Mr Cooper Group Inc fka COOP

[GO4AWILDRIDE]

Another KCCLLC posting

Looks like TPS is trying to aid the EC!

THE TPS CONSORTIUM’S: (A) SUPPLEMENTAL SUBMISSION IN FURTHERANCE
OF ITS MOTION TO COMPEL DEBTORS’ PRODUCTION OF DOCUMENTS; AND
(B) OBJECTION TO THE DEBTORS’ MOTION TO
IMPOSE DISCOVERY LIMITATIONS AND PROCEDURES

The consortium of holders of interests subject to treatment under Class 19 of the Plan (as
defined herein) (the “TPS Consortium”1), by and through its undersigned counsel, hereby: (a)
submits this supplementation in furtherance of its previously-filed motion to compel the Debtors’
production of documents (the “Motion to Compel”) [Docket No. 3757] 2; and (b) objects to the
Debtors’ motion for an Order imposing discovery limitations and procedures (the “Discovery
Limitation Motion”) [Docket No. 4376].
In its Disclosure Statement, to which the TPS Consortium has objected, Debtors set forth
a proposed Plan under which Debtors plan to emerge from bankruptcy with basically no future
business activity. The keystone of the Plan is a proposed global settlement under which Debtors
have negotiated away their most significant asset, their legal claims. To the outside world the
______________________
1 The TPS Consortium is made up of holders of interests (as set forth more fully in the
group’s amended Rule 2019 statement [Docket No. 3765], as such may be amended
further) proposed by the Debtors to be treated under Class 19 of the Plan -- described in
the Plan and Disclosure Statement as the “REIT Series.”
2 By agreement of the parties, the Motion to Compel was carried to the June 3, 2010
docket.
settlement was unexpected given that it was negotiated behind closed doors, without the
participation of many parties who would purportedly be compelled to release claims under the
settlement agreement, and the result is relinquishment of most of Debtors’ significant claims in
exchange for little consideration. The upcoming confirmation will be focused almost entirely on
the terms and propriety of that “global” settlement, the negotiations of which, the various parties
in interest have been kept in the dark. Although the Debtors promised to provide the TPS
Consortium with documents responsive to their requests, the Debtors have strung the TPS
Consortium along and have continued to hide the ball. Being unable to delay any further,
Debtors have moved to truncate discovery on the primary issue at confirmation—the propriety of
the settlement, which on its face is outrageous—and even dictate the discovery that may be taken
within that shortened period. Debtors have presented no reason why the parties in interest
should be denied the opportunity to conduct full discovery as allowed by the Federal Rules of
Civil Procedure and the Rules of Bankruptcy Procedure. Nonetheless, they have asked the Court
to give them the ability to single-handedly: (a) limit discovery to areas that the parties in interest
are required to describe in advance, prior to being given any discovery; (b) determine which
documents are relevant to the blindly formulated objections of the parties in interest; and (c)
decide who can and cannot be deposed and when.
Debtors should not be allowed to continue to obstruct discovery as they have done to
date, and under no circumstance should the Debtors be given the ability to dictate to the parties
in interest what information they can see, who they can question, and on what topics. For the
foregoing reasons, and the reasons stated below, the TPS Consortium requests that this Court:
(1) compel the Debtors to produce all documents responsive to the TPS Consortium’s Document
_______________________
{D0181611.1 }3
Requests by June 15, 2010; (2) produce a full privilege log describing the recipients, subject
matter and claimed privilege, by June 15, 2010; and (3) deny the Debtors’ Discovery Limitation
Motion. Moreover, as discussed below, the TPS Consortium proposes that depositions begin the
week of June 28, 2010 and that the Court schedule a status conference regarding discovery issues
for July 8 at 10:00 a.m.
In support hereof, the TPS Consortium respectfully represents as follows:
PRELIMINARY STATEMENT
1. Notwithstanding their commitment to produce documents responsive to the TPS
Consortium’s document requests on a rolling basis, the Debtors continue to flout their
obligations as fiduciaries and the Court’s directives as to discovery practice. Because they have,
time and time again, made commitments (both on and off the record) to fulfill legitimate
discovery requests, and have repeatedly failed to make good on their promises, the TPS
Consortium is forced to seek an order from the Court to compel Debtors to produce responsive
documents.
2. Moreover, the Debtors now seek shelter from their discovery obligations and
prior discovery-related agreements through the Discovery Limitation Motion, whereby the
Debtors ask the Court to endorse a mechanism that would, for all intents and purposes, deprive
parties in interest of any meaningful opportunity to conduct discovery in connection with the
impending confirmation proceedings in these cases. As discussed herein, the “procedures” and
“deadlines” would make a charade of the confirmation process.
