1 00:00:03,480 --> 00:00:07,360 Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every 2 00:00:07,440 --> 00:00:10,239 Speaker 1: day we bring you insight and analysis into the most 3 00:00:10,280 --> 00:00:13,200 Speaker 1: important legal news of the day. You can find more 4 00:00:13,280 --> 00:00:17,840 Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud 5 00:00:18,120 --> 00:00:22,560 Speaker 1: and on Bloomberg dot com Slash Podcasts. It's Chief Justice 6 00:00:22,640 --> 00:00:25,759 Speaker 1: John roberts thirteen year end report on the state of 7 00:00:25,800 --> 00:00:28,680 Speaker 1: Federal Judiciary, and it may be the report that gets 8 00:00:28,720 --> 00:00:31,520 Speaker 1: more attention than any other because it raises issues that 9 00:00:31,560 --> 00:00:34,000 Speaker 1: have been sweeping the country with the me too movement. 10 00:00:34,479 --> 00:00:37,919 Speaker 1: The report is largely devoted to the federal judiciary's response 11 00:00:37,960 --> 00:00:41,600 Speaker 1: to this year's natural disasters, but the Chief also highlights 12 00:00:41,680 --> 00:00:44,120 Speaker 1: the depth of the problem of sexual harassment in the 13 00:00:44,159 --> 00:00:47,640 Speaker 1: workplace across the country, shinning a spotline on a special 14 00:00:47,720 --> 00:00:51,159 Speaker 1: problem for the judiciary where law clerks work closely and 15 00:00:51,240 --> 00:00:54,960 Speaker 1: in confidence with powerful judges Joining me as Deborah Cat's 16 00:00:55,040 --> 00:00:59,360 Speaker 1: founding partner of Cats, Marshall and Banks, Deborah Roberts said 17 00:00:59,400 --> 00:01:02,840 Speaker 1: events in past few weeks have made clear that the 18 00:01:03,040 --> 00:01:06,400 Speaker 1: judicial branch is not immune from the problem of sexual harassment. 19 00:01:06,680 --> 00:01:10,640 Speaker 1: He didn't mentioned prominent Judge Alex Kazinski of the Ninth 20 00:01:10,720 --> 00:01:14,240 Speaker 1: circuit by name, but he was undoubtedly referring to him. 21 00:01:14,800 --> 00:01:18,640 Speaker 1: Tell us what happened with Judge Kazinski, sure well. On 22 00:01:19,000 --> 00:01:23,640 Speaker 1: December eight the Washington Post ran UH bombshell of a 23 00:01:23,760 --> 00:01:27,319 Speaker 1: report reporting on the fact that a number of former 24 00:01:28,160 --> 00:01:32,240 Speaker 1: clerks of Judge Kazinski had accused him of sexual misconduct 25 00:01:32,319 --> 00:01:34,520 Speaker 1: and there was a range of behavior that was reported 26 00:01:34,560 --> 00:01:38,080 Speaker 1: by these former judges that ran the gamut from subjecting 27 00:01:38,160 --> 00:01:45,000 Speaker 1: them to inappropriate, bizarre, sexualized comments, to pornography UH and 28 00:01:45,360 --> 00:01:49,600 Speaker 1: essentially creating an environment where they did not feel able 29 00:01:49,720 --> 00:01:53,200 Speaker 1: to complain because there was no mechanism to complain, but 30 00:01:53,280 --> 00:01:58,120 Speaker 1: that they felt completely UH demeaned by the experience, and 31 00:01:58,240 --> 00:02:01,480 Speaker 1: the judge responded in a way that was extremely dismissive 32 00:02:01,520 --> 00:02:03,520 Speaker 1: and said, essentially, if this is the worst I've done 33 00:02:03,520 --> 00:02:06,080 Speaker 1: in thirty five years, I can live with that. That 34 00:02:06,280 --> 00:02:10,239 Speaker 1: led to the Washington Post on December fifteenth reporting that 35 00:02:10,440 --> 00:02:13,920 Speaker 1: nine more women had come forward and these women had 36 00:02:14,040 --> 00:02:20,160 Speaker 1: also described bizarre, inappropriate comments, but also said that the 37 00:02:20,280 --> 00:02:23,480 Speaker 1: judge had subjected at least four of them to touching 38 00:02:23,720 --> 