National Medical Imaging, L.L.C. and National Medical Imaging Holding Company, LLC

UNITED S TATES B ANKRUPTCY COURT
FOR T HE E ASTERN DISTRICT O F PENNSYLVANIA
In re 	: Chapter 11
:
NATIONAL MEDICAL IMAGING, L.L.C., 	: Bankruptcy No. 05-12714DWS
NATIONAL MEDICAL IMAGING HOLDING 	:
COMPANY, LLC, 	:
:
Debtor. 	:
MEMORANDUM OPINION
BY: 	DIANE WEISS SIGMUND, Chief Bankruptcy Judge
Before the Court is (1) Putative Debtors’ Motion to Quash Subpoenas Issued Against
Fairmount Partners and First Keystone Bank and to Issue Protective Orders (“Protection
Motion”) and (2) Motion of Putative Debtors for Order Compelling General Electric Capital
Corporation [“GECC”] to Produce Documents (“Motion to Compel”). For the reasons which
follow, the motions shall be granted in part and denied in part.
FACTUAL AND PROCEDURAL BACKGROUND
On March 3, 2005, GECC, inter alios, filed involuntary Chapter 11 petitions
(the “Involuntary Petitions”) against related entities National Medical Imaging, LLC
and National Medical Imaging Holding Co., LLC (“NMI” and “NMIHC,” respectively,
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1 The two cases are being jointly administered.
2 Made applicable here by Fed. R. Bankr. P. 1018.
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and collectively “Putative Debtors”) pursuant to 11 U.S.C. § 303. 1 The parties have been
engaged in contentious discovery on the issue of whether the substantive requirements of
§ 303(b) and (h) are met with respect to the Involuntary Petitions, i.e., whether Debtors were
paying their debts as they came due prior to the filing of the Involuntary Petitions and
whether GECC is a proper petitioning creditor. Indeed, the motions before me are but the
latest in what has become a nuclear war of discovery. At the Court’s suggestion, the parties
have voluntarily narrowed the scope of their respective discovery requests and objections
thereto, leaving certain disputed issues which I now address.
DISCUSSION
The scope of discovery is governed by Fed.R.Civ.P. 26,2 which states in relevant part:
“Parties may obtain discovery regarding any matter, not privileged, which is relevant to
the subject matter involved in the pending action.” 	Fed.R.Civ.P. 26(b)(1). 	Relevancy is
“construed broadly to encompass any matter that bears on, or that reasonably could lead to
other matter that could bear on, any issue that is or may be in the case.” Oppenheimer Fund,
Inc. v. Sanders, 437 U.S. 340, 351, 98 S. Ct. 2380, 2389 (1978).
The Protection Motion
Putative Debtors have filed the Protection Motion in response to subpoenas that
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3 It appears that the subpoenas GECC issued to Keystone Bank are no longer at issue.
See Putative Debtors’ Reply to [GECC]’s Further Response in Opposition to [Protection Motion]
(“Put. Debtors’ Reply Mem.”) at 2 n.1 (discussing withdrawal of Putative Debtors’ subsequent
motion to quash as to other banking institutions).
4 The categories of information sought by the Fairmount Subpoenas are:
1) 	Schedule or other documentation provided to or generated by
Fairmount Partners reflecting capital lease obligations by creditor,
last payment made and status of each loan.
2) 	Statement or other documentation of cash flow provided to or
generated by Fairmount Partners indicating payment of capital lease
obligations to GE, Marcap, DVI, US Bank, Medical Equipment
Recovery and Citigroup for the period January 1, 2002 to July 5,
2005.
3) The disclosure provided to or prepared by Fairmount Partners to
be provided to investors as to the outstanding obligations owed to
GE, Marcap, DVI, US Bank, Medical Equipment Recovery and
Citigroup.
4) 	Financial statements provided to/prepared by or used by
Fairmount Partners as of December 31, 2002, 2003 and 2004 and the
most current date in 2005.
5) Schedule prepared by or given to Fairmount Partners, indicating
use of proceeds of equity or sale proceeds.
6) Accounts payable records and or schedule of vendors owed funds
provided to or used by Fairmount Partners and the status of NMI
et al’s obligations as of the most recent date.
(continued...)
-3-
GECC issued to Fairmount Partners (“Fairmount” and the “Fairmount Subpoenas”)3 upon
its belief that Fairmount is an investment banking firm to whom Putative Debtors provided
financial information. The Fairmount Subpoenas seek production of two types of documents:
(1) those provided to Fairmount by Putative Debtors and (2) those generated by Fairmount
itself. See Put. Debtors’ Reply Mem. at 3. Putative Debtors do not allege that the current
scope of the Fairmount Subpoenas exceeds the broad definition of relevancy,4 but rather they
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(...continued)
7) 	Any prospectus or financial package prepared by Fairmount
Partners to give to potential investors or buyers.
