471 B.R. 342
Bankr. S.D.N.Y.2012Background
- Liquidators of Bermuda-domiciled funds seek to compel BCP to produce documents under 11 U.S.C. § 1521(a)(4) and Rule 2004.
- BCP opposes and also moves to vacate this Court's recognition of the Bermuda proceedings as a foreign main/nonmain proceeding.
- Recognition of Bermuda proceeding was granted on September 19, 2011; BCP challenged that order on appeal.
- Liquidators seek documents specifically: all documents concerning the Funds provided to the SEC by BCP.
- BCP contends discovery is (a) outside § 1521(a)(4), (b) lacks U.S. nexus, (c) relates to pending UK arbitration, (d) barred by the Stored Communications Act, and (e) irrelevant because recognition should be vacated.
- Court grants motion to compel production of the SEC-related documents and denies BCP's vacatur motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1521(a)(4) permits discovery of SEC documents about the Funds. | Liquidators claim § 1521(a)(4) authorizes broad discovery of debtor affairs/assets. | BCP contends discovery exceeds § 1521(a)(4) scope and relates to UK arbitration. | Yes; § 1521(a)(4) authorizes the requested discovery. |
| Whether discovery requires a nexus with U.S. assets. | Discovery concerns the debtor's assets/affairs, even if assets abroad. | Discovery lacks nexus to U.S. property or assets. | Nexus not required; ancillary proceeding seeks broader discovery. |
| Whether the Stored Communications Act bars discovery in this context. | Not addressed; discovery permissible in court proceedings. | SCA/privacy provisions bar production. | No; SCA does not bar court-ordered discovery here. |
Key Cases Cited
- In re Kane, 628 F.3d 631 (3d Cir. 2010) (property includes contingent claims; supports asset-related discovery)
- Prudential Lines, Inc., 170 B.R. 222 (S.D.N.Y. 1994) (appeal pending; court may implement/enforce order without interferin with appeal)
- In re Gee, 53 B.R. 891 (Bankr.S.D.N.Y. 1985) (foreign liquidator discovery to locate assets)
- In re Fairfield Sentry Ltd. Litigation, 458 B.R. 665 (S.D.N.Y. 2011) (§ 1521(a)(4) allows discovery in the U.S. even absent U.S. assets)
- In re Enron Corp., 281 B.R. 836 (Bankr.S.D.N.Y. 2002) (pending proceeding rule applies to discovery)