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My Favorite Two Sentences From a Recent Case . . .

posted by Mitu Gulati

Over the past few days, I've been struggling with trying to understand a new NY case involving secured debt. The fact that I had to struggle to understand the transaction made me feel insecure enough (on occasion,  I purport to teach corporate debt), but then when I tried to delve deeper into the case by looking at the underlying contracts (the "Collateral Pledge" Agreement - yuck), I got even more confused and insecure because I found the darn thing utterly incomprehensible.  Indeed, a whole half of that document seemed like it had been drafted for an entirely different type of transaction and the crucial provision that I was looking for didn't even seem to be there. But since I couldn't understand it, I couldn't be sure.  Maybe that provision was buried in some other provision that I couldn't figure out . . .

Then, while wallowing in insecurity, I came across this from a recent bankruptcy case out of the Third Circuit (thank you. Third Circuit blog for making me feel better):

The Third Circuit affirmed a ruling leaving in place a tenant’s favorable lease terms after the landlord declared bankruptcy and was purchased free and clear. Best line: “The Lease is long and neither simple nor direct. Indeed, it is an almost impenetrable web of formulas, defined terms, and cross-references–a ‘bloated morass,’ in the words of the Bankruptcy Court.”

I'm turning now to reading the briefs for the Aurelius v. Puerto Rican Control Board/Commonwealth of Puerto Rico case (oral argument on Monday).  As compared to that Collateral Pledge Agreement, these briefs read like a beautiful novel.  The briefs on both sides are beautifully written, in clear, short and comprehensible sentences.  Maybe litigators should be the ones drafting contracts?

Comments

Last sentence: spot on.

Once a frustrated litigator, I found the rapture of complex transactions.

The best complaints, answers, make-break motions (1) are crafted to tell a compelling story of facts in ordinary English, and (2) come embedded with a GPS keeping the court on my road map from point A to point B to point C.

Contracts ain't much different: A readable story line in ordinary words, backed by a subplot of legal consensus and equipped with a GPS steering (1) contracting parties from point A to point B to point C, as well as (2) the court/arbitrator if anybody veers off point.

For both litigation and transactions, my lay-person husband would suffer to read the documents I drafted -- particularly litigation stuff.

If he found the litigation stories readable, understandable and convincing, then publication was not far off.

If he found the base transaction document, the heart of the deal readable and grasped the essentials of the story, then the manuscript was a good draft and ready to join other chapters.

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