The phrase "bad boys" is one that conjures up a multitude
of contradictory connotations. In sports, the Detroit
Pistons wore the moniker proudly as they pummeled their way to consecutive
NBA championships. Those bad boys, however, are long gone and now the same
team is just
In art, Jerry Bruckheimer produced "Bad Boys" in 1995 and
"Bad Boys II" in 2003, starring Will Smith and Martin Lawrence as bad boy Miami
detectives. These likeable actors, however, failed to convey much of a bad
boy image and critics
the movies. Not deterred, a third installment, "Bad Boys III," is
scheduled for 2015, but it too (like "Die Hard 5") is likely to
In life, John Alleman had become a Las Vegas
sensation. Starting in about June 2011, he stood outside the Heart Attack
Grill for nothing more than the love of the place (and some occasional free
food) and colorfully pitched and cajoled people to sample such delicacies as
Flatliner Fries, Butterfat Shakes, and the king-of-them-all, the Quadruple
Bypass Burger (which holds the Guinness World Record for the "most calorific
burger"). Late last year, this bad boy suffered
a massive heart attack at a bus stop and died, thus ending his short-but
glorious-reign as Sin City's leading tempter of fate.
In the law, bad boys often find they pay a hefty and
quite disproportionate price for their bad acts. Consider, for example,
the case of Michael Turner. This bad boy received a $40,000 insurance
settlement check three days before he filed bankruptcy and then cashed the
check three days after he filed bankruptcy, using about one-quarter of the
proceeds to pay down a mortgage while pocketing the rest. His failure to
disclose this asset in his bankruptcy schedules, as mandated by the Code, led a
grand jury three years later to return a six-count indictment against him that
eventually resulted in a bankruptcy fraud conviction and a 27 month jail
sentence. The 11th Circuit recently upheld his sentence as appropriate
under today's harsh federal sentencing guidelines. United States v.
Turner, 2013 U.S. App. LEXIS 2914 (11th Cir., Feb. 12, 2013).
Some bad boys, however, manage to avoid the cudgel of the
law by seizing onto a loophole that averts near certain doom. Consider,
for example, bad boy Bernie Kurlemann, whose bank fraud conviction was reversed
because the statute only criminalizes "false statements." Since he kept
his mouth shut and told only half the truth, the court ruled, he couldn't be
convicted under a statute that does not criminalize "half-truths," "material
omissions," or "concealments." United States v. Kurlemann, 2013 U.S.
App. LEXIS 2955 (6th Cir., Feb. 13, 2013). True, Kurleman was still
convicted on bankruptcy fraud charges, but that paled in comparison to the time
he would have served had the bank fraud conviction been upheld.
Finally, consider so-called "bad boy" bank
guaranties, where one's personal liability to a lender is instantly multiplied
from a fraction of the loan amount to the full indebtedness simply because one
engaged in any one of various enumerated "bad acts" (such as waste, fraud,
misappropriation, bankruptcy, receivership, violation of special purpose entity
covenants, or incurrence of subordinate debt without the lender's
consent). Here in Illinois, bad boy Laurance Freed, developer of the
long-vacant "Block 37" on North State Street in Chicago, committed such a bad
boy act when he had the temerity to contest the bank's appointment of a receiver
and file defenses to the bank's foreclosure action. Though the ensuing
delays were but a mere nuisance for the bank, that didn't stop the Illinois
Appellate Court from affirming that (i) Freed's nominal challenges to the
bank's actions triggered the full $206 million recourse liability (up from $50
million) and (ii) the increase was not wholly disproportionate to the damages
suffered by the bank from having to deal with the nuisance litigation and so
was not an unenforceable penalty. In sum, the Court held, if you're a "bad
boy" under your own contractual definition of one, don't expect a court to bail
you out of your own mess. Bank of America v. Freed, 2012 Ill. App.
LEXIS 1052 (Ill. App. Ct., December 28, 2012).
In conclusion, there's a clear moral to this story:
Except perhaps in sports and art, being a bad boy can be
hazardous to life
(RIP Mr. Alleman), liberty (Turner / Kurlemann), and the pursuit
of happiness (Freed)!
Thanks for reading!
subscribers can access enhanced versions of the opinions cited in this article:
United States v. Turner, 2013 U.S. App.
LEXIS 2914 (11th Cir., Feb. 12, 2013)
United States v. Kurlemann, 2013
U.S. App. LEXIS 2955 (6th Cir., Feb. 13, 2013)
Bank of America v. Freed, 2012 Ill. App.
LEXIS 1052 (Ill. App. Ct., December 28, 2012)
Copyright Steve Jakubowski 2013
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