The CSN Houston Bankruptcy Clown Show Just Keeps Clowning Away
Jim Crane, Les Alexander and Robert Pick have been "invited to attend to informally discuss a resolution" to the CSN Houston bankruptcy matter on Friday, March 28. The invitation has been extended by Federal District Court Judge Lynn Hughes, the man overseeing the Astros' appeal of CSN Houston's involuntary bankruptcy.
The wording is polite, and an unsuspecting party might believe that attendance is not mandatory. It's an invitation, after all. But the proper interpretation is that this is a command, and one doesn't ignore the commands of a federal judge, especially one as mercurial as Lynn Hughes.
And there's one further thing: The gentlemen are not allowed to bring the attorneys handling the court work. Judge Hughes has ordered them to appear without outside counsel. Each may bring along an aide to the meeting, but that aide cannot be outside counsel, and if one of them cannot attend, then he may "send a delegate who is not outside counsel in their stead -- only if the delegate has meaningful authority."
Now you're probably wondering about a few things. Like who is Robert Pick -- he's a senior Vice President of Corporate Development for Comcast. But more importantly, you want to know just what this means in regards to CSN Houston and whether you will ever be able to get the damn channel on your cable/satellite package.
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So being one who has never dealt with Judge Hughes, I asked around of some my fellow lawyers who have tried cases before the judge. And the basic summation of their responses: this clown show is about to go to the next level of clown show clown-showiness.
It's not really proper for a judge to request to meet with parties, but to then forbid the presence of their attorneys. But as I was told, Judge Hughes makes his own rules, and those rules don't necessarily match the proper legal rules -- the rules also tend, I'm told, to change from case to case. He also believes he's smarter than everybody else, especially attorneys, and he's absolutely convinced that he understands the case better than anybody else, including the parties who have been living the case for years.
Hughes is calling all of them to his office, and he's going to give his thoughts on the case, probably along the lines that there's no way the Astros are going to win this appeal and that it's time for Crane to act like a grown-up and give up the appeal. He's also said in past hearings that he's not happy with the fraud lawsuit between Jim Crane and Drayton McLane/Comcast, so odds are the he'll try to strong-arm Crane into dismissing the suit or to request that it be put on hold until some time way in the future.
Hughes doesn't suffer idiots well, I've been told, and if either of the parties dares to disagree, that could doom them to being on the wrong side of his rulings for as long as the case lasts. So Crane and Alexander and Pick are going to have to bite their tongues and not fight back. And the parties better know every single, minute detail of the bankruptcy and the agreements behind forming the network because Hughes will know everything (or think he does).
I don't like that the parties can't bring their attorneys -- there's nothing forbidding them from bringing their in-house counsel, but in-house and outside counsel serve very different functions, and it's the outside counsel who will know every single detail of the litigation and the possible strategy moves. But the fact that Hughes wants these men and/or someone with authority to make binding decisions present seems to indicate that he thinks he can get this thing settled and out of his courtroom.
But what's it all mean?
I think it all means that Hughes is going to go all bad cop and try and get the network working. I believe he'll try to force changes to the operating agreements, primarily the unanimous consent provisions and that most-favored nation status bestowed on Comcast. He'll probably tell Crane he has to act as an owner to CSN Houston in the same manner in which he acts as owner of the Astros, and that he can't put the network interests behind the interests of the Astros.
Comcast withdrew its offer to purchase the entire network earlier this week, but I think Hughes will try to force Comcast to make a legit attempt to buy out the Astros, and to make sure the Astros get what's owed. And I believe he will try to order the parties to accept any offer from Direct TV/AT&T that comes close to what Comcast is paying.
But here's the deal. Nobody has to agree with anything. This is an informal meeting and the judge can't make them do anything. He might tell them how he plans to rule, but he can't make them settle, or come to terms, or make offers to buy each other out. Judges like to think they're the most powerful people on earth, but they're not. This is Jim Crane's life, his business, and he can do with this appeal whatever he chooses. He might make Judge Hughes mad, but that's a risk every person appearing before Judge Hughes takes, and if Crane doesn't like what he's hearing, then there's nothing that can force him, or Alexander or Comcast to take a deal.
In the end, this might all turn out to be a good deal. Maybe everybody will see the light and come Opening Day, CSN Houston will suddenly appear on everybody's television. If not, everybody gets an idea of the judge's thinking, and gets a clue as to how the case will go.
As a friend who practices before Judge Hughes told me, welcome to the Clown Show. But this is the Astros, Rockets, Comcast, and CSN Houston and this thing has been a Clown Show since October of 2012.
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