00:02:28,600 Speaker 1: or kissing, clear sexual harassment, and at that point, UH 39 00:02:28,840 --> 00:02:32,079 Speaker 1: it was clear that a floodgate had been opened and 40 00:02:32,280 --> 00:02:35,520 Speaker 1: the judiciary had to respond. Ultimately, the judge was forced 41 00:02:35,600 --> 00:02:39,760 Speaker 1: to submit his resignation before an investigation was undertaken, so 42 00:02:39,880 --> 00:02:43,760 Speaker 1: he announced his retirement on December eighteenth. Let's discuss the 43 00:02:43,840 --> 00:02:46,960 Speaker 1: complexity of the problem with law clerks because an appeals 44 00:02:47,000 --> 00:02:50,160 Speaker 1: court judge will usually have four clerks and there is 45 00:02:50,200 --> 00:02:54,240 Speaker 1: a strict code of confidentiality they work under. There's also 46 00:02:54,320 --> 00:02:56,840 Speaker 1: the fact that the judge is very influential in their 47 00:02:56,919 --> 00:03:00,560 Speaker 1: future career as many times one are the special pressures 48 00:03:00,600 --> 00:03:05,200 Speaker 1: and conflicts a clerk faces who is harassed, Well, you've 49 00:03:05,280 --> 00:03:09,480 Speaker 1: you've named for a few Getting a federal judicial clerkship 50 00:03:09,680 --> 00:03:13,200 Speaker 1: is a real plump for any uh person graduating from 51 00:03:13,440 --> 00:03:16,480 Speaker 1: law school, and it is a significant stepping stone for 52 00:03:16,560 --> 00:03:21,160 Speaker 1: advancement in the legal profession. People are very reliant on 53 00:03:21,320 --> 00:03:25,079 Speaker 1: judges to get recommendations to either advanced to higher level 54 00:03:25,160 --> 00:03:28,120 Speaker 1: clerkships in Kazynski's case, to the U. S. Supreme Court, 55 00:03:28,200 --> 00:03:32,399 Speaker 1: which is the very top of the profession, or two 56 00:03:32,720 --> 00:03:37,200 Speaker 1: other positions at firms and elsewhere, um. And it really 57 00:03:37,400 --> 00:03:40,760 Speaker 1: is the first significant lawyering lawyering job that someone has 58 00:03:40,840 --> 00:03:43,800 Speaker 1: out of law school, so the clerk is completely reliant 59 00:03:43,960 --> 00:03:47,760 Speaker 1: on the judge for connections and recommendations, and few people 60 00:03:47,840 --> 00:03:51,040 Speaker 1: want to burn that bridge. The other problem is that, 61 00:03:51,480 --> 00:03:55,720 Speaker 1: as you've described, seederal judges have four clerks, and you 62 00:03:55,840 --> 00:04:00,960 Speaker 1: are very isolated in the judges chambers. You don't discuss 63 00:04:01,040 --> 00:04:04,760 Speaker 1: your work with other clerks or with other judges. UM. 64 00:04:05,080 --> 00:04:08,360 Speaker 1: So there really isn't a mechanism to go tell your coworkers, 65 00:04:08,440 --> 00:04:11,440 Speaker 1: this is what's happening in my chambers. And what the 66 00:04:11,560 --> 00:04:14,840 Speaker 1: clerks have done is they sent a letter that I 67 00:04:14,880 --> 00:04:17,440 Speaker 1: think at this point has well over seven hundred signatures 68 00:04:18,279 --> 00:04:22,799 Speaker 1: describing needed reforms within the court system to make clear 69 00:04:22,920 --> 00:04:28,480 Speaker 1: that the UH condition of confidentiality does not apply to 70 00:04:28,760 --> 00:04:33,920 Speaker 1: keeping judges UH. I'm sorry to keeping clerks muzzled when 71 00:04:33,960 --> 00:04:36,920 Speaker 1: they're being subjected to sexual harassment. So that was a 72 00:04:37,040 --> 00:04:41,400 Speaker 1: very significant first step UH that the judiciary did, which 73 00:04:41,480 --> 00:04:46,640 Speaker 1: is it amended the law Clerk Handbook to provide UH 74 00:04:47,640 --> 00:04:52,080 Speaker 1: clarity that harassment is not one of those conditions that 75 00:04:52,400 --> 00:04:56,400 