[GECC]’s Further Response in Opposition to Putative Debtors’ Motion to Quash at 3 (Doc. No. 164)
(“GECC’s Further Response”).
5 Putative Debtors attach an index which they allege “reveals that GECC is in possession
of each document requested in the Fairmount Subpoena which was created by the Putative Debtors.”
Put. Debtor’s Reply Mem. at 4 (emphasis added). The documents at issue, however, are Fairmount-
generated documents. 	Putative Debtors have not explained how those documents, presumably
containing some kind of analysis by Fairmount, would be duplicative.
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seek to limit the scope of the Fairmount Subpoenas to only those documents prepared by
Debtors and provided to Fairmount. They ask me to disallow the production of Fairmount-
generated documents.
“A party seeking a protective order over discovery materials must demonstrate that
‘good cause’ exists for the protection of that material.” Glenmede Trust Co. v. Thompson,
56 F.3d 476, 483 (3d Cir. 1995). 	Good cause is shown “by demonstrating a particular
need for protection.” Cipollone v. Liggett Group, Inc., 785 F.2d 1108, 1121 (3d Cir.1986).
Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning, will
not satisfy the Rule 26(c) test. Id. While “good cause” may be satisfied by a showing that
the material sought is irrelevant, the burden of showing irrelevancy is on the party resisting
discovery. E.g. McCurdy v. Wedgewood Capital Mgt., 1998 WL 961897, at *3 (E.D. Pa.
Dec. 31, 1998).
While Putative Debtors make the unsubstantiated allegation that Fairmount-generated
documents would be duplicative of documents already provided by Putative Debtors,5 they
fail to provide any specific examples as to how they would be harmed by production of
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Fairmount-generated documents. 	I note that the main concerns identified in the initial
Protection Motion were the confidential nature of the documents and the very broad scope of
the initial Fairmount Subpoenas at that time. These concerns, however, have been obviated
by the parties’ agreement to treat the documents pursuant to confidentiality/protection
agreement already in place as well as GECC’s significant narrowing of the subject matter of
the subpoenas. Putative Debtors fail to identify any harm stemming from the production of
documents subject to the current Fairmount Subpoenas, save for a premature concern that
GECC believes statements made by Fairmount are binding upon Putative Debtors.
Put. Debtors’ Reply Mem. at 6-7. Needless to say, allowing GECC access to Fairmount-
generated documents is not a finding by the Court as to the admissibility or probative value
of the documents. As Putative Debtors fail to meet their burden of showing an identifiable
harm through the production of Fairmount-generated documents, the Protection Motion is
denied in this respect.
Putative Debtors also object to the temporal scope of the Fairmount Subpoenas, which
seeks financial statements and documentation of cash flow from January 1, 2002 to July 5,
2005. 	Putative Debtors correctly note that the relevant date of inquiry as to whether a
putative debtor is “generally not paying” debts as they become due is to be applied as of date
of filing of involuntary petition, e.g. Bartmann v. Maverick Tube Corp., 853 F.2d 1540,
(10th Cir. 1988). GECC has failed to present any contrary argument, so I must agree that the
temporal scope of the Fairmount Subpoenas is excessive and unlikely to lead to information
bearing on whether Putative Debtors were generally paying their debts as of the Petition
Date. I find that good cause exists for limiting Fairmount’s production of documents to those
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6 Alexander relies upon United States Optical, Inc. v. Corning Inc. (In re U.S. Optical, Inc.),
991 F.2d 792, 1993 WL 93931 (4th Cir. April 1, 1993) (unpublished decision), which noted that the
court was duty bound to conduct an inquiry, if requested, to determine whether an involuntary
petition has been filed in good faith. U.S. Optical relies upon In re Winn, 49 B.R. 237 (Bankr. M.D.
Fla. 1985). Id. at *3. Winn involved an involuntary petition that was in fact conceived by the debtor
with three creditors who acted as straw men creditors for the debtor by signing the petition. I agree
that it is proper for a bankruptcy court “to inquire to what extent the debtor is involved in the
institution of an involuntary case,” and not to wear blinders to such clear abuses of the bankruptcy
process by a debtor who cannot otherwise file its own voluntary case. 	49 B.R. at 239. 	This
collusive situation is clearly not before me and I question the reliance upon Winn by the Alexander
and U.S. Optical courts.
