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462 B.R. 88
Bankr. D. Del.
2011
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Background

  • Garlock Sealing Technologies moved for access to Rule 2019 statements and to intervene in ten bankruptcy cases listed, most of which are closed.
  • Garlock also moved to reopen the closed cases, asserting it has standing as an interested party and that access would aid its own asbestos liability estimation.
  • The court analyzes Article III standing and prudential standing, finding Garlock is not a party or party in interest in these cases and has not shown a concrete injury.
  • Garlock’s asserted injury is speculative, involving purported concealed exposure information and potential future RICO claims, but no creditor status or identifiable harmed party is shown.
  • Even if injury existed, access to 2019 statements would not redress the asserted harm because 2019 statements are attorney representations, not claims or ballots, and Garlock has not identified a creditor in its own case needing relief.
  • The court also finds Garlock’s purpose improper (private, broad discovery) and emphasizes Rule 2019’s purpose to regulate representation, not to serve as public discovery in unrelated cases; it cites Kaiser Aluminum, Pittsburgh Corning, Alterra and related authority.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Garlock has standing to intervene Garlock is a party in interest due to its own bankruptcy case and tort liability history. Garlock is not a party or party in interest in these cases and has no concrete injury. Garlock lacks standing to intervene.
Redressability of Garlock's alleged injury from access to 2019 statements Access will reveal concealed exposure evidence to support its RICO/claims strategy. Access to 2019 statements would not redress any harm because statements are attorney representations, not claims or ballots. No redressability; access would not remedy any injury.
Garlock's prudential standing Garlock's private interests fall within the zone of interests affected by Rule 2019 disclosures. Garlock's interests are too marginal and not within the intended zone; the request is generalized and improper. Garlock lacks prudential standing.
Should cases be reopened or 2019 access be granted Reopening and access are needed to test alleged misstatements and protect its interests. Reopening would be enormously burdensome; Garlock waited years and never sought access timely; access is inappropriate absent identified creditors. Motions to reopen and for access denied.

Key Cases Cited

  • PA Prison Soc’y v. Cortes, 629 F.3d 146 (3d Cir.2010) (standing requires concrete injury; injury must be personally experienced)
  • Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167 (U.S. Supreme Court 2000) (injury must be concrete and particularized)
  • Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. Supreme Court 1992) (standing elements explained)
  • Freeman v. Corzine, 629 F.3d 146 (3d Cir.2010) (zone-of-interests test for prudential standing)
  • In re Kaiser Aluminum Corp., 327 B.R. 554 (D. Del.2005) (Rule 2019; access balanced with privacy interests)
  • Baron & Budd, P.C. v. Unsecured Asbestos Claimants Committee, 321 B.R. 147 (D.N.J.2005) (Rule 2019 disclosures and representation considerations)
  • In re Pittsburgh Corning Corp., 260 Fed.Appx. 463 (3d Cir.2008) (access issues and illustrative denial without prejudice)
  • In re Cendant Corp., 260 F.3d 183 (3d Cir.2001) (public access and sealed information; importance to admin of case)
  • Alterra Healthcare Corp., 353 B.R. 66 (Bankr. D. Del.2006) (confidential settlements; §107(c) privacy considerations)
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Case Details

Case Name: In Re ACandS, Inc.
Court Name: United States Bankruptcy Court, D. Delaware
Date Published: Oct 7, 2011
Citations: 462 B.R. 88; 2011 WL 4801527; 16-10722
Docket Number: 16-10722
Court Abbreviation: Bankr. D. Del.
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    In Re ACandS, Inc., 462 B.R. 88