3. There is absolutely no reason that the normal discovery process should be
circumvented, especially when to do so would effectively eliminate the ability for the parties in
interest to conduct any real discovery related to confirmation. In support of the Discovery
{D0181611.1 }4
Limitation Motion, the Debtors would lead the Court to believe that they face something other
than the normal discovery obligations faced by a debtor-in-possession in a contested
confirmation proceeding. However, upon information and belief, as of the filing of the
Discovery Limitation Motion, only three parties were seeking discovery of the Debtors, which is
equal to the number of law firms the Debtors employed. Certainly, the discovery obligations
faced by the Debtors could be managed easily by even just one of: (a) Weil Gotshal & Manges,
LLP; (b) Quinn Emanuel Urquhart Oliver & Hedges, LLP; or (c) Richards, Layton & Finger,
P.A. That the Debtors have at their disposal three large, capable law firms, who are claiming to
be unable to handle reasonable discovery requests demonstrates that the Discovery Limitation
Motion is an abusive litigation tactic designed to prevent parties in interest from testing the
propriety of the Debtors’ chosen course. Similarly, the third parties (or the “Settling Parties”
defined in the Discovery Limitation Motion) proposed to be shielded under the Discovery
Limitation Motion are similarly represented by competent counsel, and are similarly capable of
responding to legitimate discovery requests stemming from their participation in the purported
“global settlement.”
4. The Debtors also support the Discovery Limitation Motion by reference to a
desire “to focus on their businesses and restructuring efforts.” See Discovery Limitation Motion,
¶ 15. That justification rings hollow because the Debtors have limited (if any) ongoing business
operations and they have already cut the deal by which they would seek to “restructure.” Simply
put, the Debtors and their numerous professionals and advisors have nothing left to do but
prepare for a contested confirmation hearing, including responding to discovery requests in the
normal course.
{D0181611.1 }5
5. As has been demonstrated by its past efforts to work with the Debtors in these
cases, the TPS Consortium is certainly willing to deal constructively with the Debtors, the
Settling Parties and other parties opposing confirmation so as to avoid unnecessary duplication
of efforts and to not create any additional burden – as is the common practice in Chapter 11
cases in this District. Not once before filing the Discovery Limitation Motion did the Debtors
request cooperation with respect to discovery requests that might be duplicative of requests made
by others in these cases, and at all times, the TPS Consortium has shown its willingness to
cooperate. Rather than attempt to work constructively with parties in interest, the Debtors would
prefer to dictate unilaterally the terms, conditions and timing on which Plan-related discovery
will proceed. There is simply no justification to cede to the Debtors (who have already ignored
this Court’s warnings regarding discovery disputes and broken numerous discovery-related
agreements) the power to neuter the discovery rights of parties in interest.
6. By their dilatory tactics to avoid discovery, the Debtors only demonstrate their
desperation to protect at all costs the purported “global settlement.” It is becoming increasingly
clear that the settlement was so ill-conceived and so improvident that the only hope the Debtors
have to obtain approval will be to hide from the Court and parties in interest information
necessary to properly evaluate the Debtors’ decision-making and conduct. Justice Louis
Brandeis is credited with saying that “Sunshine is the best disinfectant.” Brandeis, Louis D.
“What Publicity Can Do,” Harper’s Weekly (Dec. 20, 1913). The facts and circumstances of this
case demand that the purported settlement be subjected to the “sunshine” of fair and reasonable
discovery – not the truncated and virtually useless process the Debtors have asked the Court to
endorse.
{D0181611.1 }6
7. Due process, the integrity of the bankruptcy system and fundamental fairness
dictate that the Debtors should be directed to comply with: (a) this Court’s prior directives; (b)
their prior commitments and representations; and (c) their obligations as fiduciaries and under
the Federal Rules of Bankruptcy Procedure. As such, and as discussed further herein, the
Motion to Compel should be granted and the Discovery Limitation Motion should be denied.
BACKGROUND
A. Matters For Which Discovery Is Critically Important.
8. As the Court is well aware, currently pending are: (a) the Debtors’ Second
Amended Disclosure Statement (the “Disclosure Statement”); (b) the Debtors’ Second Amended
Plan (the “Plan”); and (c) a purported global settlement to be implemented through the Plan (the
“Global Settlement”). The Disclosure Statement was initially set for consideration on May 19,
but suddenly pulled back by the Debtors the afternoon before the hearing. Hearing on the
Disclosure Statement is currently set for hearing June 3. The Plan was initially proposed for
consideration on or about July 20.
