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Legal News for Weds 5/15 - Cohen Testimony in Trump Trial Rundown, Giuliani Delayed BK Proceedings, Retailer BKs Hit Landlords Hard and Musk's Impact on DE Courts
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Legal News for Weds 5/15 - Cohen Testimony in Trump Trial Rundown, Giuliani Delayed BK Proceedings, Retailer BKs Hit Landlords Hard and Musk's Impact on DE Courts

Donald Trump's trial, with takeaways from Cohen’s testimony, cover Giuliani's delayed bankruptcy proceedings, retailer bankruptcy effects on landlords and Musk’s impacts on a Delaware court.
Donald Trump looking very well and very innocent in court, pencil sketch

This Day in Legal History: Standard Oil Dissolved

On this day in legal history, May 15, 1911, the United States Supreme Court delivered a landmark decision that significantly altered the landscape of American business practices. The case in question was Standard Oil Co. of New Jersey v. United States, where the Court found Standard Oil guilty of monopolistic practices in violation of the Sherman Antitrust Act. This Act, passed in 1890, was designed to combat anti-competitive practices, reduce market domination by individual corporations, and preserve fair competition.

The decision to break up John D. Rockefeller's oil empire was pivotal in the enforcement of antitrust laws in the United States. The Court's ruling declared that Standard Oil had restrained trade and maintained monopolistic power through unfair and unethical business practices, including predatory pricing and collusive dealings. The verdict mandated the dissolution of Standard Oil into 34 independent companies, some of which have since evolved into major players in today's oil industry, such as ExxonMobil, Chevron, and ConocoPhillips.

The significance of this ruling extended beyond the immediate impact on Standard Oil. It set a precedent for the interpretation of the Sherman Act, introducing the "rule of reason" doctrine. This doctrine asserts that only those combinations and contracts that unreasonably restrain trade are subject to actions under the antitrust laws. This nuanced approach allowed for greater flexibility in the application of the law, acknowledging that some business combinations might enhance competition.

The case also highlighted the growing public and governmental concern over the power wielded by large corporations, which led to increased regulation and oversight over monopolies. The ruling was a crucial step in defining the boundaries of lawful conduct for businesses, emphasizing that large size and monopoly were not inherently illegal, but that harmful, anti-competitive practices would not be tolerated.

The Standard Oil decision remains one of the most important in the annals of American legal and economic history, symbolizing the struggle between corporate power and public interest. It underscores the ongoing challenges and complexities of balancing economic power with the need to preserve free market competition, a concept still very much at the heart of American antitrust enforcement today.


The bankruptcy case of Rudolph Giuliani, managed by Judge Sean H. Lane, is facing significant delays, primarily due to Giuliani's challenges against a $148 million defamation judgment. At a recent hearing, Judge Lane expressed his concern over the slow progress and considered major changes to expedite the case. Giuliani has failed to meet deadlines for submitting required financial disclosures, and his legal team reported difficulties in obtaining necessary information from him.

The possibility of appointing a trustee to oversee the case or dismissing it entirely was discussed by creditors’ lawyers. Additionally, Giuliani's focus on appealing the defamation judgment—related to false accusations made against two Georgia poll workers—has hindered advancements in other aspects of his bankruptcy proceedings. This focus on the appeal has also been criticized for potentially causing indefinite delays. The financial strain is evident as Giuliani has not made moves to sell his properties or settle the defamation judgment, which prompted his Chapter 11 filing. 

The situation is further complicated by recent derogatory remarks Giuliani made on his radio show, resulting in his suspension. Concerns about the case’s stagnation were also voiced by the Justice Department’s bankruptcy watchdog, indicating minimal reorganizational activity. The judge has yet to make a decision regarding Giuliani's request to hire special litigation counsel, given the lack of progress on the appeal.

Giuliani Bankruptcy Nears Turning Point as Judge Rues Slow Pace


Landlords in the commercial real estate sector are bracing for further challenges as an increasing number of retailers file for bankruptcy amidst persistent economic difficulties. The recent Chapter 11 filings by companies such as teen clothing retailer rue21, Express Inc., and Joann Inc. are indicative of the broader issues facing retailers, including high inflation and rising interest rates. While companies like rue21 are opting for liquidation, others like Express are using bankruptcy proceedings to shed unprofitable leases and attempt a turnaround.

Bankruptcy laws enable retailers to terminate leases relatively inexpensively, which has become a critical tool for distressed businesses looking to streamline operations. This trend has led to landlords frequently engaging in bankruptcy cases, with larger landlords often having more influence and even purchasing companies out of bankruptcy to maintain continuity in mall spaces.

