Tuesday, October 25, 2016

Saint Crispin’s Day

Saint Crispin’s Day
(601 Years Ago Today)

      Today is the anniversary of the Battle of Agincourt, taking place in 1415 (601 years ago) between the forces of France and her various allies and the invading English forces under the command of King Henry V. Shakespeare, by having his character Henry V repeatedly refer to the day of the battle as St. Crispin’s Day, otherwise saved this obscure saint from being lost, save for experts in hagiography, to the mist of history.
      The English forces, likely numbering in the range of 7,000, were compelled to do battle with a numerically superior French force likely numbering in excess of 20,000. All else being equal, the English force should have expected to be annihilated. As is typical in the case of significant historical events, however, all things were not equal. The French and their allies were disorganized, and overall command of the battlefield was never achieved.  Rather, individual nobles led their own contingents forward in a disorganized and sometimes conflicting manner.  The terrain favored the English in several ways.  The French “artillery,” crossbowmen (largely Pisan mercenaries) were not effectively deployed, and they had the unenviable task of shooting uphill.  That same terrain required the French forces, both mounted and on foot, to attack uphill over a recently plowed field that, consequent to the recent rain, was more mud than dirt. The French knights and men at arms, slogging their way uphill, were a “target rich environment” for the rain of arrows let loose by the English longbows; assuming Henry’s forces numbered 7,000, likely 5,800 were longbowmen, each releasing four to six arrows a minute.

      Another factor was that the very size of the French force worked to its disadvantage in that those behind continued pressing forward, hoping for their moment of glory, even while those at the front were being slaughtered. It was not quite the situation suffered by the Romans at the hands of Hannibal at Cannae, but then likely it was not hugely better.
      While comparative casualty figures are effectively impossible to ascertain, it is clear that the French were badly mauled with significantly more casualties than the English. Further, a significant number of French nobles fell in contrast to only two English nobles.
      For an excellent review of the battle, see Juliet Barker's Agincourt.
      As invented by Shakespeare in Henry V, Scene iii, the St. Crispin’s Day speech would immortalize Henry V:

WESTMORELAND. O that we now had here
But one ten thousand of those men in England
That do no work to-day!

KING. What’s he that wishes so?
My cousin, Westmoreland? No, my fair cousin;
If we are mark’d to die, we are enow
To do our country loss; and if to live,
The fewer men, the greater share of honour.
God’s will! I pray thee, wish not one man more.
By Jove, I am not covetous for gold,
Nor care I who doth feed upon my cost;
It yearns me not if men my garments wear;
Such outward things dwell not in my desires.
But if it be a sin to covet honour,
I am the most offending soul alive.
No, faith, my coz, wish not a man from England.
God’s peace! I would not lose so great an honour
As one man more methinks would share from me
For the best hope I have. O, do not wish one more!
Rather proclaim it, Westmoreland, through my host,
That he which hath no stomach to this fight,
Let him depart; his passport shall be made,
And crowns for convoy put into his purse;
We would not die in that man’s company
That fears his fellowship to die with us.
This day is call’d the feast of Crispian.
He that outlives this day, and comes safe home,
Will stand a tip-toe when this day is nam’d,
And rouse him at the name of Crispian.
He that shall live this day, and see old age,
Will yearly on the vigil feast his neighbours,
And say “To-morrow is Saint Crispian.”
Then will he strip his sleeve and show his scars,
And say “These wounds I had on Crispin's day.”
Old men forget; yet all shall be forgot,
But he’ll remember, with advantages,
What feats he did that day. Then shall our names,
Familiar in his mouth as household words-
Harry the King, Bedford and Exeter,
Warwick and Talbot, Salisbury and Gloucester-
Be in their flowing cups freshly rememb’red.
This story shall the good man teach his son;
And Crispin Crispian shall ne’er go by,
From this day to the ending of the world,
But we in it shall be remembered-
We few, we happy few, we band of brothers;
For he to-day that sheds his blood with me
Shall be my brother; be he ne’er so vile,
This day shall gentle his condition;
And gentlemen in England now-a-bed
Shall think themselves accurs’d they were not here,
And hold their manhoods cheap whiles any speaks
That fought with us upon Saint Crispin’s day.
      HERE IS A LINK to Kenneth Branagh’s masterful rendition.

      Today is also the anniversary of the storied “Charge of the Light Brigade” in the Crimean War (1854). That particular engagement was, for the English forces, significantly less successful.

Saturday, October 22, 2016

“Let There Be Light,” On October 22, 4004 b.c.

Let There Be Light,” On October 22, 4004 b.c.

