On May 8, 2017, the U.S. Bankruptcy Court for the Middle District of Florida entered an order compelling production of attorney-client communications between Regions Bank and its counsel, finding that Regions had put those communications “at issue” by raising a good faith affirmative defense under 11 U.S.C. § 548(c) in response to a fraudulent transfer claim brought against it. Welch v. Regions Bank (In re Mongelluzzi), No. 8:14-ap-00653-CED (Bankr. M.D. Fla. May 8, 2017), ECF No. 319 (Delano, J.) (herein Mongelluzzi).

On May 8, 2017, Judge Gross ruled on a Motion to Compel Production of Documents in the Haggen bankruptcy. Judge Gross’ opinion (the “Opinion”) addresses the conflict when a party is acting on another’s behalf and that entity claims “the oldest of the common law privileges”. Opinion at *5. A copy of the Opinion is available here.

Addressing a novel issue in In re: International Oil Trading Company, LLC, 548 B.R. 825 (Bankr. S.D. Fla. 2016), the United States Bankruptcy Court for the Southern District of Florida recently denied in part an involuntary debtor’s motion to compel production of communications between the judgment creditor who had filed the involuntary bankruptcy petition and the petitioner’s litigation funder. The Court found that the attorney-client privilege and work product protection were applicable to certain disclosures made to the litigation funder, a non-lawyer third-party.

We admit, discovery disputes rarely make for titillating blog posts. But a letter ruling issued towards the end of last year by Judge Shannon in Longview Power, LLC et al. v. First American Title Insurance Co. recently caught our eye.

Bankruptcy Court Holds Attorney's Signature on Proof of Claim Form Renders Attorney a Fact Witness to Allegations in Proof of Claim, Waiving Attorney-Client and Work-Product Privileges

As electronic discovery has become more prevalent and voluminous, national standards for the preservation of evidence have evolved dramatically in the past decade. Through a proliferation of electronic discovery orders involving discovery compliance, courts have addressed when the duty to preserve evidence arises, signifying a party’s duty to issue a “litigation hold.” Courts have not answered, however, whether a party can withhold documents generated before issuing a litigation hold on the basis of work product protection.

In a suit between a bankruptcy trust established to resolve a defunct corporation’s asbestos-related personal injury liabilities and the corporation’s excess liability insurer that had denied coverage to the trust in connection with the asbestos claims, a court resolved various attorney client privilege and work product protection issues. The insurer had sought various documents related to the handling of the underlying asbestos claims by the trust, among others.

The "common interest" doctrine allows attorneys representing different clients with aligned legal interests to share information and documents without waiving the work-product doctrine or attorney-client privilege. Issues involving the common-interest doctrine often arise during the course of a business restructuring, because restructurings tend to involve various constituencies, including the company, the official committee of unsecured creditors, secured debt holders, other creditors, and equity holders whose legal interests may be aligned at any one time.

In re Leslie Controls, Inc., (Bankr. D. Del., Case No. 10-12199, 2010)

CASE SNAPSHOT

In another instalment of the Scottish Lion saga (see our previous blog entries here, here and here) the Outer House of the Court of Session (the Scottish First Instance Court) has ruled that where a scheme creditor submits documents in support of his claim fo