-6-
produced to it by Putative Debtors or generated by Fairmount between January 1, 2004 to
the Petition Date, March 3, 2005;
Motion to Compel
The Motion to Compel seeks certain documents which Putative Debtors allege pertain
to GECC’s subjective motives in filing the Involuntary Petitions. Putative Debtors take the
position that, even assuming GECC can show that the substantive requirements of § 303(b)
and (h) are met, improper motivations or other “bad faith” on GECC’s part would provide
an independent basis for dismissal of the Involuntary Petitions. There appears to be some
divergent opinion on this issue. Compare In re WLB-RSK Venture, 296 B.R. 509 (Bankr.
C.D. Cal. 2003) (finding that bad faith could provide basis for dismissal independent of
substantive requirements of § 303); In re Alexander, 2000 WL 33951465 (Bankr. D.
Vermont Aug. 29, 2000) (same) 6 with Kaplan v. Breslow (In re WLB-RSK Venture),
320 B.R. 221, 2004 WL 3119789 at *6 n. 13 (BAP 9th Cir. Nov. 24, 2004) (unpublished
table opinion affirming 296 B.R. 509 on another basis while rejecting bad faith as
independent basis for dismissal); In re Knoth, 168 B.R. 311, 315 (Bankr. D.S.C. 1994)
(motivations of petitioning creditors are irrelevant where the substantive requirements of
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7 GECC, offered the opportunity to respond to the Motion to Compel, simply argues that the
absence of a requirement of good faith in § 303(b) and (h) dictates that the defense of bad faith is
not available. To conclude otherwise, it contends is to rewrite the statute. Moreover, the availability
of relief under § 303(i) for damages for a bad faith filing requires that there first be a dismissal order.
As for case law authority, it correctly observes that there is no binding case law authority in the
Third Circuit so I am free to ignore the cases supporting Putative Debtors’ position.
GECC fails to note that the dismissal of cases for bad faith is not expressly found anywhere
in the statute but as the Third Circuit cases it cites evidence, dismissal for that reason has been
sanctioned notwithstanding the statute’s failure to identify bad faith as grounds. I agree that the
availability of damages requires first that there be a dismissal order. However, that does not answer
the question of whether bad faith can be a defense to an involuntary petition that otherwise meets
the statutory requirements of § 303.
8 The Court is mindful of Fed. R. Bankr. P. 1013(a) which requires the court to “determine
the issues of a contested petition at the earliest practicable time and forthwith enter an order for
relief, dismiss the petition, or enter any other appropriate order.” Accord In re G.T.L. Corp., 211
B.R. 241, 247 (Bankr. N.D. Ohio 1997) (bankruptcy court has a duty to promptly adjudicate
involuntary petitions); In re Kidwell, 158 B.R. 203, 212 (Bankr. E.D. Cal.1993) (noting that “time
is of the essence” in determining whether there is a meritorious involuntary bankruptcy). A side trip
into this issue at the request of the Putative Debtors of necessity protracts adjudication of the
contested petition. Presumably they have weighed that fact and concluded that being subject to the
control of the bankruptcy court does not outweigh their need to pursue this defense and not rely on
GECC being unable to satisfy the statutory criteria.
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§ 303 are otherwise met unless the issue is whether to allow joinder of additional petitioning
creditors to cure a defective petition). Neither party has attempted to reconcile the divergent
opinions, 7 and I conclude that there may be circumstances where the subjective motivations
of a petitioning creditor would warrant the dismissal of an involuntary case. 	I need not,
however, identify the parameters at this discovery stage before any evidence that might be
relevant to dismissal on these grounds can be elicited.8 I will therefore find that GECC’s
subjective motivations is a relevant subject of discovery and address the remaining objections
raised by GECC.
Putative Debtors have reduced the scope of the Motion to Compel to nineteen
documents that have been submitted by GECC to the Court for in camera review
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(the “In Camera Submission”) as Exhibits A-S (the “Disputed Documents”). GECC asserts
that the Disputed Documents are protected from disclosure by the attorney-client privilege,
and/or the work product doctrine. See Privilege Log attached as Exhibit A to Supplement
to [Motion to Compel] (“Debtors’ Supp. to Compel”).
It is well-established that the attorney-client privilege constricts the truth-finding
process and is therefore to be construed narrowly, e.g. Westinghouse Electric Corp. v.
Republic of the Phillippines, 951 F.2d 1414, 1423 (3d Cir. 1991). The party asserting the
privilege bears the burden of showing (1) the asserted holder of the privilege is or sought to
become a client; (2) the person to whom the communication was made (a) is a member of the
bar of a court, or his subordinate and (b) in connection with this communication is acting as
a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by
his client (b) without the presence of strangers (c) for the purpose of securing primarily either
(i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not
(d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed
and (b) not waived by the client. 	E.g., Rhone-Poulenc Rorer Inc. v. Home Indem. Co.,
32 F.3d 851, 862 (3d Cir. 1994), (citing In re Grand Jury Investigation, 599 F.2d 1224, 1233
(3d Cir. 1979)). See also Greene, Tweed of Delaware, Inc. v. Dupont Dow Elastomers, LLC,
202 F.R.D. 418, (E.D. Pa. 2001). As noted above, part of this burden is proving that the
privilege has not been waived.
