BOOK REVIEW : Chapter and Verse of Bankruptcy

A Feast for Lawyers, Inside Chapter 11: An Expose by Sol Stein (M. Evans & Co.: $18.95, 341 pps.)

Failure is the unspeakable sin of American life. So we should not be surprised when the founder of a failed company desperately seeks to fix the blame on some vile and malicious bogyman. For Sol Stein, a publisher who filed for protection under Chapter 11 of the bankruptcy laws in 1987, the archvillains are the attorneys. Is anyone surprised yet?

In “A Feast for Lawyers,” Stein kicks the living daylights out of the legal profession while depicting himself and his company as victims of “psychological torture” and “orchestrated humiliation” inflicted by “human scavengers” and “vulture capitalists” in proceedings that he variously likens to a “six-ring circus,” “the Mad Hatter’s Tea Party,” “Franz Kafka’s The Trial ,” “George Orwell’s Animal Farm “ and “the Black Hole of Calcutta.”

Stein is an accomplished novelist and playwright. With his wife, Patricia Day, he co-founded the independent publishing house of Stein & Day. After a quarter-century, the company was caught up in an unremarkable cash-flow crisis that sent it tumbling into bankruptcy. Stein hoped that Chapter 11 would allow Stein & Day to “reorganize,” pay its debts, and continue to publish. He quickly learned that his hopes were futile and that his company was doomed. “A Feast for Lawyers” is Stein’s bloody revenge.

“Bankruptcy specialists can thrive on keeping their clients sick for a long time and when representing a debtor can collect substantial fees while their clients lose money,” Stein writes. “Alas, the milkers at the bankruptcy bar not only may constitute a majority but sometimes, tragically, are the only ones available, and their advice to the client may be tainted by their primary motive: greed.”

As a practicing attorney, I hasten to concede that Stein is absolutely right about many of the horrors of our legal system:It is ponderous, wasteful, expensive, often unjust and sometimes outrightly nonsensical. Although Stein never saw the inside of a workhouse or a debtor’s prison, he fairly depicts the bankruptcy process as something faintly Dickensian--the costly but pointless legal skirmishing, the ham-handed intervention by lawyers and judges who know little about running a business.

Still, “A Feast for Lawyers” is so overwrought, so mangled by its own deep passions, that Stein tends to defeat himself by sheer rhetorical overkill. He starts out by likening himself to “a survivor” of “the rehabilitation camps,” as if the ordeal of bankruptcy is the moral equivalent of the Holocaust or the Gulag. He is reflexively vicious toward all but a handful of lawyers, as when he pauses in his tirade to vilify an unnamed attorney “from a distinguished and well-known firm who sneezes into his palm just before shaking hands.” And he blames the predicament of his company on predatory lenders and “malicious trade creditors who become obsessed with hurting the debtor rather than getting their money back.”

Indeed, Stein seems to inhabit a world populated with a few good guys and a lot of very bad guys. He lionizes “a minority of ethical professionals,” including one bankruptcy lawyer who conveniently bears the name Angel, and he flatly condemns the rest of the profession as “a cabal dominated by the second-raters. . .setting themselves up to milk the case and the company, unprepared by disposition or talent to put the businessman’s case before the court,” a gang of mediocrities who “abuse their language daily and know little of the humanities that once characterized a person as civilized.”

At the heart of Stein’s ordeal was the loss of autonomy that matters so much to the entrepreneur. Stein explains that “an entrepreneur, almost by definition, is a person who believes he has a money-making idea in his grasp and runs with it.” But “if he runs too fast, if his need for capital outstrips his resources”--that is, if he fails at his business--the runner finds himself hobbled by the law. Stein was literally sickened at seeing his company at the mercy of creditors and lawyers whom he characterizes straightforwardly as “enemies.”

“This isn’t the hell of owing money,” Stein explains of himself and other owners of bankrupt businesses. “It is the hell of losing control, not only over their businesses but their lives.”

Stein is capable of writing with gut-punching candor about the cold and sometimes cruel realities of the book business and the bankruptcy laws. Indeed, anyone who loves books will be heartbroken at how the creditors of Stein and Day cast its books and authors--the real assets of a publishing company--into a kind of limbo that profited no one and ultimately destroyed a distinguished publishing house. And Stein’s book may well succeed in its self-described function as “a cautionary tale” for entrepreneurs and executives who are facing bankruptcy.