions in transaction documents.

In situations with known defects surrounding the assets, asset purchasers — in addition to seeking broad Section 363(f) and indemnification language in bankruptcy orders and sale documents — may want to consider pushing for a future claims representative or a holdback reserve for any latent damage claims with such reserve being either on the estate or purchaser side. And while a competitive bid scenario may engender different terms and provisions on these points, inclusion of such items may affect notions of the “highest and best” bid. There is room here both for creativity and improving the treatment of latent damage claims, while maximizing the return to creditors.

Ultimately, despite Section 363(f) and 1141(c) relief, asset purchasers need to account for this additional risk component in their purchase price. In a normative world, case law or legislation would provide uniform treatment of latent damage claims in the post-confirmation/ post-sale setting.

One idea is for the United States Supreme Court to resolve the varying circuit standards as to when a Section 101(5) Claim arises for bankruptcy discharge purposes, but the differing state law standards for the accrual of latent damage claims may prove too difficult to overcome. Other cases focus on successor liability in the bankruptcy sale context but, as shown in GM, legal minds still cannot agree whether a given purchaser’s conduct with respect to a latent defective product falls within successor liability or a standalone, independent claim.

Finally, while constitutional due process relative to the treatment of latent damage claims in a bankruptcy sale order and confirmation order is guided by general due process pronouncements in Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) and more specific discussions in cases like Grumman Olson and those referenced there finding that due process trumps 363(f), other casesretreat from that basic principle and peel back due process with notions of proving prejudice, overcoming mootness, and other similar issues.

More settled law and legislation on the treatment of latent damage claims in the post-confirmation/ post-sale context would engender a more predictive analysis and level playing field for asset purchasers and hopefully a uniform treatment of latent damage claims in sale orders and confirmation orders. However, the current uncertainty involved as to the treatment of latent damage claims in bankruptcy cases (which can be fact-specific) may actually work in favor of some asset purchasers who are more risk-tolerant and better understand the bankruptcy terrain than competitors in their marketplace, which yet again contributes favorably to the existing bankruptcy economy sustaining the lifeblood of debtors and creditor recovery alike.

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