Speaker 1: is to be kept confidential. Roberts said he's already asked 76 00:04:56,480 --> 00:05:00,080 Speaker 1: the Director of the Administrative Office of US Courts to 77 00:05:00,120 --> 00:05:03,400 Speaker 1: assemble a working group to consider whether changes are needed 78 00:05:03,600 --> 00:05:08,960 Speaker 1: in the Judiciary's Code of Conduct, etcetera. Is that enough 79 00:05:09,279 --> 00:05:13,560 Speaker 1: is will that do it? Well? That's an important first 80 00:05:13,600 --> 00:05:17,400 Speaker 1: step because and that was one of the reforms that 81 00:05:17,600 --> 00:05:21,360 Speaker 1: the clerks who signed onto that letter ask for. UH. 82 00:05:21,600 --> 00:05:25,880 Speaker 1: The code provides ethical canons for all judicial employees, including judges, 83 00:05:26,080 --> 00:05:30,880 Speaker 1: and it's very clear that UH there is a paucity 84 00:05:31,600 --> 00:05:35,200 Speaker 1: of direction in this code that makes clear that judicial 85 00:05:35,440 --> 00:05:39,000 Speaker 1: employees UH can report these things and sets out a 86 00:05:39,080 --> 00:05:43,000 Speaker 1: mechanism to handle harassment should it be encountered in the workplace, 87 00:05:43,960 --> 00:05:48,320 Speaker 1: Unlike UH members in the private sector even or even 88 00:05:48,440 --> 00:05:51,960 Speaker 1: in federal executive agencies, there's no recourse if you're sexually 89 00:05:52,000 --> 00:05:55,520 Speaker 1: harassed and you're clerking for a federal judge. UH, there 90 00:05:55,680 --> 00:05:59,920 Speaker 1: isn't Title seven does not cover you in the workplace. UH, 91 00:06:00,120 --> 00:06:03,000 Speaker 1: and there aren't clear reporting lines like going to the 92 00:06:03,080 --> 00:06:06,760 Speaker 1: E E O C. So revising the Code of Conduct 93 00:06:06,960 --> 00:06:11,080 Speaker 1: for judicial employees is really crucial. Only about forty five 94 00:06:11,160 --> 00:06:13,560 Speaker 1: seconds here, I just wanted to get your opinion, Debora, 95 00:06:13,600 --> 00:06:16,600 Speaker 1: about there's been a lot of reporting about things that 96 00:06:16,760 --> 00:06:21,200 Speaker 1: happened UH sexual inappropriate activity from let's say twenty years ago, 97 00:06:21,640 --> 00:06:24,320 Speaker 1: where the statute of limitations has run and there was 98 00:06:24,360 --> 00:06:28,600 Speaker 1: an October sixteenth article about account of a woman who 99 00:06:28,640 --> 00:06:35,440 Speaker 1: said Justice Clarence Thomas had touched her inappropriately in what 100 00:06:35,560 --> 00:06:40,800 Speaker 1: about this going back so far? Well, people are coming 101 00:06:40,920 --> 00:06:46,400 Speaker 1: forward with these allegations because they are of important public concern. 102 00:06:46,520 --> 00:06:49,279 Speaker 1: This is a moment where women are finally being believed 103 00:06:49,360 --> 00:06:52,440 Speaker 1: about these allegations. And they're not coming forward seeking money, 104 00:06:52,920 --> 00:06:55,720 Speaker 1: They're not asserting legal claims. They're essentially saying that people 105 00:06:55,800 --> 00:06:58,680 Speaker 1: who hold the public trust need to be held accountable. 106 00:06:59,080 --> 00:07:02,120 Speaker 1: And that's what happened Kazynski's case. He's paid for this 107 00:07:02,320 --> 00:07:04,920 Speaker 1: with you know, the ultimate got I've got to stop 108 00:07:04,960 --> 00:07:07,440 Speaker 1: you there. We have so much to talk about this, 109 00:07:07,600 --> 00:07:18,960 Speaker 1: but thank you. New York financier Lynn Tilton is starting 110 00:07:19,000 --> 00:07:20,840 Speaker 1: the new year on a high note with a record 111 00:07:20,880 --> 00:07:24,680 Speaker 1: of two out of three court wins. In last Friday, 112 00:07:24,720 --> 00:07:27,440 Speaker 1: a federal judge throughout the charges against Tilton in a 113 00:07:27,560 --> 00:07:31,320 Speaker 1: one billion dollars civil racketeering suit, just three months after 114 00:07:31,360 --> 00:07:34,480 Speaker 1: the Securities and Exchange Commission cleared her of front charges 115 00:07:34,720 --> 00:07:37,640 Speaker 1: of building investors out of more than two hundred million dollars. 