       The Book of Genesis begins “In the beginning God created the heavens and the earth.” At some time thereafter “Then God said, “’Let there be light;’ and there was light.”  According to calculations made by James Ussher, Archbishop of Armagh, that first moment of creation took place at the onset of evening (6 p.m.) proceeding October 23, 4004 b.c.  These calculations were made by working backwards from the birth of Jesus in 4 b.c. (Ussher accounted for Dionysius’ error in calculating the year of Jesus’ birth) based upon the ages of the Patriarchs and the Kings of Israel as set forth in the Old Testament.

      By Ussher’s calculations, October 23 would have been a Sunday, the first day of the seven day week described in Genesis that would conclude on Saturday, the Sabbath day of rest. 

      Ussher’s dating of the Exodus from Egypt to 1491 b.c. comports with the modern scholarship of its dating (to the extent it took place as a historic event) to a so called “early Exodus.”

      Ussher’s chronology achieved its fame by being incorporated into numerous Bibles, they sometimes listing its dates in marginal notes.  Numerous similar chronologies, including one by Isaac Newton and another by the Venerable Bede, failed to be so referenced and faded into obscurity.

     Of course it is all malarkey; the age of the Earth is measured in billions, not thousands, of years.  In addition, and just to be snarky, if Creation took place at 6 p.m., was that Eastern Standard Time?

      October 22 is also the anniversary of the “Great Disappointment,” the failure of the Second Coming predicted for 1844 by William Miller and certain of his disciples based upon their interpretation of Biblical texts.  When October 23, 1844 dawned the fallacy of their prediction was laid bare.

Tuesday, October 18, 2016

Disassociation of Member Pursuant to Operating Agreement Given Effect

Disassociation of Member Pursuant to Operating Agreement Given Effect

      A recent decision from Connecticut held that the provision of an operating agreement providing that upon certain defaults a member would be disassociated would be enforced. The immediate effect of this ruling is that a suit against the disassociated member for breach of fiduciary duty and conversion of company assets may proceed in federal court pursuant to diversity jurisdiction Inteliclear, LLC v. Victor, Civil No. 3:16cv1403 (JBA), 2016 WL 5746349 (D. Conn. Oct. 3, 2016).
      Inteliclear, LLC had four members: Victor (30%), Powell (30%), Barretto (30%) and DeVito (10%). Victor was the LLC’s “General Manager.” Prior to this suit they had been involved in litigation as to the company. After the dismissal of that litigation (initiated by Victor), the other members voted to remove Victor as the General Manager, and this suit was filed against him.
      The claims against Victor arose out of his operation for the LLC other than in compliance with the operating agreement. For example, while it provided that a check exceeding $5000 could be issued only with the approval of a majority of the members, Victor was apparently writing $5000 checks without that member consent. In addition, he was using company funds to pay personal expenses. Consequent to that conduct, the members other than Victor advised him that he was disassociated as provided in the operating agreement.  The operating agreement of Inteliclear, LLC provided in part:
   The default by any Member in the performance of any Member’s covenants, obligations, responsibilities, duties or undertakings set forth and provided for under the provisions of the Operating Agreement, this Members Agreement, the Members Confidentiality and Non-Compete Agreement or any amendment or successor thereto, in which event, in addition to any remedy in law or at equity available to the non-defaulting Members, the non-defaulting Members may elect to treat such default as a withdrawal of the defaulting Member in connection with such Member’s desire to no longer provide Member’s Services to the Company under paragraph 8.B of this Members Agreement and may proceed with the elections provided non-withdrawing Members in paragraphs 8.B(1) and (2) above in regard the defaulting ember’s [ (sic) ] Interest.”Barretto, Powell and DeVito advised Victor that his violations of the operating agreement would be treated as effecting Victor’s disassociation from the LLC. Victor then moved the LLC’s funds to a new bank. He as well withdrew $30,000 for himself. The suit sought a declaration that Victor, having been disassociated from the LLC, could not act on its behalf. 2016 WL 5746349, n. 7.
      The thrust of this decision was whether the suit could be filed against Victor in federal court. An LLC is treated, for purposes of diversity jurisdiction, as having the citizenship of each of its members. If Victor was still a member of the LLC, there would be no diversity and the suit would be dismissed. If, in the alternative, Victor was a disassociated (i.e., a former member) of the LLC, the suit could proceed.
      The court would hold that Victor was disassociated from the LLC (i.e., no longer a member) and in consequence his citizenship would not be attributed to the LLC. In doing so it had to resolve the question of whether it was making a determination on the merits, which it could not due absent a trial on the merits, or rather resolving a jurisdictional question. In part on the basis that there had been a hearing on the motion for a restraining order, that affording Victor due process, the court said:
   The Court is satisfied that the appropriate way to proceed is to hear and decide the factual issues bearing on its subject matter jurisdiction, recognizing that they also implicate elements of at least one of the substantive claims as well as the basis for the injunctive relief sought. 2016 WL 5746349, *5.
       Reviewing Victor’s conduct, the court found that injunctive relief keeping him from alleging he had control of the LLC was warranted on the basis that he was no longer a member of the LLC. Rather, he had been disassociated under the terms of the operating agreement consequent to his own conduct.
   The Court finds that Plaintiff has demonstrated that Barretto, Powell and DeVito had legitimate justification for believing that Defendant defaulted in the performance of his “covenants, obligations, responsibilities and undertakings” under the Agreements.  As early as the end of 2015, Barretto, Powell and DeVito suspected Defendant was broadly misappropriating InteliClear funds and hired Ram Associates, an accounting and financial consulting firm, to investigate records that they became privy to as a result of the state court action but had not been otherwise able to obtain from Defendant in the ordinary course of business.
   Most significantly, as Plaintiff claims, Plaintiff’s American Express and bank records appear to show that Defendant treated InteliClear’s accounts as his own personal piggy bank. The evidence showed that Defendant used Plaintiff’s American Express card to purchase personal items such as a guitar costing over $500 for himself; airline tickets for his wife, daughter and even his daughter’s former boyfriend, totaling well over $2,000; a gym membership costing over $1,000 for his wife and that he used InteliClear funds to pay his personal credit card bill.  The evidence showed these charges and payments were not “reasonable and necessary business, educational and profession expenses” permitted by Paragraph 4(1) of the Members Agreement, nor reimbursable expenses under Paragraph 8.1 of the Operating Agreement. Additionally, they were not authorized by the other Members. Plaintiff characterizes Defendant’s actions as, in effect, stealing from Plaintiff, demonstrating that he is a defaulting Member under Paragraph 12 of the Members Agreement. 2016 WL 5746349, *5 (citations to record deleted).