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9 Rule 26(b)(3), made applicable here by Fed.R.Bankr.P. 1018, states in relevant part:
. . . a party may obtain discovery of documents and tangible things otherwise
discoverable under subdivision (b)(1) of this rule and prepared in anticipation
of litigation or for trial by or for another party or by or for that other party's
representative (including the other party's attorney, consultant, surety, indemnitor,
insurer, or agent) only upon a showing that the party seeking discovery has
substantial need of the materials in the preparation of the party's case and that the
party is unable without undue hardship to obtain the substantial equivalent of
the materials by other means. 	In ordering discovery of such materials when the
required showing has been made, the court shall protect against disclosure of the
mental impressions, conclusions, opinions, or legal theories of an attorney or other
representative of a party concerning the litigation.
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The work product doctrine is governed by Fed.R.Civ.P. 26(b)(3),9 and protects
documents and tangible things prepared “in anticipation of litigation or for trial” unless the
party seeking production demonstrates “substantial need of the materials in the preparation
of the party's case,” and that they are “unable without undue hardship to obtain the
substantial equivalent of the materials by other means.” 	E.g. United Coal Companies v.
Powell Const. Co., 839 F.2d 958, 966 (3d Cir. 1988).
In determining whether a document was prepared “in anticipation of litigation,”
the appropriate inquiry is “whether in light of the nature of the document and the factual
situation in the particular case, the document can fairly be said to have been prepared or
obtained because of the prospect of litigation.” Martin v. Bally's Park Place Hotel & Casino,
983 F.2d 1252, 1258 (3d Cir. 1993). There must be a “reasonable anticipation” of litigation,
i.e., not merely a remote prospect or inchoate possibility. “Rather, a party must show that
there existed ‘an identifiable specific claim of impending litigation when the materials were
prepared.’” In re Gabapentin Patent Litigation, 214 F.R.D. 178, 183 (D. N.J. 2003); accord
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In re Grand Jury Investigation, 599 F.2d 1224, 1229 (3d Cir. 1979); Schmidt, Long & Assoc.,
Inc. v. Aetna U.S. Healthcare, Inc., 2001 WL 605199, at *4 (E.D. Pa. 2001). Moreover, the
document must have been prepared for the prospect of litigation and no other purpose.
214 F.R.D. at 184.
If the party invoking the work product protection establishes these elements,
the burden shifts to the party seeking production to show substantial need for the protected
material 	and 	an 	inability 	to 	get 	the 	equivalent 	information 	from 	another 	source.
E.g. E.E.O.C. v. Guess?, Inc., 176 F.Supp. 2d 416, 423 (E.D. Pa. 2001). Unlike the attorney-
client privilege, the party invoking the work product doctrine does not bear the burden of
proving non-waiver. Greene, Tweed of Delaware, Inc., 202 F.R.D. at 423.
Finally, even where the party seeking production of documents and things prepared
in anticipation of litigation meets its burden, the Court is nevertheless mandated to “protect
against disclosure of the mental impressions, conclusions, opinions, or legal theories of an
attorney or other representative of a party concerning the litigation,” Fed.R.Civ.P. 26(b)(3).
Putative Debtors correctly note that voluntary disclosure to one's adversary of
documents protected by the attorney-client privilege or work-product doctrine will operate
as a waiver of that protection with respect to documents relating to the same subject matter
as the disclosed items. See Thorn Emi North America, Inc. v. Micron Technology, Inc., 837
F.Supp. 616, (D. Del. 1993); Rhone-Poulenc Rorer Inc. v. Home Indem. Co., 1993 WL
106429, at *3 ( E.D. Pa. 1993). 	This rule is one of fairness. 	“In order to protect against
self-serving disclosure, a party who discloses protected documents waives the right to assert
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10 However, I reject Putative Debtors’ position that GECC has waived the attorney-client
privilege and/or work product doctrine defense merely by virtue of filing the Involuntary Petition
and therefore placing its good faith “at issue.” Putative Debtors cite to Bowne of New York City,
Inc. v. AmBase Corp., 150 F.R.D. 465, 484 (S.D.N.Y. 1993), which simply holds that if the
privilege holder puts attorney-client communication at issue by virtue of his claim or defense, that
subject matter should be waived. GECC has not raised advice of counsel as a defense or a claim
here. Moreover, every litigant in federal court places their good faith at issue with every document
filed with the Court. See Fed.R.Civ.P. 11. The rule espoused by Putative Debtors would effectively
eviscerate well-established protections.