9. Despite the fact that the Debtors will be emerging without any real operating
business, they have been in an incredible rush to proceed to confirmation.3 At the same time,
Debtors are hindering the efforts of parties in interest to obtain discovery in any reasonable
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3 At the May 19 omnibus hearing, the Court made a short (but, the TPS Consortium
believes, apropos) comment regarding the Debtors’ rush to get approval of the purported
“global settlement” when it asked:
Mr. Rosen: . . . We’re trying to get this case out of chapter 11 as
quickly as possible, Your Honor. The ongoing accrual of interest –
The Court: But why?
Hearing Transcript, May 19, 2010 Omnibus Hearing, pp. 31:22 – 31:25 (emphasis added).
{D0181611.1 }7
timeframe commensurate with that schedule. It has become clear that Debtors are trying to
eliminate the possibility of any real discovery. Now they have suggested that they would be
willing to delay consideration for 12 to 14 days, but only if they are able to continue to thwart
discovery as proposed in the Discovery Limitation Motion.
10. Pursuant to the Plan and Global Settlement, the members of the TPS Consortium
and similarly-situated parties are faced with minimal (approximately 1¼ cents on the dollar)
recoveries in comparison to a potential $4 billion liquidation preference against a solvent non-
Debtor entity; and (b) the forced release by such parties of potentially valuable claims and causes
of action against numerous non-Debtor parties involved in the seizure and sale of the Debtors’
assets and/or the non-disclosure of material information in connection with the sale of certain
Trust Preferred Securities (among other potential claims).
11. While it has, for the most part, been denied access to information critical to
evaluating properly the contemplated treatment under the Plan (as well as the adequacy of the
proposed disclosure to stakeholders regarding that treatment), the TPS Consortium believes the
following, among other issues set forth in its objection to the Disclosure Statement (and as set
forth in the document request that is Exhibit A to the Motion to Compel), must be investigated:
• The bases for the Debtors’ entry into the purported “global settlement” whereby
they would compromise billions of dollars in claims and deliver significant value
to JPMorgan Chase and others (either in direct value or in the form of broad
releases), including: (a) the value ascribed by the Debtors to the various assets to
be retained or transferred under the Plan; and (b) what the Debtors considered in
connection with the settlement (e.g., alternative plans, cost of pursuing claims,
existence of other potential claims, etc.). Of particular interest to the TPS
Consortium is the fact that without having conducted any real discovery, the
Debtors are completely relinquishing all claims related to the ownership of $4
billion worth of Trust Preferred Securities.
• The bases for the Debtors’ attempt to compel a release of third party claims,
including any claims related to the Trust Preferred Securities.
• The existence of conflicts of interest relating to the Debtors’ counsel and
settlement parties who are to receive significant value and/or broad releases, and
how, if at all, those conflicts were accounted for in connection with the
negotiations. 4
• The circumstances related to the purported “conditional exchange” and
“downstreaming” of $4 billion in Trust Preferred Securities in close proximity to
the commencement of these cases, including what the Debtors considered before
agreeing as part of the settlement to simply hand over this value to JPMorgan
Chase.
12. That investigation can occur only if the TPS Consortium is given access to the
information it has been seeking from the Debtors (and which the Debtors have been promising to
provide) for over a month.
B. The Court’s Discovery-Related Directives To The Debtors.
13. At the May 5, 2010 omnibus hearing, Debtors opposed the appointment of an
examiner, arguing that an examiner was unnecessary because the parties could use discovery to
conduct their own investigation into the propriety of the proposed “global settlement” and
accompanying Plan. In that regard, counsel for the Debtors stated:
Mr. Rosen: . . . . With respect to the Plan process, Your Honor, we
filed a motion with the Court that sets forth a time frame, and
specifically – and counsel said here nothing had been set for
confirmation. July 20th, Your Honor: That is the date contained in
the Motion. We asked for that period of time so that people
would have an opportunity between May 19th and July 20th to do
whatever discovery is necessary associated with the Plan, the
global settlement agreement, and that we wouldn’t be here asking
for a delay of 150 days.
Hearing Transcript, May 5, 2010 Omnibus Hearing, pp. 95:7 – 95:15.
