492 B.R. 162
Bankr. S.D.N.Y.2013Background
- The court denies a joint motion to seal documents in four adversary proceedings, ruling that § 107(b) does not authorize wholesale sealing.
- Jurisdiction is asserted under 28 U.S.C. § 1334(a), § 157(a), and the Amended Standing Order; the matter is a core bankruptcy proceeding.
- Debtor filed a chapter 7 petition on March 15, 2010; the estate consists of a large group of operating subsidiaries with global real estate investments.
- Subsequent Rule 2004 and stipulations in 2012 governed production of confidential materials and sealed treatment of proceedings pending settlement discussions.
- Trustee sought sealing for 30 years for the Adversary Complaints and Settlement Agreement; no opposition was filed by the defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 107(b) permits sealing in this context | Movants argue 107(b) protects confidential commercial information requiring sealing. | Defendants contend public access is fundamental and sealing would improperly hide matters. | Seal denied; public access preserved; redaction possible later. |
| Whether § 107(b)(2) (scandalous) justifies sealing | Movants claim allegations are scandalous and would cause reputational harm. | Defendants assert the statements are scandalous and warrant protection. | Not established; no compelling, scandalous or defamatory showing. |
| Whether redaction is preferable to sealing | Sealing entire documents is unnecessary; confidential information can be redacted. | Sealing is necessary to protect confidentiality and avoid prejudice. | Redaction is preferred; wholesale sealing denied; line-by-line redaction hearing warranted. |
| Effect of confidentiality agreements on § 107 analysis | Confidentiality stipulations should shield disclosures. | Agreements do not override § 107; must still meet 107 standards and redaction can suffice. | Agreements do not create an independent sealing basis; sealing denied with redaction option. |
Key Cases Cited
- Nixon v. Warner Communications, Inc., 435 U.S. 589 (U.S. Supreme Court 1978) (general right to inspect public records; exceptions may apply)
- In re Orion Pictures Corp., 21 F.3d 24 (2d Cir. 1994) (§ 107(b) exceptions apply when confidential information is shown)
- United States v. Amodeo, 71 F.3d 1044 (2d Cir. 1995) (public access principles; separation of confidential material from public records)
- World Trade Center Prop.’s, LLC v. United Airlines, Inc., 723 F. Supp. 2d 526 (S.D.N.Y. 2010) (public policy and confidentiality considerations in 107 analyses)