Monday, October 17, 2016

LLC Distributions and Self-Employment Tax

LLC Distributions and Self-Employment Tax

      Whether and when members of an LLC are subject to self-employment tax with respect to distributions they receive therefrom is a (at best) complicated question. A recent article posted in Forbes sets forth a non-technical explanation of how the question arises, even as it explains that there is no definitive answer.
      HERE IS A LINK to that article.

Friday, October 14, 2016

The Battle of Hastings

The Battle of Hastings


Today marks the 950th anniversary of the Battle of Hastings.

1066 has already been a tumultuous year in England. On January 5, Edward the Confessor died, leaving the English throne to Harold Godwinson (King Harold II). Harold’s family, the Godwins, were the most powerful in England. Harold was himself an earl, and as well the father-in-law to Edward the Confessor, the latter having been married to Harold’s daughter Edith. William of Normandy, also known as William the Bastard, claimed that he had been designated as Edward’s successor and that Harold had once promised him that he, Harold, disclaimed any right to the throne, leaving it instead to William. In addition, Harold Hardrada of Norway asserted a claim to the English throne.

Sometime in September, Harold Hardrada had landed his troops in the north of England. After fast marching his troops north, the army of Harold Godwinson met the invading army of Harold Hardrada (supported by Tostig Godwinson, Harold’s brother) at the Battle of Stamford Bridge (HERE IS A LINK to a posting on those events). The invading army was defeated, and Hardrada was killed. Learning of William’s invasion in the south, Harold had to turn his army around and fast march it south in order to respond to this new threat. Those forced marches were some 240 miles each way.

For reasons that have baffled many later historians, Harold, upon arriving in London, quickly turned his troops, already exhausted from the march, toward Hastings. He did this notwithstanding that reinforcements were due to arrive the following day. Still, Harold led his forces towards William’s beachhead, leaving word for the reinforcements to actual up as soon as possible. Those reinforcements included the archers.

The Battle of Hastings proper (there was an earlier skirmish) probably began around 11 in the morning. Through most of the day the forces of Harold prevailed – attacks on the shield wall were not effective, and the Norman archers were not effective firing up-hill. Harold holding his own against William would have been for Harold a win. As observed by Frank McLynn in 1066-The Year of Three Battles:
[Harold] knew he had only to hold out until nightfall when reinforcements were certain to arrive; he could play for a draw but William had to have a win.

The Norman infantry having failed to break through, William sent in his calvary. Attacking uphill, they did not have the force necessary to break through. When William’s flank started to fail (the Breton forces) and William was unhorsed and rumored to be dead. Harold’s forces began an advance downhill, their shielded wall still intact and functionally invulnerable. But then the advance lost its momentum, perhaps due to the death of its leader Leofwine, Harold’s brother. William’s forces pushed back and in order Harold’s forces reversed themselves back uphill. It was then a battle of attrition, and the Norman invaders were lost at a lower rate than were Harold’s forces. A combined archery and armored calvary assault finally broke the shielded wall, and the battle dissolved into combat between small units ensued. Harold and the remaining troops around him were attacked and Harold fell to multiple sword blows and a lance through his chest.