11 Exhibits 2-4 to Putative Debtors’ Supp. were the subject of a protective motion filed by
GECC. By Order dated August 16, 2005, I ordered that these inadvertently produced documents
be returned to GECC. I therefore do not include them in determining whether GECC has waived
the attorney-client privilege or the work product doctrine.
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work product or attorney-client productions for all documents dealing with the same subject
matter.” 1993 WL. 106429, at *3.10
Putative Debtors assert that GECC has voluntary disclosed privileged documents
relating to GECC’s subjective motives in filing the Involuntary Petitions and has therefore
waived any claim of attorney-client privilege or work product protection for the Disputed
Documents on this subject matter. 	Exhibits 1 and 5-9 to Debtors’ Supp. to Compel
(the “Waiver Documents”).11 I agree.
The Waiver Documents are internal GECC memos/reports which were clearly
prepared in anticipation of litigation, i.e., GECC’s subsequent filing of the Involuntary
Petitions. 	The Waiver Documents also disclose at least some of GECC’s subjective
motivations in filing the Involuntary Petitions: (1) using involuntary bankruptcy as a method
of collecting Putative Debtors outstanding obligations to GECC; (2) a way of dealing with
what GECC perceived as Putative Debtors skill at conventional litigation; (3) possible
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fraud by Putative Debtors which might warrant imposition of a bankruptcy trustee.
Having disclosed some if its motives, GECC has waived protection under the work product
doctrine as to any Disputed Documents that deal with the same subject matter.
In addition to being work product, Exhibit 1 of the Waiver Documents also appears
to convey legal advice from outside counsel that is relevant to GECC’s motives. Exhibit 1
at 2 (under the heading “Current Status”). Part of GECC’s burden in proving the attorney-
client privilege with respect to the Disputed Documents is demonstrating that it has not
waived the privilege. GECC fails to address this document at all and therefore fails to meet
its burden. Having produced Exhibit 1, GECC has also waived the attorney-client privilege
with respect to Disputed Documents relating to its subjective motivations.
Relevant to GECC’s waiver is the “joint defense” or “common interest” privilege
(hereinafter the “common interest privilege”), which GECC has raised as to some of the
Disputed Documents. The common interest privilege is not a separate protection, but rather
enables litigants facing a common opponent to exchange otherwise privileged materials in
order to adequately prepare a defense or prosecution without waiving the underlying
privilege. Haines v. Liggett Group Inc., 975 F.2d 81, (3d Cir. 1992). GECC asserts that
many of the Disputed Documents were created under a joint prosecution strategy with
co-petitioning creditor Lyon Financial Services, Inc. d/b/a U.S. Bank Portfolio Services
(“U.S. Bank”) as memorialized in a written Joint Prosecution Agreement. Exhibits L and N
(duplicate copies) to the In Camera Submission. Thus, documents created by U.S. Bank and
its counsel, if otherwise privileged as attorney-client communication or work product, would
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12 As discussed below, there is one document (Exhibit K) that bears a hand-written notation
“subject to Joint Prosecution Agreement.” I address it below.
13 GECC has followed what is unfortunately a common practice of invoking privileges
without providing the necessary information for a privilege determination. 	Rarely does the
document itself provide all the information necessary for a court to make a privilege determination.
Indeed, Fed.R.Civ.P. 26(b)(5) specifically requires parties claiming privilege or work product
protection to “describe the nature of the documents, communications, or things not produced or
disclosed in a manner that, without revealing information itself privileged or protected, will enable
other parties to assess the applicability of the privilege or protection.” The skeletal descriptions
(continued...)
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not lose that protection by their production to GECC and vice versa. Moreover, documents
subject to common interest privilege are also protected from GECC’s waiver of the
underlying attorney-client or work product protection through its disclosure of the Waiver
Documents. See John Morrell & Co. v. Local Union 304A, United Food and Commercial
Workers, 913 F.2d 544, 556 (8th Cir. 1990) (protection “cannot be waived without the
consent of all parties to the defense”); In re In-Store Advertising Securities Litigation, 163
F.R.D. 452, (S.D.N.Y. 1995) (same).