116 00:07:38,120 --> 00:07:41,760 Speaker 1: Following the sec ruling, Tilton told Bloomberg TV that she 117 00:07:41,840 --> 00:07:46,200 Speaker 1: had been completely vindicated. The documents spoke for themselves. They 118 00:07:46,280 --> 00:07:49,880 Speaker 1: gave me complete discretion, as the judge said, they gave 119 00:07:49,920 --> 00:07:52,680 Speaker 1: me control over the funds, and as she said, there 120 00:07:52,720 --> 00:07:56,000 Speaker 1: were no emissions. Everything was reported, Everything was there for 121 00:07:56,200 --> 00:07:59,800 Speaker 1: people to see. However, Tilton did not fare as well 122 00:08:00,000 --> 00:08:03,040 Speaker 1: in a Delaware trial. She's appealing to judge's ruling that 123 00:08:03,160 --> 00:08:06,640 Speaker 1: she was properly ousted as a director from some portfolio 124 00:08:06,760 --> 00:08:10,320 Speaker 1: company she claimed to control. My guest is Robert Hockett, 125 00:08:10,360 --> 00:08:14,560 Speaker 1: professor at Cornell University Law School. Bob tell us about 126 00:08:14,640 --> 00:08:19,200 Speaker 1: the civil racketeering lawsuit against Tilton and her Patriarch Partners 127 00:08:19,280 --> 00:08:22,960 Speaker 1: investment firm. Sure. Yeah, so they're basically quite a few 128 00:08:23,000 --> 00:08:24,520 Speaker 1: moving parts here, But I think we can kind of 129 00:08:24,560 --> 00:08:27,280 Speaker 1: spoil it down to its essence by noting what the 130 00:08:27,720 --> 00:08:31,840 Speaker 1: sec suit first amounted to and then understanding the kind 131 00:08:31,920 --> 00:08:33,719 Speaker 1: of the private suits sort of in relation to that. 132 00:08:34,200 --> 00:08:35,800 Speaker 1: So essentially, what you have here is a case of 133 00:08:35,920 --> 00:08:39,920 Speaker 1: some failing companies. Miss Tilton becomes an owner of those 134 00:08:39,960 --> 00:08:43,800 Speaker 1: companies with you to turning them around. She also runs, however, 135 00:08:44,000 --> 00:08:47,719 Speaker 1: a funds which is used to extend funds to the 136 00:08:47,800 --> 00:08:51,800 Speaker 1: failing firms, which she needs in order to turn them around. Okay, 137 00:08:52,120 --> 00:08:55,080 Speaker 1: it's a fairly unorthodox arrangement, but there's nothing illegal about 138 00:08:55,160 --> 00:08:58,840 Speaker 1: illegal about it as such, and all right, So ultimately, 139 00:08:58,920 --> 00:09:02,240 Speaker 1: of course, the whole plan comes a cropper. It doesn't 140 00:09:02,320 --> 00:09:05,520 Speaker 1: end up working out. So the SEC brings a suit 141 00:09:05,600 --> 00:09:08,880 Speaker 1: against her, alleging that she's defrauded the investors in the 142 00:09:09,080 --> 00:09:12,640 Speaker 1: funds that she used to extend financing to the failing 143 00:09:12,679 --> 00:09:15,880 Speaker 1: companies that she was trying to turn around. She actually 144 00:09:15,960 --> 00:09:19,080 Speaker 1: objects to that SEC suit. She thinks that it's unconstitutional. 145 00:09:19,480 --> 00:09:21,439 Speaker 1: That was, of course a stilly argument on her part, 146 00:09:21,520 --> 00:09:23,880 Speaker 1: and she lost it. She was rebuffed there, but the 147 00:09:24,040 --> 00:09:28,240 Speaker 1: SEC nevertheless ultimately found in her favor. It said that, Okay, look, 148 00:09:28,320 --> 00:09:31,480 Speaker 1: she didn't defraud those investors because she had informed them 149 00:09:31,840 --> 00:09:34,920 Speaker 1: all along precisely how she was going to be operating. 