Maybe an hour after Harold fell, reinforcements, including additional housecarls, arrived.

The accepted, albeit almost certainly apocryphal, story is that Harold fell after being struck in the eye with an arrow. The Bayeux Tapestry may be interpreted as saying such. However, the “King Harold was killed” heading is over two figures (neither wearing a crown), one with an arrow in his eye and the other being struck down by a sword. If the former is meant to be Harold, the famous arrow in the eye as depicted in the Bayeux Tapestry may be a later invention. It is not mentioned in the earliest accounts of the battle. In addition, in medieval iconography, an arrow in the eye is the punishment afforded a perjurer. Having gone against his oath to leave the throne to William, some might have felt it poetic justice, even if not based in reality.

By Christmas William crowned King of England and was in Westminster Abbey accepting pledges of fealty from England’s mobility. Still, the next two decades of his reign would see numerous rebellions and challenges, including one from his own son Robert.

            As for the Bayeux Tapestry itself, HERE IS A LINK is an animated (and translated) version.

            The English like to claim that the Norman Invasion was the last invasion of England. This is not true. For example, during the Barons War, a French force invaded and had control of a significant portion of southern England, and the Isle of Wight was invaded in 1545. But the Norman Conquest is the last successful invasion of England.

Thursday, October 13, 2016

The Beginning of the End For the Knights Templar

The Beginning of the End For the Knights Templar


      Today marks the anniversary of the widespread arrest in 1307 throughout France of the members of the Order of Poor Fellow-Soldiers of Christ and Temple of Solomon, better known as the Knights Templar.

      Founded shortly after the First Crusade as a monastic order, the mission of the Templars was to provide protection to pilgrims coming to the Holy Land and otherwise protect the Latin Kingdom.  Eventually, the Order developed a rather sophisticated banking organization.  For example, one proposing to travel from England to the Holy Land could deposit funds with the Templars in England, receiving in return what was essentially a letter of credit against which the individual could make withdrawals as they travelled through Europe and ultimately to the Holy Lands.  The military component of the Order, although not large in actual numbers (never more than 1,500 to 2,000 knights), was considered highly effective – after the Battle of Hattin, Saladin ordered the execution of all captured Templars.

      With the eventual loss of the Holy Land territories by the turn of the 14th century, the Templars were without a reason for existence.  At the same time, Philip IV of France, anxious to address a depleted royal treasury by expropriating Templar property and as well exterminate his substantial debts to the Order, fabricated numerous salacious allegations against the Templars, leading to their mass arrest on October 13, 1307.  Ultimately Pope Clement V, then resident in Avignon and largely a pawn of the French crown, issued a bull directing that Templars, wherever located, should be arrested.  The remnants of the Order, other than those executed on spurious charges of heresy, were eventually either pensioned or absorbed into other military orders such as the Knights Hospitaller or the Teutonic Knights

      A papal finding (a/k/a the Chinon parchment) determined that the Templars were not guilty of the many charges against them including idolatry and heresy.  Their actual failing was having lost their mission while being at least perceived as being wealthy while a king needed funds.  Those assertions are in many instances questionable – a detailed review of the inventories of the English properties of the order demonstrated a far less than extravagant lifestyle. Although the Templars would be found innocent of heresy, as a political concession the Order was dissolved in 1312, its properties turned over to the Knights Hospitaller.

      Notwithstanding the efforts of numerous modern authors, the Templars did not possess the Holy Grail, irrespective of whether that was a physical cup or, as suggested in one particularly fanciful book, an oblique reference to Mary Magdalene and, ultimately, the line of Merovingian kings. Ignore the movies as well – Guy de Lusignan was not, as “The Kingdom of Heaven” would have you believe, a Templar. A well written introduction to the history is The Templars by Piers Paul Read.  The books by Malcolm Barber are as well worthwhile.

        Philip IV's moniker is “the Fair”; who says history does not have a sense of irony?

Tuesday, October 11, 2016

The 2015 Amendments to the Kentucky Business Entity Statutes

The 2015 Amendments to the Kentucky Business Entity Statutes

The Northern Kentucky Law Review has released my article The 2015 Amendments to the Kentucky Business Entity Statutes.  This article reviews the various changes made by 2015 HB 440, they including:
  • the addition of a statutory derivative action to the LLC Act;
  • simplification of the statute governing the approval of a lawsuit brought on behalf of an LLC;
  • simplification of the filings made in connection with corporate and LLC mergers;
  • “forum selection” for internal disputes involving corporations;
  • clarification of the exclusivity rule of corporate dissenter rights; and
  • the adoption of the Unincorporated Nonprofit Association Act.
      HEREIS A LINK to the article.