______________________
4 For example, JPMorgan Chase is a significant client of Debtors’ counsel, Weil, Gotshal &
Manges. This fact bears significance in this case because the proposed Global Settlement cedes
billions of dollars worth of claims against JPMC and also seeks to compel the TPS Consortium
and those similarly situated to provide broad releases to JPMC in exchange for approximately
1% of the value of their interest in the Trust Preferred Securities. 14. In denying the request to appoint an examiner, the Court gave the following
directives to the Debtors:
The Debtor has vigorously appeared in and prosecuted its position
in several adversaries in this case, in addition to filing a claim in
the FDIC Receivership and prosecuting claims in that forum. All
of that information should be available to the equity committee.
And I don’t want to hear about obstacles being placed in their
path to getting full and open access to that information, whether
it’s documentary or interviews with the Debtors’ management or
others who have conducted these investigations; and the same
goes with the creditors’ committee, who’s been actively involved
in all of this.
Hearing Transcript, May 5, 2010 Omnibus Hearing, pp. 99:14 – 99:24 (emphasis added).
Secondly, I think the equity committee is fully able to conduct the
investigation it seeks to have the examiner conduct. It has the
benefit of Rule 2004, it has the benefit of the discovery rules,
because there are contested matters presently and anticipated in
which the equity committee could fully avail itself of that
discovery. But again, I’m strongly urging the committee and the
debtor to provide all of the information to the equity committee
without testing the Court’s patience with discovery motions.
Hearing Transcript, May 5, 2010 Omnibus Hearing, pp. 100:5 – 100:13 (emphasis added).
15. Despite the Court’s admonition, the Debtors have decided to “test[] the Court’s
patience.” Instead of producing documents, the Debtors have engaged in discovery
gamesmanship in an attempt to shrink the time within which the objecting parties may access,
review and analyze documents, conduct depositions and otherwise meaningfully prepare for
trial.
C. The Debtors’ Actions Related to Discovery.
16. Without restating in full the chronology of events set forth in the Motion to
Compel (see ¶¶ 5-15 of the Motion to Compel), the TPS Consortium was forced to seek the
Court’s assistance after: (a) Debtors made several assurances in mid- to late-April that they
{D0181611.1 }10
would cooperate with informal document requests, but failed to make good on its assurances for
weeks; and (b) the TPS Consortium’s formal document requests related to information necessary
to prepare for the hearing on the Disclosure Statement were met by the Debtors’ statement that
they would not even respond until three weeks after the Disclosure Statement hearing (and only
two weeks before the then-contemplated confirmation objection deadline).
17. Notwithstanding the filing of the Motion to Compel, the TPS Consortium
continued to attempt to resolve these issues with the Debtors—even, as the Court may recall,
through the beginning of the May 19 omnibus hearing at which the Motion to Compel was set
for consideration. Indeed, the TPS consortium thought it had reached such a resolution. At that
hearing, counsel for the TPS Consortium read into the record the agreement of the parties:
Mr. Coffey: Thank you, Your Honor. Again, Jeremy Coffey with
Brown Rudnick on behalf of the TPS Consortium. I’m happy to
announce that we’ve achieved a partial resolution of our motion to
compel and this is what we would propose to do, if it meets with
Your Honor’s agreement. The Debtors have offered by tomorrow
to get to us documents responsive to request number 2 of our
document request, which is Exhibit A to the motion to compel.
Also beginning tomorrow, the debtors will use best efforts to start
delivering documents responsive to the rest of our request on a
rolling basis.
Hearing Transcript, May 19, 2010 Omnibus Hearing, pp. 39:21 – 40:6 (emphasis added).
18. The following day (May 20), the Debtors produced documents only partially
fulfilling their commitment with respect to documents to be produced on that day. Despite
numerous follow-up requests, as of this filing, that production still remains incomplete.
With respect to production of prior Rule 2004 discovery, it took several more days and a threat by the TPS Consortium to seek the Court’s intervention, before the Debtors began to make those
documents available.5
19. On Friday, May 21, the TPS Consortium became concerned about the Debtors’
continued failure to fulfill their commitment to use “best efforts” to fulfill the balance of the
document requests. The TPS Consortium requested a “meet and confer” to discuss the situation.
See Exhibit A [May 21, 12:45 Coffey email]. During the ensuing conversation, the Debtors
indicated that they were busy preparing to file a further amended Plan and Disclosure Statement.
In response, the TPS Consortium offered to defer the “meet and confer” until the following
Monday (May 24) to accommodate the competing demands on the Debtors’ resources.