150 00:09:35,520 --> 00:09:38,480 Speaker 1: And also she had, um, you know, being given a 151 00:09:38,480 --> 00:09:42,920 Speaker 1: great deal of discretion under those funds organizing documents. Okay, Now, 152 00:09:43,160 --> 00:09:46,880 Speaker 1: the fund those who invested in the funds weren't satisfied, 153 00:09:46,960 --> 00:09:49,640 Speaker 1: of course, with the SEC finding. They sued in their 154 00:09:49,679 --> 00:09:52,760 Speaker 1: own names. So now we have a civil action brought 155 00:09:52,800 --> 00:09:56,000 Speaker 1: by private parties rather than by a regulator. They sued 156 00:09:56,080 --> 00:10:00,640 Speaker 1: her on racketeering claims or racketeering charges. The problem with 157 00:10:00,800 --> 00:10:03,120 Speaker 1: that suit is that that kind of suit had been 158 00:10:03,200 --> 00:10:07,160 Speaker 1: foreclosed in the mid ninety nineties um by Congress, right 159 00:10:07,280 --> 00:10:09,599 Speaker 1: in the so called ps l R A, which was 160 00:10:09,760 --> 00:10:11,959 Speaker 1: essentially a suit that I mean, a statute that was 161 00:10:12,000 --> 00:10:15,679 Speaker 1: designed to place limitations on the kinds of civil suits 162 00:10:15,720 --> 00:10:20,400 Speaker 1: that could be brought against alleged securities fraudsters. So that 163 00:10:20,640 --> 00:10:24,120 Speaker 1: suit was thrown out ultimately by the court precisely because 164 00:10:24,160 --> 00:10:27,560 Speaker 1: the ps l r A prohibited it um. One last 165 00:10:27,600 --> 00:10:29,319 Speaker 1: thing may be worth noting in this connection is that 166 00:10:29,559 --> 00:10:32,000 Speaker 1: miss Chilton might be right, and she might not be 167 00:10:32,160 --> 00:10:34,320 Speaker 1: right when she says that she's been fully vindicated by 168 00:10:34,400 --> 00:10:37,559 Speaker 1: this most recent decision um. The reason that she might 169 00:10:37,640 --> 00:10:39,800 Speaker 1: not be right is that this is just the suit 170 00:10:39,920 --> 00:10:43,199 Speaker 1: was tossed out because it's foreclosed by statute, not on 171 00:10:43,280 --> 00:10:46,000 Speaker 1: the merits right. So she could in theory still be 172 00:10:46,040 --> 00:10:47,959 Speaker 1: wrong on the merits. But we'll never have occasion to 173 00:10:48,000 --> 00:10:51,720 Speaker 1: find that out because Congress says you can't bring suits 174 00:10:51,800 --> 00:10:54,719 Speaker 1: like that against people like miss Chilton. So I think 175 00:10:54,760 --> 00:10:58,280 Speaker 1: I need a diagram now to figure out all these 176 00:10:58,320 --> 00:11:03,360 Speaker 1: different lawsuits. So Judge William Pauli's decision that found that 177 00:11:03,440 --> 00:11:06,800 Speaker 1: these allegations were outside the scope of federal racketeering laws. 178 00:11:06,880 --> 00:11:10,120 Speaker 1: That was not based on a determination that the allegations 179 00:11:10,160 --> 00:11:14,360 Speaker 1: were false. That was procedural, right exactly, Its entirely procedural 180 00:11:14,480 --> 00:11:16,439 Speaker 1: as a matter of essentially whether the law, you know, 181 00:11:16,760 --> 00:11:20,040 Speaker 1: whether this this kind of suit is permitted. Again, it's 182 00:11:20,040 --> 00:11:23,320 Speaker 1: a civil suit. This was a private litigation brought at 183 00:11:23,320 --> 00:11:27,000 Speaker 1: a civil suit, not a regulatory charge. Uh. And essentially 184 00:11:27,040 --> 00:11:29,240 Speaker 1: with the court found was that, well, that's exactly the 185 00:11:29,360 --> 00:11:32,040 Speaker 1: kind of suit that Congress decided no longer to allow 186 00:11:32,559 --> 