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Appealing cases: Judge Robert D. Martin '66

  Mary Boone  

Bankruptcy and commercial law have long been interests of Robert D. Martin ’66.

After earning his juris doctorate from the University of Chicago, he went to work for a firm in Madison, Wis. As the least senior attorney he was often assigned to represent clients in bankruptcy hearings. While many of his colleagues steered clear of this type of law, Martin really enjoyed it. He attended seminars and wo rkshops to build on his foundation in contract and commercial law.

In 1978, he was appointed Chief U.S. Bankruptcy Judge for the estern District of Wisconsin. He also serves extensively by designation to the bankruptcy courts in the Northern Districts of Iowa and Illinois. He is former president of the National Conference of Bankruptcy Judges, a conferee in the National Bankruptcy Conference, and a member of the Board of Directors of the Turnaround Management Association.

Judge Martin is co-author of Ginsberg & Martin on Bankruptcy (Aspen Law & Business, 2000) with the Hon. Robert E. Ginsberg; Secured Transactions Handbook for Wisconsin Lawyers and Lenders (University of Wisconsin Law School, 1990) with the Hon. John K. Pearson; and a contributing author to Norton Bankruptcy Law and Practice and Norton Bankruptcy Law Advisor.

He’s taught at the University of Wisconsin Law School, has been a faculty member of the Federal Judicial Center School for Newly Appointed Judges, and lectures on bankruptcy and commercial law topics.

Judge Martin and his wife, Ruth Haberma Martin ’66, have three sons, Jacob, Matthew, and David, and are expecting their first grandchild in September. A former Cornell football center, Judge Martin now enjoys playing golf and tennis.

The Case: Tak Communications Inc. and
Tak Broadcasting Corp., Debtor

Tak Communications and Tak Broadcasting Corp.—collectively known as Tak—owned and operated several television and radio stations prior to Jan. 3, 1991, when it filed Chapter 11 bankruptcy.

On Nov. 10, 1992, a committee of creditors and lenders filed a joint plan of reorganization that called for Tak’s Federal Communications Commission (FCC) license to be transferred to a single, reorganized debtor. In January 1993, the court approved Tak’s reorganization plan and Michael Eskridge began serving as the company’s operating agent. He worked several months with out a formal employment agreement.

In July 1993, Tak filed a formal agreement with Eskridge. The agreement specified that Tak would employ Eskridge for a maximum of three years. Eskridge’s salary was set at $275,000 per year for his first 18 months and he could earn bonuses based on Tak’s financial performance. If Eskridge should be terminated without cause, Tak would be obligated to pay him his salary for 12 months or the remainder of his employment term, a pro rata amount of his bonus for the current fiscal year, and to continue to provide his insurance coverage.

However, the FCC did not approve the license transfer to the reorganized debtor. On Jan. 7, 1994, Tak’s creditors asked the court to extend the deadline for its license transfer. The motion was denied and Tak returned to bankruptcy mode. Eskridge was removed from his position as a corporate officer but continued to be employed by Tak, receiving the same $275,000 annual salary. Then, in April 1994, Tak sent a letter to Eskridge ending his employment with out cause. Eskridge asked for the benefits outlined by his employment agreement. Tak offered to make only those severance payments it usually gave other employees.

Eskridge filed suit, seeking the payment of benefits totaling $ 620,042 plus interest. His calculations were based on one year’s salary at $275,000, one year of supplemental insurance benefits at $51,600, unused vacation at $25,442, a bonus for 1993 at $200,000, and a pro rata bonus for 1994 at $67,000.

Judge Martin ruled that the voiding f Tak’s reorganization plan did not void Eskridge’s agreement with Tak.

He awarded Eskridge $326,000 plus 9 percent interest from April 1994 to July 2002 for the salary and supplemental benefits portion f his claim, and $55,000 plus 9 percent interest on bonus amounts—significantly lower than Eskridge had asked for because Tak did not meet its financial goals. Martin’s opinion did not include payment for vacation because there was no evidence of time earned or taken.

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