Outside Counsel

 The collapse of Signature Bank reminds me that I have a story about - or at least involving- that institution. Some years back we represented a family that was involved in a bus accident. As I recall there were two parents and two children. They had arrived in New York and were taking the bus to Canada where they were immigrating. They were observant Muslims, which becomes relevant. The injuries were not particularly severe, and the liability was obvious, so in due course we were able to negotiate a settlement. In New York, as in most places, tort settlements involving children must be approved by the court, and must be placed in a trust that cannot be accessed until the child turns 18. There are several ways to handle the trust: frequently the money is deposited in an account at a savings bank with the bank as trustee, but it is also possible to set up other sorts of accounts. In this instance the father objected to the savings bank concept because under Sharia law the payment of interest is generally prohibited. There are, however, workarounds, and after doing some legwork we were able to come up with a solution that satisfied our client's religious objections while also- we thought- likely to satisfy the Court that the settlement was in the best interests of the children, which is the legal standard we are held to in these cases. 

It was a bit of a production scheduling the Infant's Compromise hearing, which was venued in Brooklyn, because our clients' immigration status complicated their re-entry into the US, but we managed that and appeared before a judge who I will not name. I'd had history with this judge, who was generally a nasty piece of work, but this didn't seem to be the sort of thing where we'd have a problem. I met with the clients, went over the terms of the settlement, and then waited in the courtroom for the case to be called. At that point the judge did something I have never seen before: he started questioning the father directly about the trust we'd set up. Now, as it happens the terms of the trust were much more favorable to the children than what they could have received from a savings bank, and, as I have said, they satisfied the religious principles that were important to my clients. "Do you understand that if the trustee goes out of business, or goes bankrupt, that you will have no way to recover your money for your children?" he asked. "I am not sure about this settlement. Wouldn't you rather have this money in an account that is insured by the United States government?" This line continued for about 15 minutes. I tried to explain the situation, but the judge was having none of it. In the end my client, recogognizing that this authority figure was telling him to do something, acquiesced, and I found myself walking across the street to set up two infant's accounts with Signature Bank. 

// posted by Bill @ 2:04 PM