00:11:34,880 Speaker 1: in the mid ninety nine when it passed b. S 187 00:11:35,000 --> 00:11:38,920 Speaker 1: l r. A. So, is there any other way that 188 00:11:39,080 --> 00:11:42,240 Speaker 1: they can go after her the the you know, the 189 00:11:42,400 --> 00:11:47,120 Speaker 1: investors as far as the racketeering charges. Is there any 190 00:11:47,200 --> 00:11:49,599 Speaker 1: other kind of suit or are they dead in the 191 00:11:49,679 --> 00:11:52,959 Speaker 1: water there? Well, in theory, they could try to go 192 00:11:53,160 --> 00:11:56,319 Speaker 1: after her on the same theory that the sec itself 193 00:11:56,480 --> 00:11:59,480 Speaker 1: had gone after her. But in light of the fact 194 00:11:59,559 --> 00:12:02,800 Speaker 1: that the s s SEE itself ultimately found that she 195 00:12:02,960 --> 00:12:05,439 Speaker 1: had not defrauded her investors because she had, you know, 196 00:12:05,520 --> 00:12:08,400 Speaker 1: even though it was an unorthodox arrangement, she had informed 197 00:12:08,440 --> 00:12:10,720 Speaker 1: them of everything. And plus again they had entrusted her 198 00:12:10,760 --> 00:12:13,440 Speaker 1: with a great deal of scratch and lighted the SEC's 199 00:12:13,480 --> 00:12:17,400 Speaker 1: finding that way, it seems unlikely that any private suit 200 00:12:17,559 --> 00:12:20,920 Speaker 1: would succeed here. A private suit that doesn't sound in 201 00:12:21,040 --> 00:12:25,120 Speaker 1: racketeering might be bringable, but again that would probably lose 202 00:12:25,160 --> 00:12:27,520 Speaker 1: on the marriage in light of what the SEC itself 203 00:12:27,600 --> 00:12:30,640 Speaker 1: had found. So, Bob, let's go to lawsuit number three, 204 00:12:30,840 --> 00:12:34,600 Speaker 1: which she lost, tell us about what the Delaware judge ruled, 205 00:12:34,880 --> 00:12:38,520 Speaker 1: and she's going to appeal that decision. Yeah, so the 206 00:12:38,559 --> 00:12:41,120 Speaker 1: Delaware judge. I mean, so, in the midst of all 207 00:12:41,160 --> 00:12:45,640 Speaker 1: of this, Um, you know, she ultimately, how should I say, 208 00:12:45,920 --> 00:12:48,760 Speaker 1: the funds that she was managing in order to raise 209 00:12:48,880 --> 00:12:52,920 Speaker 1: money that would help her finance her attempts to turn 210 00:12:53,000 --> 00:12:56,160 Speaker 1: around at the failing companies that she was trying to tournament. Uh, 211 00:12:56,400 --> 00:12:59,800 Speaker 1: those particular funds ultimately asked her as there as their 212 00:12:59,800 --> 00:13:03,640 Speaker 1: may manager. Right. Uh. They auskedd her essentially on the 213 00:13:03,679 --> 00:13:07,599 Speaker 1: basis that well, this was essentially again the arrangement was 214 00:13:07,679 --> 00:13:11,240 Speaker 1: so unorthodox and that it was such an inherently conflicted 215 00:13:11,720 --> 00:13:14,120 Speaker 1: sort of arrangement that it basically presented her with such 216 00:13:14,160 --> 00:13:17,000 Speaker 1: a conflict of interest that it wouldn't do for her 217 00:13:17,080 --> 00:13:20,079 Speaker 1: any longer to be on, you know, managing those particular funds. 218 00:13:20,679 --> 00:13:24,280 Speaker 1: Um and Uh. They asked her on that basis, right, 219 00:13:24,520 --> 00:13:27,079 Speaker 1: so the Delaware Court. So she sues saying that that's 220 00:13:27,080 --> 00:13:29,920 Speaker 1: a wrongful termination, so to speak. Right in effect, she's saying, 221 00:13:29,960 --> 00:13:32,440 Speaker 1: that was a wrongful separance of my relation with these 222 00:13:32,480 --> 00:13:36,640 Speaker 1: particular funds. The Delaware court upheld this, but it didn't 223 00:13:36,679 --> 00:13:39,000 Speaker 1: uphold this on the on the on the basis of 224 00:13:39,080 --> 