Unfortunately for GECC, not one of Disputed Documents comply with the explicit
requirement of the Joint Prosecution Agreement: 	documents exchanged under that
agreement must be marked with (1) the providing party’s name and (2) the words “Joint
Prosecution Privilege.” Exhibits L and N to In Camera Submission at 2. Despite GECC’s
assertion that certain documents were created or exchanged with U.S. Bank pursuant to
this agreement, none of the Disputed Documents bear these required markings.12 Nor does
GECC provide any facts from which I might determine that any Disputed Document was
created or exchanged under the Joint Prosecution Agreement.13
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(...continued)
found in GECC’s privilege log (i.e., “e-mail correspondence re: litigation strategy,” “memorandum
regarding National Medical Imaging”) do not comply with the rule. See In re Lomas Financial
Corp., 1999 WL 33495524, at *5 (Bankr. D. Del. 1999) (privilege log should contain a brief
description or summary of the contents of the document, the date the document was prepared,
the person or persons who prepared the document, the person to whom the document was directed,
or for whom the document was prepared, the purpose in preparing the document, the privilege or
privileges asserted with respect to the document, and how each element of the privilege is met as
to that document).
Aside from the privilege log and documents themselves, the only source of explanation is
found in GECC’s Further Response To the Motion to Compel. Statements in briefs generally do not
constitute evidence unless admitted by the opposing party. Braden v. University of Pittsburgh, 477
F.2d 1, 6 (3d Cir.1973). Absent any objection by Putative Debtors as to the admissibility of GECC’s
assertions or evidence to the contrary, I will treat 	the document descriptions in the brief as a
certification of counsel. 	That said, even certifications much be factually sufficient and
uncontroverted by other evidence to support the claimed privilege. My findings below are based
upon the record GECC has made in support of its burden of proving the applicability of the
privileges it invoked.
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That said, I will not ignore the obvious fact that GECC and U.S. Bank had a common
interest as petitioning creditors. Nor does the common interest privilege require a written
joint strategy. Some of the Disputed Documents (albeit fewer than GECC would like) on
their face evidence a joint strategy between GECC and U.S. Bank, regardless of the Joint
Prosecution Agreement. I will accord any such document the protections of any underlying
privilege notwithstanding GECC’s own waiver.
After reviewing the Disputed Documents in camera along with GECC’s descriptions
and applying the above legal principles to the privileges claimed by GECC, I make the
following findings of fact and conclusions of law.
Exhibit A is an attorney billing record. Billing records are subject to the attorney-
client privilege to the extent that they reveal the nature of the services rendered.
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14 GECC has provided Exhibit C to Putative Debtors, so this exhibit is no longer at issue.
GECC’s Further Response at 3.
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Montgomery County v. MicroVote Corp., 175 F.3d 296, 304 (3d Cir. 1999). 	Thus, the
descriptions of the services in this document are privileged. 	The remaining information
(identity of attorney and hours spent) is irrelevant to the issue of GECC’s subjective
motivation. It need not be produced.
Exhibit B is a cover letter between Michael G. Menkowitz (“Menkowitz”) and GECC
employee Joanne M. Harmon (“Harmon”) that evidences nothing more than the existence
of an attorney-client relationship between GECC and Fox Rothchild LLP. 	It is therefore
not a privileged communication. See Diversified Indus., Inc. V. Meredith, 572 F.2d 596,
603 (8th Cir. 1978); Cohen v. Uniroyal, Inc., 80 F.R.D. 480, 483 (E.D. Pa. 1978). However,
neither does it contain any information relevant to GECC’s subjective motivations in filing
the Involuntary Petitions. It need not be produced.
Exhibit D,14 is an e-mail from Menkowitz to GECC that merely forwards a link to
the website of Fairmount Partners. It does not disclose any confidential information for the
purpose of seeking legal advice so as to support 	the attorney-client privilege asserted
by GECC. 	Nor is there any indication that it was created in anticipation of litigation.
The relevancy of this document seems tenuous, but I cannot say it is unlikely to lead to
information regarding GECC’s subjective motivations. It shall be produced.
Exhibits E and P are duplicate copies of a series of GECC internal e-mails pertaining
to the recommendation of Harmon to pursue litigation against Putative Debtors. They are
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15 Thus, it is relevant to one of the motivations enunciated in the Waiver Documents, i.e.,
NMI being a skilled litigant. See Exhibit 1 to Putative Debtors’ Supp. to Compel.
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relevant to GECC’s subjective motivations and the work product doctrine asserted by GECC
has been waived by its disclosure of the Waiver Documents. Nor is there any indicia that
these e-mails were shared with U.S. Bank pursuant to a joint strategy. This document shall
be produced.
Exhibit F is a chart listing various suits against NMI in the Pennsylvania courts. 15
GECC concedes that it was prepared by counsel for U.S. Bank and not by GECC or its
representative. 	GECC’s Further Resp. To Compel at 3-4. 	As such, GECC cannot
independently invoke attorney-client privilege or work product doctrine. GECC’s assertion
that this chart was produced to it pursuant to the Joint Prosecution Agreement, is belied by
the document’s failure to bear the required designation. Nor does GECC provide any facts
for the Court to determine that it was prepared or given to GECC pursuant to a joint strategy
with U.S. Bank. It shall be produced.
