| Litigation in bankruptcy can be highly contentious, and attorneys often believe that the normal rules in federal district court governing depositions do not apply to a Rule 2004 examination of a debtor. But do those attorneys have it wrong in an adversary proceeding or contested matter? Rule 2004 exams are not always as broad as interested parties hope.
Rule 2004 exams are often used as a fishing expedition into the debtor’s acts, conduct, property, liabilities and financial condition. Some of the limitations on the scope of discovery in the Federal Rules of Civil Procedure do not apply. But bankruptcy attorneys conducting an exam often forget (or ignore) that Rule 2004 exams are subject to far more scrutiny in certain situations. Specifically, when a Rule 2004 exam is set while an adversary proceeding or a contested matter is pending, the exam will be subject to the “pending procedure rule” and the discovery limitations in the Federal Rules of Civil Procedure will apply.
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