00:13:41,040 Speaker 1: a theory to the effect that well, she really was 225 00:13:41,520 --> 00:13:44,720 Speaker 1: somehow wronging those funds, just saying that the funds themselves 226 00:13:44,800 --> 00:13:47,079 Speaker 1: have a good bit of discretion when it comes to 227 00:13:47,160 --> 00:13:50,079 Speaker 1: determining who they want to be managing them. Uh. And 228 00:13:50,160 --> 00:13:52,560 Speaker 1: they also have discretion to you know, say, look, we're 229 00:13:52,640 --> 00:13:56,360 Speaker 1: uncomfortable with the conflict of interest this places her in. Uh. 230 00:13:56,400 --> 00:13:58,120 Speaker 1: And so we're going to ask her on that basis. 231 00:13:58,720 --> 00:14:00,280 Speaker 1: I think that's going to be a harder one for 232 00:14:00,360 --> 00:14:03,640 Speaker 1: her to challenge. Write the Delaware court, having upheld the 233 00:14:03,760 --> 00:14:08,559 Speaker 1: fund's decision upheld on unreasonable grounds, on sensible grounds, it 234 00:14:09,000 --> 00:14:12,600 Speaker 1: wasn't clearly wrong or clearly illegal or clearly in breach 235 00:14:12,640 --> 00:14:15,400 Speaker 1: of contract for the funds to oust miss Tilton on 236 00:14:15,480 --> 00:14:18,000 Speaker 1: the grounds that they did. Uh. And so I think 237 00:14:18,559 --> 00:14:22,280 Speaker 1: her appeal of that particular decision is not likely to prevail. 238 00:14:23,600 --> 00:14:25,480 Speaker 1: Maybe my big good idea to quit while she's ahead, 239 00:14:25,520 --> 00:14:27,440 Speaker 1: if I could put it that way. We have about 240 00:14:27,480 --> 00:14:31,200 Speaker 1: one minute here right now. What is her power? What 241 00:14:31,560 --> 00:14:34,640 Speaker 1: is she in charge of? Is she managing? Is she 242 00:14:34,760 --> 00:14:38,840 Speaker 1: getting money from different things? Where does she stand? Well, 243 00:14:38,920 --> 00:14:41,760 Speaker 1: she's got other funds now, of course, right, Uh? And 244 00:14:41,920 --> 00:14:44,240 Speaker 1: so I mean she's still doing the kinds of things 245 00:14:44,280 --> 00:14:46,000 Speaker 1: she was doing before, which as far as we know, 246 00:14:46,600 --> 00:14:49,640 Speaker 1: are legal. Right, there's nothing, Um, there's nothing that's kind 247 00:14:49,680 --> 00:14:54,040 Speaker 1: of the per se illegal or per se shady about 248 00:14:54,080 --> 00:14:56,640 Speaker 1: what she's doing. What she's doing is unorthodox, and it 249 00:14:56,720 --> 00:15:00,160 Speaker 1: does definitely raise certain conflicts of interest. Uh. And could 250 00:15:00,200 --> 00:15:01,840 Speaker 1: very well be that the law in the distant past 251 00:15:02,040 --> 00:15:05,920 Speaker 1: would have just flat out prohibited her whole wearing these 252 00:15:06,120 --> 00:15:09,400 Speaker 1: particular hats in such a way as subjects or to 253 00:15:09,440 --> 00:15:11,920 Speaker 1: this particular conflict of interest. But the laws that stands 254 00:15:11,960 --> 00:15:14,880 Speaker 1: now doesn't prevent that. So she's essentially doing the kinds 255 00:15:14,920 --> 00:15:18,600 Speaker 1: of things that she was doing before now with another firm. 256 00:15:18,920 --> 00:15:22,520 Speaker 1: All right, Bob, that was an excellent explanation of a 257 00:15:22,720 --> 00:15:27,720 Speaker 1: really complicated situation. That's Robert Hockett, professor at Cornell University 258 00:15:27,880 --> 00:15:31,800 Speaker 1: Law School. Thanks for listening to the Bloomberg Law Podcast. 259 00:15:32,200 --> 00:15:36,240 Speaker 1: You can subscribe and listen to the show on Apple podcast, SoundCloud, 260 00:15:36,360 --> 00:15:40,240 Speaker 1: and on Bloomberg dot com slash podcast. I'm June Brasso. 261 00:15:40,720 --> 00:15:44,560 Speaker 1: This is Bloomberg Ye.