Bankruptcy Litigation Committee
ABI Committee News
Volume 6, Number 1/ January 2009
In This Issue
The Emergence of E-Discovery in Bankruptcy
by: Stephanie Giammarco
BDO Consulting; New York
Marlene Rabinowitz-Mazzeo [1]
BDO Consulting; New York
Bankruptcy courts are not immune to electronic discovery disputes. Professionals serving clients involved in bankruptcy litigation would be well-advised to understand the legal and practical implications that the preservation, collection, analysis and production of electronically stored information (ESI) has on the discovery process.
The Availability and Application of Civil Sanctions in Bankruptcy Court
by: Jeffrey A. Carlino
Goldberg Segalla LLP; Buffalo, N.Y.
The Bankruptcy Code allows judges to impose civil sanctions. A number of recent decisions have addressed (1) when civil sanctions are authorized, (2) who has standing to seek civil sanctions and (3) the applicable burden of proof. These decisions have created contrasting rules of law among districts.
The source of bankruptcy court authority to impose civil sanctions was considered in the case in In re Rivera, 369 B.R. 193 (Bankr. D. N.J. 2007). In Rivera, the bankruptcy court sua sponte confronted a mortgage lender found to have been prosecuting foreclosure actions with certification practices that fell short of the requirements of local and other applicable rules and orders, including Bankruptcy Rule 9011. The court initially issued what it considered to be a nonmonetary sanction: An injunction to the lender that also prospectively admonished all those who practice in that court from using noncomplying certification practices. Essentially, the “prospective directive” compelled litigants to obey the various rules governing certification, and warned of consequences upon the failure to do so.
So Who’s An Expert Anyway?
by: Steven Jay Katzman
Bienert, Miller, Weitzel & Katzman; San Clemente, Calif.
Luis A. Feldstein
Bienert, Miller, Weitzel & Katzman; San Clemente, Calif.
Imagine yourself representing former insiders of a chapter 11 debtor in an adversary proceeding charging your clients with breach of fiduciary duties. In an affidavit, a certified turnaround professional hired postpetition testifies as to the financial affairs of the debtor and the role of your clients in the debtor’s operations, going so far as to opine that your clients “heedlessly exposed the debtor to unwarranted risk” and were guilty of a “complete lack of credit-risk assessment in connection with the debtor’s business operations.” The witness adds a few adjective-laden references to your clients’ “exorbitant salaries” and their “completely irrational” business decisions.