Greater Southeast Community Hospital Cor and Doctors Community Healthcare Corporation

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
GREATER SOUTHEAST COMMUNITY
HOSPITAL CORP., I, et al.,
Debtors.
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Case No. 02-02250
(Chapter 11)
(Jointly Administered)
OPINION REGARDING MOTION TO COMPEL
COMPLIANCE WITH LIQUIDATING TRUST AGREEMENT
Sam J. Alberts, Trustee for the DCHC Liquidating Trust (the
“Trust”), filed a motion (the “Motion”) to compel compliance by
the Reorganized Debtors with respect to obligations arising under
a certain Liquidating Trust Agreement entered into by the parties
(D.E. No. 2673, filed August 18, 2005). The Trust sought to
compel the Reorganized Debtors to produce certain e-mails of the
Reorganized Debtors that were generated between November 20,
2002, and April 5, 2004 (the “Contested E-mails”). The
Reorganized Debtors filed an objection to the Motion (the
“Objection”) on September 12, 2005 (D.E. No. 2703), and the court
conducted a hearing on the motion on October 18, 2005.
The court held at the hearing on the Trust’s Motion that the
The decision below is signed as a decision of
the court.
Signed: December 16, 2005.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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Trust was entitled to recover documents from the Reorganized
Debtors only after providing the Reorganized Debtors with written
requests for Contested E-mails “relating to the Trust Claims or
the Distribution Assets” within the meaning of that phrase as it
appears in Section 3.5 of the Liquidating Trust Agreement. The
court further held that, upon receipt of any such requests, the
Reorganized Debtors must produce Contested E-mails responsive to
the Trust’s requested within thirty days and that, to the extent
the Reorganized Debtors objected to the production of any
responsive Contested E-mails, the Reorganized Debtors must
include a privilege log indicating the basis for non-production.
Finally, in response to a request made by the Trust at the
hearing, the court ordered the Reorganized Debtors not to purge
any of the Contested E-mails and to maintain the existing hard
drives on their computers for a period of forty-five days so that
the status quo of the case would be preserved while the parties
worked out an arrangement for preserving the Contested E-mails.
The court directed the Trust to file a proposed order reflecting
the court’s rulings from the bench. The Trust filed such an
order on November 22, 2005 (D.E. No. 2751).
In response to the proposed order filed by the Trust, the
Reorganized Debtors filed their own Notice of Submission of
Counter Proposed Order on Trustee’s Motion to Compel Compliance
with Liquidating Trust Agreement on November 29, 2005 (D.E. No.
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2752). The Reorganized Debtors object to the proposed order
filed by the Trust on two grounds. First, the proposed order
submitted by the Trust does not limit the injunctive relief
ordered by the court to a period of forty-five days, but rather
extends the injunction indefinitely pending further ruling by the
court. Second, the proposed order encompasses not only the e-
mails and hard drives of the Reorganized Debtors, but also the e-
mails and hard drives of all of the so-called “Partially Released
Parties,” who were not parties to the Trust’s Motion and in some
instances are not employed by the Reorganized Debtors. The
Reorganized Debtors argue that the court’s order was not directed
to this larger group of individuals, but was instead restricted
to the Reorganized Debtors.
The court agrees with the Reorganized Debtors on both
points. The court imposed a time limitation on its injunctive
relief for a specific purpose; namely, so that the parties could
reach agreement as to how Contested E-mails should be preserved
and, if necessary, retrieved from the hard drives of the
Reorganized Debtors. If the parties are unable to reach such an
agreement, the Trust can move to extend the injunction, which the
court may grant if appropriate. The court also agrees with the
Reorganized Debtors that the language in the Trust’s proposed
order regarding the “Partially Released Parties” is inappropriate
given that the Reorganized Debtors were the subject of the
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Trust’s Motion, not the Partially Released Parties. The Trust
should file a separate motion if it concludes that it is
necessary to enjoin the Partially Released Parties as well.
For these reasons, the court rejects the proposed order
submitted by the Trust. Instead, the court will enter the
proposed order submitted by the Reorganized Debtors, which
reflects accurately the ruling of the court from the bench at the
hearing on the Trust’s Motion.
An order follows.
[Signed and dated above.]
Copies to: All counsel of record
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