20. On the following Monday (May 24), the TPS Consortium attempted to schedule a
time to conduct the “meet and confer” regarding the TPS Consortium’s document requests, as
the Debtors had requested on the prior Friday. See, e.g., Exhibit B [May 24, 11:08 Coffey
email]. Unable to schedule a call with the Debtors on Monday, the TPS Consortium continued
its efforts to meet and confer on the following day. See, e.g., Exhibit C [May 25, 11:13 Coffey
email].
21. During the eventually scheduled call on May 25, the Debtors indicated that they
wanted to try to clarify the requests and discuss the possibility of narrowing certain of the TPS
Consortium’s document requests—a concept to which the TPS Consortium indicated it was
amenable. In response to an inquiry as to what and how they would like to narrow, the Debtors
stated that they needed more time to review the requests and discuss the matter internally. The
TPS Consortium reluctantly agreed to the further delay. Since then, the TPS Consortium has
______________________
5 Still, additional days were lost as a result of the wrong disks being made available and
because after several days had passed, Debtors informed the TPS Consortium for the first
time that a number of third parties would have to consent to production of documents.
{D0181611.1 }12
attempted in vain to resume a dialogue with the Debtors concerning fulfillment of the TPS
Consortium’s document requests and the Debtors’ agreement at the May 19 hearing. See, e.g.,
Exhibits D and E [May 26, 2:15 Brown email and May 28, 9:36 Brown email].
22. Despite the Debtors’ assurances at the May 19 hearing, there has been no good
faith effort to fully respond to the TPS Consortium’s document requests. Instead, Debtors
provided a partial production, followed by more empty promises, and a pattern of ignoring
requests to meet and confer.
23. On May 27, after having stalled for over a week, the Debtors filed the Discovery
Limitation Motion. All attempts since that filing to discuss fulfillment of the Debtors’ May 19
promises have gone unanswered.
D. The Discovery Limitation Motion.
24. Through the Discovery Limitation Motion, the Debtors ask this Court to approve
an outrageous curtailment of the objecting parties’ due process rights. Specifically, the Debtors
seek the unilateral right to decide: (a) which issues may be raised; (b) what discovery is relevant;
(c) who the parties in interest may depose; and (d) when the Debtors will comply with their
discovery obligations. Each of these decisions are designed to allow Debtors to prevent any
meaningful discovery and to leave parties in interest with insufficient time to conduct reasonable
discovery and develop their cases.
25. The Debtors imply that the restrictions they seek to impose are necessitated by the
volume of discovery requests with which they are dealing. Upon information and belief, the
Debtors currently have approximately one law firm to deal with each pending discovery request
to them. Further, the Creditors’ Committee, JPMorgan Chase and the FDIC (parties who would
also be relieved of their typical discovery obligations through the Discovery Limitation Motion)Discovery [Docket No. 4301] that Debtors made it appear as though they were investigating
potential claims against JPMC in conducting their Rule 2004 discovery. However, after
receiving a whole host of objections and only a limited amount of responsive information,
Debtors chose to not resolve any of the discovery disputes and simply abandon those claims
without concluding their factual investigation. Motion for 2004 Discovery, ¶¶ 2-3, 8.
30. Because the Debtors have abandoned claims with minimal discovery (the JPMC
situation serving as an example), the parties in interest should be entitled to conduct full
discovery as to what led to the conclusion to do so. While some discovery requests may be
duplicative of discovery requested by others, such duplication should actually make the response
easier, rather than more difficult. For example, Debtors will only have to compile the documents
that are responsive to the same or similar requests once and produce the same documents to each
of the requesting parties. With respect to depositions, the TPS Consortium is of course willing to
coordinate efforts with the other two requesting parties so that witnesses would not have to
appear multiple times. In other words, there is no inefficiency or grand problem that warrants
any need for special discovery procedures.
31. Not only have the Debtors asked for procedures that were utilized in a case
involving dramatically different circumstances, they are also trying to impose greater limitations
than those warranted in Enron. For example, the Enron order did not apply to third parties, it
only applied to the debtors, creditors committee and examiner. Here, the Debtors’ proposed
procedure would allow Debtors to limit the TPS Consortium’s ability to take discovery from
other parties to these cases including JPMC and the FDIC. Compare Proposed Order, ¶ 4 and
Enron Order, ¶ 4. Additionally, the Debtors’ proposed order would allow them to create only a
partial privilege log, excluding anything that Debtors would say is attorney work product (Proposed Order, ¶ 7), thereby denying parties in interest the opportunity to test such assertion or
to establish a substantial need for the production of work product as is allowed under Fed. Rule
Civ. P. 26(b). Debtors seek to further limit the ability of objecting parties to be able to seek
depositions above and beyond those initially dictated by Debtors, providing that any request to
the Court for depositions of other parties must be limited to Rule 30(b)(6) depositions. Proposed
Order, ¶ 9. No similar restriction existed in the Enron Order.
