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May 2000
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MIS@ Fennemore Craig

Internet Site Keeps Creditors Current

Lead counsel create a Web site and listserv to handle communication in a complex suit.

By Dean Seiveno

IN DECEMBER 1999, the Baptist Foundation of Arizona Inc. filed for bankruptcy under Chapter 11. Fennemore Craig was selected to represent and advise the court-appointed, 14-member Official Unsecured Creditors' Committee on all matters in the bankruptcy cases.

Fennemore Craig, founded 115 years ago in Phoenix, has approximately 135 attorneys in Phoenix, Tucson and Nogales. We support approximately 320 stations, spread across the three offices. We use Microsoft Windows 95/98/NT; Novell NetWare; Microsoft's Office, Exchange and Outlook; Docs Open; RightFAX; DTE (Distributed Time Entry); and Versys Legal Insight Legal Accounting System. Our computers and laptops are from Micron Electronics and range from Pentium 133-450 MHz. Compaq supplies all of the equipment for our servers.

The Baptist Foundation of Arizona Inc. filed for Chapter 11 bankruptcy protection in November, 1999, listing total liabilities of $640 million, of which $590 million is owed to about 13,000 investors, mostly elderly Christians who had invested their personal funds and IRA accounts. At the time of filing, the foundation listed assets of $160 million to $200 million.

The case has attracted media attention, including a lengthy article in the Dec. 6, 1999 edition of Newsweek. The foundation is connected to the Southern Baptist convention, the largest Protestant denomonination in the U.S., it reported. Earlier last year, state regulators forced the nonprofit to freeze its assets. Until the late 1980s, the BFA had managed church building funds and retirement funds. Profits came from land investments in the red-hot Arizona market. But when the property values tanked, so did the BFA investments, explained Newsweek.

Periodic Updates

Cathy Reece, lead counsel on the Baptist Foundation case and chair of Fennemore Craig's Bankruptcy and Creditors' Rights Group, quickly identified the need to deliver periodic updates to the approximately 13,000 creditors affected by the bankruptcy. Traditional methods of distributing the information to such a large number of creditors was cost-prohibitive. We needed to find a method of distributing updates to creditors that was efficient, cost-effective and fast. The firm faced real constraints in terms of time and resources in which to produce and deliver updates in a timely manner.

The situation called for a communication tool that was simple, flexible and dynamic with the ability to bring together all of the official bankruptcy-related information for creditors to review. It was also critical to distinguish the official updates and bankruptcy information from other unofficial Web sites appearing on the Web which did not contain complete or accurate information about the bankruptcy.

Based on the situation, the firm proposed to add an "Official Committee" page to its existing Web site located at www.fennemorecraig.com.

By adding content to Fennemore Craig's existing Web site, the firm was able to cost-effectively make updates immediately available to creditors who needed to have the information.

The Web site is hosted by US West !interact, which has the necessary people, hardware and communications systems in place to handle an immediate increase in Web traffic.

If the site were hosted locally, we would have had concerns about the performance and availability of the site, if traffic exceeded our capability. Adding an additional page to the site would not result in any additional costs, and could be easily updated and maintained by in-house IS staff.

The approval process was simple. It began with the firm's management committee. The members reviewed the general appearance and proposed purpose of the page.

Next, the concept was presented to the Official Secured Creditors' Committee, and the U.S. Trustee's Office, to confirm that they were comfortable with posting the information online. Finally, the page was presented to the presiding judge, as a professional courtesy. Because Reece is the lead counsel on the case, she makes the final decision about releasing information. Updates to the site need not go through an approval process, because they are written by Reece.

The establishment of the official committee updates on the firm's Web page was approved by the presiding bankruptcy judge and the United States Trustee in early January 2000. Fennemore Craig's internal management committee also approved the project and construction began on the style, presentation, and content of the page.

Much consideration was given to the fact that some creditors may not have easy Internet access, and might not have a computer, or may only have access to e-mail, or WebTV in some cases.

The goal was to provide the update to as many of the creditors as possible and expect that the information would be further shared among those who did not have access to a computer.

FrontPage 2000

Reece, Heide Rose (the firm's director of marketing) and I created the site. We used Microsoft FrontPage 2000, Paintshop Pro, and one of the existing Web site pages as a template for designing the new page.

Links from the Fennemore Craig home page were added to direct creditors to the committee page.

Initially, the updates were to be in Adobe Acrobat format only, but it quickly became apparent that a generic text or html version of the same information was needed for those creditors who may not have the ability to download and use this format. We use Adobe Acrobat as the primary document type for distributing information.

Links to free viewer software for the Adobe Acrobat and MS Word document types are included for visitors to the site who wish to view, download, or print forms that could not be reproduced in a text-only format.

In addition to the Web site, we created a private mailing list (listserv) using a free service called ListBot, which available on the Internet. Creditors who visit the official committee page can subscribe or unsubscribe from the mailing list at any time. When updates are posted to the page they are also sent to all of the current subscribers of the committee list in a text-only format which does not require any additional software to view. Using the free ListBot service eliminated the need for someone within the firm to dedicate his/her time and resources to manage the list for the duration of the project.

The site also includes a link to the Bankruptcy Court docket, which allows creditors to check and review documents and pleadings filed with the court. Creditors who need more information can click on "Questions?" and send an e-mail directly to counsel Reece for a response (with the official committee co-chair Steve Culp copied on the e-mail message).

The results have been better than we imagined. The firm and the committee have been able to distribute the "Official Committee Updates" to the majority of the creditors without incurring dramatic additional costs in time or resources to the firm or the committee.

The success of this project has prompted other practice areas to consider using the Web in similar ways to better serve the clients and the firm.

Dean Seiveno is the IS director for Fennemore Craig in Phoenix.

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