Exhibits G and I are duplicate copies of an agenda for a meeting between GECC and
U.S. Bank with respect to the filing of the Involuntary Petitions. It is clear from the face of
the document that it was prepared in anticipation of filing the Involuntary Petitions and
pursuant to a joint strategy between GECC and U.S. Bank, whether or not such strategy is
memorialized in the Joint Prosecution Agreement. Thus, it is protected work product, and
subject to the common interest doctrine is unaffected by GECC’s disclosure of the Waiver
Documents. It need not be produced.
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16 The amounts Putative Debtors owed to GECC is relevant to GECC’s subjective
motivation. See Exhibit 1 to Putative Debtors’ Supp. to Compel (memo discussing involuntary
bankruptcy as a method of collecting outstanding debt).
17 Again, GECC’s self-serving assertion that it prepared this document for distribution to
U.S. Bank pursuant to the Joint Prosecution Agreement, is belied by the lack of the required party
identification and designation “Joint Prosecution Materials.” 	While GECC also asserts that it
prepared the document for distribution to its attorney, that alone is an insufficient factual basis for
invocation of the attorney-client privilege.
18 The subject of the memo is an investigation by U.S. Bank’s counsel of possible fraud by
a principal of NMI and therefore relevant to GECC’s subjective motivations. 	See Waiver
Documents, Exhibit 6 to Putative Debtors’ Supp. to Compel (discussing possible fraud as a basis
for appointing a trustee in an involuntary bankruptcy case).
-17-
Exhibits H and J are duplicate copies of a chart prepared by GECC that lists various
obligations of Putative Debtors. 16 The document does not contain any information which
infers that it was created in anticipation of litigation or that it is an attorney client
communication.17 This document shall be produced.
Exhibit K is a memorandum which GECC concedes was prepared by U.S. Bank’s
counsel for U.S. Bank.18 GECC cannot invoke attorney-client privilege or work product
absent applicability of the common interest doctrine. 	While this document bears the
handwritten notation “subject to Joint Prosecution Agreement,” I find the notation suspect
because: (1) it is hand-written; (2) it does not comply with the exact designation required by
the parties to the agreement; and (3) it is the only document that bears any marking referring
to the Joint Prosecution Agreement, despite GECC’s invocation to that agreement to several
Disputed Documents. 	Nor can I ascertain from the document itself that it was prepared
pursuant to a joint litigation strategy between GECC and U.S. Bank. As GECC has failed
to provide any factual averments to support a claim of privilege, it shall be produced.
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19 The e-mail notes that GECC has received inquiries from outside imaging companies
(continued...)
-18-
Exhibits L and N are duplicate copies of the Joint Prosecution Agreement entered into
by GECC and U.S. Bank. This document was clearly created in anticipation of litigation and
pursuant to a joint strategy and is therefore protected work product unaffected by GECC’s
waiver under the common interest doctrine.
Exhibits M and O are duplicate copies of a document that GECC asserts was produced
to it by its counsel. 	It evidences an implicit request for legal advice and contains legal
analysis and advice by counsel. I find that it falls within the attorney-client privilege and
does not fall within the scope of GECC’s waiver, i.e., GECC’s subjective motivations.
Exhibit Q is an e-mail from U.S. Bank to GECC scheduling a conference call or
meeting. Nothing in the e-mail reflects that it was sent in anticipation of litigation, nor does
it contain confidential communication between attorney and client. It shall be produced.
Exhibit R is an exchange of internal GECC e-mail communication, namely Harmon’s
request for documents in compliance with Putative Debtors document request and the
response of several employees. It is not relevant to GECC’s subjective motivation in filing
the Involuntary Petition and need not be produced.
Exhibit S consists of two-emails from Mark Tambussi (Vice President, Regional
Sales) to Harmon. 	Neither of these individuals has been identified as counsel for GECC
so as to trigger the attorney-client privilege, nor is it trial preparation material. It is arguably
relevant to GECC’s subjective motivations,19 and shall be produced.
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(...continued)
regarding NMI filing for bankruptcy and inquiring about available assets. See Waiver Documents,
Exhibit 6 to Putative Debtors’ Supp. to Compel (discussing possible sale of assets through
bankruptcy).
-19-
Additional Relief Requested
After a hearing on the Motion to Compel, the Court requested the In Camera
Submission and supplemental briefing in order to identify and address all the disputed
documents at issue in the Motion to Compel. 	Notwithstanding this directive, Putative
Debtors’ Additional Supplement to Motion of Putative Debtors for Order Compelling
[GECC] to Produce Documents (“Putative Debtors Add. Supp. to Compel”) raises for
the first time a request as to documents which GECC produced in redacted form.