The economic backdrop for these bankruptcies includes the lingering effects of the Covid-19 pandemic, which initially pushed retailers like J.C. Penney and Neiman Marcus into bankruptcy in 2020. Current economic pressures such as inflation and higher interest rates have exacerbated the situation, making it difficult for retailers to pass increased costs onto consumers who are also feeling the financial pinch.

For instance, rue21 has been particularly impacted, with its core customer base facing significant financial stress due to inflation. Joann has struggled with increased costs from tariffs on Chinese imports and rising interest expenses, which have doubled in the past two years due to higher interest rates. These challenges are prompting concerns that more businesses may face bankruptcy as the benefits of previous federal aid diminish and the costs of refinancing grow under the current economic conditions.

Retail Bankruptcies Pose Pain for Landlords as Headwinds Persist


In Delaware, the corporate legal community is divided over a proposed legislative response to a court decision that challenged long-standing corporate strategies involving stockholder agreements. This legislative move, viewed by some as an overreaction, aims to counteract a February ruling by Vice Chancellor J. Travis Laster, which curtailed the powers granted to founders and certain investors through stockholder agreements in corporate governance. Critics argue that the rush to amend the law could undermine legal coherence and bypass the appellate process, potentially leading to a loss of confidence in Delaware as a prime jurisdiction for corporate charters.

Meanwhile, Elon Musk has been ordered by a U.S. federal court to provide further testimony in the Securities and Exchange Commission's investigation into his acquisition of Twitter. The investigation examines whether Musk violated federal securities laws during his takeover of the social media company. This court decision continues a longstanding conflict between Musk and the SEC, which includes previous disputes over Musk's communications about his business ventures. The SEC's ongoing scrutiny of Musk's actions reflects its role in overseeing transparency and legality in corporate executives' maneuvers in the securities markets.

Elon Musk ordered to testify again in US SEC probe of Twitter takeover | Reuters

Move to Change Delaware Law After Musk Attacks Called Knee-Jerk


During the hush money trial of former President Donald Trump, his former fixer Michael Cohen was subjected to intense scrutiny by Trump's defense attorneys. They aimed to discredit his testimony, highlighting his transformation from a staunch Trump supporter to a harsh critic, and questioning his motivations, suggesting they were driven by financial gain and revenge. 

Cohen, having already testified for approximately nine hours, claimed that Trump had directed him to pay adult film star Stormy Daniels to prevent her from disclosing an alleged encounter that could harm his 2016 presidential campaign. Trump's lawyers did not focus on the $130,000 payment directly but instead on Cohen's credibility, citing his previous prison sentence for related offenses and his admitted history of lying under oath.

During his testimony, Cohen highlighted several key points:

  1. Cohen claimed that Trump had given him the green light to proceed with the payment to Daniels, emphasizing that Trump saw the $130,000 as trivial compared to his wealth, and urged Cohen to just make the payment.

  2. Cohen depicted the payment as a crisis for Trump’s 2016 campaign, asserting that Trump believed the disclosure of Daniels' story would be disastrous, particularly because he was already polling poorly with women voters.

  3. In discussions about how the payment might affect his marriage, Trump indicated to Cohen that he was not concerned about the potential impact on his relationship with Melania Trump, suggesting his focus was solely on the electoral implications.

  4. Prosecutors played a recording where Trump can be heard discussing the payment method for a related silence agreement involving Playboy model Karen McDougal, which supports allegations of a "catch and kill" strategy used to suppress damaging stories during the campaign.

  5. Cohen also recounted a meeting with Trump at the White House where Trump reassured him about the financial arrangements for covering the payment to Daniels.

The trial, which has been ongoing since April 15, saw Cohen as the prosecution's final witness, with his cross-examination set to continue. The defense presented evidence of Cohen's financial endeavors post-allegations, including profits from memoirs and a podcast critical of Trump, as well as Trump-themed merchandise he sold online. The case hinges on accusations that Trump falsified business records to disguise reimbursements to Cohen for the hush money as legal fees, contributing to the 34 counts he faces. 

Trump, who has pleaded not guilty, denies any encounter with Daniels and claims the case is politically motivated. The trial also includes a backdrop of Trump defending Cohen publicly, even as federal investigations closed in, which Cohen described as part of a "pressure campaign" to keep him aligned with Trump. This case is one of several legal challenges Trump faces, with others involving allegations of trying to overturn the 2020 election results and mishandling classified documents.

Trump's lawyers assail estranged fixer Michael Cohen's credibility at hush money trial | Reuters

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Minimum Competence - Daily Legal News Podcast
Minimum Competence
The idea is that this podcast can accompany you on your commute home and will render you minimally competent on the major legal news stories of the day. The transcript is available in the form of a newsletter at www.minimumcomp.com.