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When Judge Prudence C. Beatty walked into her courtroom, she turned to glare at the standing-room-only crowd assembled for a hearing on Delta Air Lines’ bankruptcy reorganization. She sat down and began lambasting the more than 100 lawyers involved in the case. “A lot of these papers are very wordy,” she said. “They repeat over and over again what the point was. And don’t put the whole caption at the beginning of the paragraph. I don’t want to read it twice. If I’m reading something three times in a row, I don’t know if I read it three times in a row or if I fell asleep.” So it went for three hours on Thursday — and may go for the duration of Delta’s layover in Chapter 11 — as Beatty interrupted, critiqued and scolded her way through the first major hearing of the process. Looking through brown-rimmed glasses matching her shoulder-length hair, Beatty sometimes leaned her head on her hands in frustration and occasional boredom. Delta last month filed for protection in the U.S. Bankruptcy Court for the Southern District of New York, experts said, because it is considered to be a friendly venue for debtors. But there is one place in which those plans can backfire, if not for the company then definitely for its lawyers: tiny courtroom 701 at the top of the Alexander Hamilton Custom House, where Beatty holds court. “Lawyers don’t want to get her,” said Jonathan C. Lipson, a professor at Temple University Beasley School of Law who argued a case in front of Beatty when he was with Kirkland & Ellis. “She’s sufficiently unpredictable.” A call requesting an interview with the judge was not returned. According to the court’s public information officer, Beatty was born in 1942 and earned both her bachelor’s and law degrees from the University of Michigan. Between 1970 and 1979, she worked as an associate at what now is Whitman Breed Abbott & Morgan; Weil, Gotschal & Manges; and Krause, Hirsch and Gross. From 1980 to 1982, she was a partner at Stroock & Stroock & Lavan. In 1982, judges from the 2nd U.S. Circuit Court of Appeals tapped Beatty to fill an unexpired term on the New York bankruptcy court — making her the first woman to hold that position, according to The New York Times. DELTA COUNSEL BEARS THE BRUNT On Thursday, Davis Polk & Wardwell partner Marshall S. Huebner, the lead bankruptcy counsel for Delta, bore the brunt of Beatty’s impatience. She frequently interrupted Huebner midsentence, critiquing his logic or asking him questions he had difficulty answering. During a discussion of the number of Delta pilots who retired early in return for lump-sum payments, Huebner apologized to Beatty about the complexity of his explanation. “It’s OK,” Beatty responded. “I’m really interested to know how rich people can get flying planes.” Dean Booth, an Atlanta-based attorney with Schreeder, Wheeler & Flint who represents retired Delta pilots, made an error during the hearing but got off easy. He accidentally said, “Yes, sir,” to Beatty, correcting himself quickly with “Excuse me. Yes, ma’am.” “That’s better than calling me ‘dear’ like somebody else did,” Beatty said. In addition to Beatty’s “be brief” instructions to the lawyers at the opening of the hearing, Beatty let them know the consequences of testing her deadlines. “Let’s be clear about something,” she said. “I go to bed around midnight. If it’s really exciting, I’ll read it till 12:30. If I don’t get papers till 9:30, they’re dead meat. I’m just not reading them. If you don’t want me to read your papers, give them to me the night before.” While she urged lawyers to write and file their briefs quickly, Beatty mocked the attorney for US Bank, Kathleen M. LaManna of Shipman & Goodwin, for talking too fast. As LaManna introduced herself, Beatty blurted out gibberish apparently to describe how the lawyer sounded from the bench. LaManna apologized and slowed down. A MAJOR STEP Thursday’s hearing produced a major step in Delta’s reorganization, as Beatty approved a debtor-in-possession financing plan in which General Electric’s GE Commercial Finance and Morgan Stanley will lend Delta $1.9 billion. But Beatty postponed a decision on a motion by retired Delta pilots. They are seeking an order forcing the company to make payments to its retirement plans. Lawyers for the retired pilots were unable to explain why, among other things, the group that filed the motion, the Delta Pilots’ Pension Preservation Organization, represented only 1,800 of the more than 4,500 retired pilots. “I wish somebody would give me some information,” Beatty said. The discussion of the retired pilots’ motion became further muddled when Bruce H. Simon, an attorney with Cohen Weiss & Simon in New York, spoke on behalf of Delta’s pilots’ union. Simon told Beatty that only the union, the Air Line Pilots Association, had the authority to enforce the collective bargaining agreement, throwing into doubt whether the retired pilots could act on their own. The final item on Thursday’s agenda was a motion by Delta seeking approval of procedures for sales of de minimis assets. Beatty interrupted a presentation by Davis Polk’s Damian S. Schaible. “I don’t really have any idea what you are selling,” she said. “Napkins that have been misprinted? Liquor bottles that were unused? I don’t know that I should let you sell anything if I don’t know what they are.” Schaible and his colleagues at Davis Polk were able to identify some of the items Delta wished to peddle, such as office equipment, baggage-moving equipment, airplane tugs and real estate Delta had used for ticketing offices. When Schaible mentioned spare airplane parts, Beatty said she was concerned that an unnamed source told her that Delta was selling parts of its airplanes after putting them into paper bags. Schaible attempted to address that concern, but Beatty wasn’t satisfied. “If I was going to talk about what you wanted me to talk about, I would have already talked about it,” she said. While some attorneys may dread practicing in front of Beatty, their clients — the companies in bankruptcy — may benefit, said Lipson, the Temple law professor. “Judge Beatty is a very independent thinker,” Lipson said. “She’s not going to presume the debtors’ management and what they want to do is the best thing to do. But she may well end up agreeing with what they want to do. “A lot of bankruptcy judges, you knew where they were coming from,” Lipson said. “I don’t think that’s the case with Judge Beatty.”

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