Putative Debtors’ Add. Supp. to Compel at 3. 	These documents were not mentioned in
the original Motion to Compel or as part of the In Camera Submission. 	The purpose of
supplemental briefing was to address the documents at issue in the Motion to Compel, not
to submit additional items not framed by the parties to the Court as in dispute. Moreover,
Putative Debtors have failed to certify that the parties, after reasonable effort, are unable to
resolve the dispute as to the redacted documents. See Local Bankruptcy Rule 7026-1(a).
I will deny this request without prejudice to Putative Debtors to bring an appropriate motion.
Putative Debtors also ask the Court to find that the attached Exhibit 10 to their
supplement, produced to them by GECC, constitutes a waiver of the attorney-client and work
product protections on the subject matter of whether there are any debts subject to a bona fide
dispute. Id. at 2. Again, this request goes beyond the scope of the Motion to Compel, i.e.,
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In re National Medical Imaging, L.L.C. - Bankruptcy No. 05-12714DWS
-20-
documents pertaining to GECC’s subjective motivations. In any case, none of the Disputed
Documents that I have held are protected pertain to this subject matter.
An Order consistent with this Memorandum Opinion shall issue.
DIANE WEISS SIGMUND
Chief U.S. Bankruptcy Judge
Dated: October 31, 2005
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UNITED S TATES B ANKRUPTCY COURT
FOR T HE E ASTERN DISTRICT O F PENNSYLVANIA
In re 	: Chapter 11
:
NATIONAL MEDICAL IMAGING, L.L.C., 	: Bankruptcy No. 05-12714DWS
NATIONAL MEDICAL IMAGING HOLDING 	:
COMPANY, LLC, 	:
:
Debtor. 	:
ORDER
AND NOW, this 31st day of October 2005, upon consideration of (1) Putative
Debtors’ Motion to Quash Subpoenas Issued Against Fairmount Partners and First Keystone
Bank and to Issue Protective Orders (“Protection Motion”) and (2) Motion of Putative
Debtors for Order Compelling General Electric Capital Corporation [“GECC”] to Produce
Documents (“Motion to Compel”), after notice and hearing, and for the reasons stated in the
accompanying Memorandum Opinion;
It is hereby ORDERED that:
1. 	The Protection Motion is GRANTED IN PART. The Fairmount Subpoenas
are restricted to documents which relate to the time period January 1, 2004 to
March 3, 2005. In all other respects, the Protection Motion is DENIED.
2. 	The Motion to Compel is GRANTED IN PART as follows:
(a) GECC shall produce to Putative Debtors
copies of the documents submitted in camera as
Exhibits D-F, H, J, K, P, Q, and S;
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In re National Medical Imaging, L.L.C. - Bankruptcy No. 05-12714DWS
-2-
(b) To the extent that Putative Debtors have
requested additional relief in their supplemental
memorandum as to certain redacted documents,
this request is DENIED without prejudice;
(c) In all other respects, the Motion to Compel is DENIED.
DIANE WEISS SIGMUND
Chief U.S. Bankruptcy Judge
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In re National Medical Imaging, L.L.C. - Bankruptcy No. 05-12714DWS
-3-
Copies to:
Aris Karalis, Esquire 	Carol E. Momjian, Esquire
Ciardi, Maschmeyer & Karalis, PC 	Senior Deputy Attorney General
1900 Spruce Street 	21 South 12 th Street, 3 rd Floor
Philadelphia, PA 19103 	Philadelphia, PA 19107-3603
Dave P. Adams, Esquire 	Richard Welsh, Esquire
Office of the U.S. Trustee 	Commonwealth of PA
833 Chestnut Street, Suite 500 	444 North 3rd Street, Suite 3B
Philadelphia, PA 19107 	Philadelphia, PA 19123
Michael Menkowitz, Esquire 	Maury L. Rosenberg
Samuel H. Israel, Esquire 	National Medical Imaging, LLC
2000 Market Street, 10th Floor 	1919 Walnut Street
Philadelphia, PA 19103-3291 	Philadelphia, PA 19103
Timothy A. Gallogly, Esquire 	Jay Gottlieb, Esquire
SIRLIN, GALLOGLY & LESSER, PC 	BROWN RAYSMAN MILLSTEIN FELDER & STEINER , LLP
1529 Walnut Street, Suite 600 	900 Third Avenue
Philadelphia, PA 19102 	New York, NY 10022
Francis J. Sullivan, Esquire 	Brian Grady, Esquire
SULLIVAN & SULLIVAN 	GRADY & FALCIONE, LLP
403 Executive Drive 	1500 Sansom Street, 2 nd Floor
Langhorne, PA 19047 	Philadelphia, PA 19102
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