September 25 , 2006

STRATTON CONGRATULATES BEATMAN ON JOB WELL DONE

No rulebook could prepare Zeisler & Zeisler bankruptcy attorney Matthew K. Beatman for what lay ahead when Hartford Superior Court Judge Vanessa L. Bryant tapped him as the receiver for American Crushing & Recycling (ACR) — the Bloomfield-based company that owned the dump truck behind the deadly 20-car crash on Avon Mountain in July 2005.

From the moment Beatman answered a cell phone call on his way into Rosh Hashanah services last year and learned Bryant requested his services, he said he realized the case would be one of his most unusual and most challenging.

There were terribly wronged victims. There was a business owner allegedly attempting to fraudulently conceal his assets. There were angry creditors, accounting documents in disarray, and serious questions about insurance coverage.

For more than a year, the case has consumed Beatman's time. It has required sleuthing, tenacious bargaining, and a creative approach to a myriad of practical problems. But what pushes the 41-year-old lawyer is the suffering by the victims and their families. "I hoped I could make some good come of it, if possible," he said in a recent interview.

What appeared last fall to be an insolvent business, with no significant assets, netted at auction last spring nearly half a million dollars, in large part due to Beatman's efforts.

"We understood there wasn't a big pot of gold" to be found in ACR's assets, said New Haven plaintiffs' attorney Michael Stratton, who represents the wife of Paul "Chip" Stotler, one of the people killed in the crash. "Matt maximized the pot."

Stratton, of Stratton Faxon, recalled the days after the crash, before Beatman entered the case. "Attorney General [Richard] Blumenthal and I were attempting to try to bring some order to the chaos" that was ACR owner David Wilcox's business. "Having had good experiences with Matt in bankruptcy cases, his name immediately came to mind" when Bryant sought to appoint a receiver to help secure ACR's assets and prevent Wilcox from transferring them in violation of a court order. Beatman "brought order to a totally chaotic scene," Stratton said.

Describing Beatman as "a pit bull," Stratton praised Beatman's approach. "Wilcox was literally trying to secrete his assets, to hide his trucks and destroy his records. It was an extremely tense five or six days after [Beatman] was appointed," Stratton recalled.

Beatman's first order of business was, literally, to secure the assets. Visiting ACR for the first time, Beatman said he was alarmed most by the open front perimeter of the property. Although there was gated driveway, a separate, unlocked driveway adjacent to the property provided easy access.

Beatman at once arranged to have the locks changed and install a security guard 24 hours a day.

His negotiating skills immediately were put to use. Not only did Beatman find a company to install a new fence around the company ASAP and to wait for payment, but he "negotiated a price with one of the fence installers that was almost half of the other estimate," according to court documents.

Through gumshoe work by Blumenthal's office, Beatman tracked down two trucks that Wilcox had apparently hid in New Hampshire. At the same time, he had to gain a sense of what the business's liabilities were. Banks began to clamor for liquidation, and Beatman grew concerned that any assets the company had would be spent on legal fees defending lawsuits.

At Beatman's request, Hartford Superior Court Judge John J. Langenbach stayed all suits and motions for prejudgment remedies, where the ACR's legal fees were not paid for by insurance.

Holding off creditors who wanted immediate liquidation, Beatman headed into last winter thinking about the sales process. Should he sell the company as a going-concern, auction its equipment piecemeal, or continue to operate the business through a subcontractor?

He settled on an auction, and after interviewing several auctioneers, retained Ritchie Bros., the leading industrial equipment auctioneer in the world, Beatman said. He then got Ritchie Bros. to reduce its customary 10 percent fee to 9 percent, and convinced it to pay the costs of advertising, notice, security, and other make-ready fees.

"My mom taught me to always negotiate," Beatman explained.

The auction of ACR's assets was held in March, after Beatman beat back a legal challenge by Wilcox that much of the property was personal. Wilcox is represented by John F. McKenna, of Goodman Rosenthal & McKenna in West Hartford. ACR's attorney is Robinson & Cole's David T. Ryan, from the firm's Hartford office.

Stratton, an experienced litigator, said he was "very impressed by Matt. He's been up against some good lawyers. At every court hearing, it's Matt against three to four major firm lawyers screaming and yelling about how Matt is violating [Wilcox's] due process. In reality, nothing could be further from the truth."

Beatman admitted that the auction's success was, in part, due to his ability to negotiate reductions in fees from vendors, creditors and auctioneers over the past year. He voluntarily reduced his own legal fees, as well, by 10 percent, he said. For the first four months of 2006, Zeisler & Zeisler charged $90,000 on a $100,000 bill, according to a balance sheet submitted to the court last May.

Beatman's latest idea to reduce spending ACR assets on legal fees is to create a victims' claim fund with the court "so that the funds on hand can be disbursed on a pro rata basis as expeditiously and efficiently as possible," he wrote in a motion filed Sept. 19. To Beatman, the idea makes sense, because it would streamline a process that otherwise could take years. A hearing on the motion, which is opposed by ACR, is scheduled for Oct. 30. •