32. In addition to being highly unusual and wholly unnecessary, the limitations
sought to be imposed through the Discovery Limitation Motion are highly prejudicial. The
proposed limits are exacerbated by the truncated timeframe in which the Debtors seek to push
these cases through the confirmation process. The starkest examples of the unreasonable
proposed terms include:
Forcing Parties In Interest to Develop Plan Objections Blindly
• On June 21, 2010, before conducting any Plan-related discovery, and after having
been denied discovery (as a result the Debtors’ refusal to produce documents as
agreed) related to the Disclosure Statement, the TPS Consortium would be
required to file a Plan objection. See Discovery Limitation Motion, ¶ 19.
• Thereafter, the TPS Consortium would be permitted to conduct discovery, but
only with respect to the issues set forth in its initial objection, which must be
filed after already having been denied appropriate discovery. See id. Even if
the TPS Consortium subsequently uncovers additional bases on which to oppose
confirmation of the Plan, it would be precluded from discovery with respect to
such issues. See id.
• Such a restriction is highly prejudicial because Debtors have already hindered the
ability of parties in interest to make meaningful objections by refusing to provide
even the discovery they previously promised to provide. Now Debtors seek to
limit discovery to those limited areas that parties can develop without the benefit
of any information. This procedure is proposed to prevent any party from shining
light on the Debtors’ lack of diligence.
Limiting Depositions to Witnesses Hand-Picked by Debtors
• The Debtors would dictate who could be deposed by parties in interest. See
Discovery Limitation Motion, ¶¶ 17 & 24. Additionally, the Debtors will tell
{D0181611.1 }17
parties in interest when and where those depositions will occur. See Discovery
Limitation Motion, ¶ 27. If a party in interest desires the deposition of someone
not hand-picked by the Debtors, it must, within one week of obtaining Debtors’
witness list and access to whatever documents Debtors, apparently in their sole
discretion deem to be relevant: (1) identify the additional witnesses; (2) explain
why the Debtors’ selected witnesses are not sufficient; and (3) seek leave of
Court to take the deposition. See Discovery Limitation Motion, ¶ 24.
• Dictating who may be deposed and when, is nothing more than another example
of preventing parties in interest from being able to take truly meaningful
depositions and obtain relevant evidence related to Debtors’ abandonment of
several billion dollars in claims. Debtors will likely claim that the proposal
allows parties to depose other witnesses where it is warranted. However, when
viewed in context of the proposed timeframe and in light of the fact that Debtors
are able to dictate, indiscriminately, the limited information upon which the TPS
Consortium can formulate its objections, the proposal is a sham.
Debtors Deciding What Documents to Produce
• The Debtors will not even begin to provide documents until June 23, 2010, and
then only with respect to topics the Debtors deem relevant. See Discovery
Limitation Motion, ¶ 21. If a party in interest seeks documents other than those
selected by the Debtors, it must provide by June 28, a certification stating the
relationship of the request to the initially-filed objection (i.e., the objection that
must be filed without the benefit of any prior discovery) and why the request is
“reasonably necessary” given the availability of the documents selected by the
Debtors for review. See Discovery Limitation Motion, ¶ 25. At that point, the
recipients of discovery requests still have the ability to object, further hindering
the ability of the parties in interest to obtain discovery.
• This proposed procedure is also a farce because Debtors propose to be the sole
arbiters of what the parties in interest may see. Far from providing an avenue for
obtaining additional documents not initially provided by Debtors, Debtors again
seek the ability to control, single-handedly, the extent of the investigation by the
parties. Debtors would: (1) control the limited information provided initially; (2)
control the limits of any subsequent information; and (3) be able to hinder any
true preparation for the confirmation hearing by drawing out any supplemental
production that may or may not occur.
Preventing the Use of Discovery Tools Provided Under the Federal Rules
• By the Discovery Limitation Motion, the Debtors would also seek to prevent
parties in interest from utilizing discovery tools provided under the Federal Rules.
See Discovery Limitation Motion, ¶ 24. And, parties in interest would be
precluded, by an Order of this Court, from serving discovery requests outside of
the limitations sought to be imposed by the Debtors. See Discovery Limitation
Motion, ¶ 29.






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