In re Blinder, Robinson & Co., Inc.
| Decision Date | 17 May 1991 |
| Docket Number | 91-K-638.,Civ. A. No. 90-K-1863 |
| Citation | 127 BR 267 |
| Parties | In re BLINDER, ROBINSON & COMPANY, INC., Debtor. INTERCONTINENTAL ENTERPRISES, INC., Appellant, v. Glenn E. KELLER, Jr., Trustee of Blinder, Robinson & Co., Inc., Appellee. |
| Court | U.S. District Court — District of Colorado |
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Kalmon Glovin, Nathan Davidovich and Jay L. Gueck, Goodwin, Carlton & Maxwell, Dallas, Tex., for appellant.
Glenn Merrick, William A. Bianco, Jeffrey R. Pilkington, Davis, Graham & Stubbs, Denver, Colo., for appellee.
These related cases involve several bankruptcy court rulings permitting the trustee for Blinder, Robinson & Co., Inc., Glenn E. Keller, Jr. ("Trustee"), to conduct examinations under Bankruptcy Rule 2004. In No. 90-K-1863, Intercontinental Enterprises, Inc., the parent corporation and a creditor of Blinder, Robinson, appeals the bankruptcy court's August 27, 1990 ruling giving the Trustee initial approval to examine numerous persons and entities and requiring them to produce documents relating to the operation of Blinder, Robinson. On April 22, 1991, Intercontinental filed an emergency motion for stay in this appeal to prevent these Rule 2004 examinations from going forward. In No. 91-K-638, Intercontinental appeals the bankruptcy court's April 17, 1991 bench ruling granting the Trustee's request that the Rule 2004 examinations of the former attorneys of Blinder, Robinson be closed to other parties.
The questions before me on these motions are: (1) whether No. 90-K-1863 should be dismissed as an improper appeal from a non-final order; (2) whether Intercontinental's request for an emergency stay in No. 90-K-1863 is justified, (3) whether No. 91-K-638 should be dismissed because the notice of appeal was premature, and (4) whether No. 91-K-638 should be dismissed as an improper interlocutory appeal. In addition, during argument on these motions, Intercontinental moved to strike certain pleadings filed in connection with these appeals. For the following reasons, I grant the motion to dismiss in No. 90-K-1863, grant in part the emergency motion for stay, deny the motion to dismiss in No. 91-K-638 and deny the motions to strike.
On July 30, 1990, Blinder, Robinson filed a petition for reorganization under Chapter 11 of the Bankruptcy Code. On August 1, 1990, the Securities Investor Protection Corporation (SIPC) filed a complaint in district court seeking a protective decree declaring that the customers of Blinder, Robinson were in need of protection under the Securities Investor Protection Act (SIPA), 15 U.S.C. §§ 78aaa-78lll. After a hearing, the court granted SIPC's request for the protective decree, appointed the Trustee and his counsel, and referred the case to the bankruptcy court for liquidation of Blinder, Robinson under SIPA. See id. § 78eee(b)(4).
On August 24, 1990, the Trustee filed a pleading entitled, "Trustee's First Motion for Order Authorizing Conduct of Rule 2004 Examinations and Issuance of Subpoenas to Compel Attendance and Production of Documents and Other Tangible Things." In this motion, the Trustee requested permission to examine approximately 79 persons or entities connected with Blinder, Robinson and to require them to produce documents and other information relevant to the corporation. The bankruptcy court granted this motion without a hearing on August 27, 1990 (the "August order").
Intercontinental filed its objection to the motion on August 30, 1990, not aware that the August order had been entered. After learning that the court had already ruled, it filed a motion for reconsideration on September 5, 1990. The court denied Intercontinental's motion for reconsideration on September 26, 1990. On October 9, 1990, Intercontinental filed its notice of appeal and motion for leave to appeal from the August order, which now constitutes No. 90-K-1863.
On April 11, 1991, the Trustee filed an emergency motion for a protective order, requesting that he be permitted to conduct Rule 2004 examinations of Blinder, Robinson's former in-house and outside counsel without the attendance of any other persons except the testifying witness, his or her counsel, the Trustee, his counsel, and the court reporter. The Trustee requested this relief to protect Blinder, Robinson's attorney-client privilege, which now runs to the Trustee. See generally, Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 105 S.Ct. 1986, 85 L.Ed.2d 372 (1985) (). The bankruptcy court granted this motion without a hearing that day (the "April order").
Intercontinental quickly moved to set aside the April order. On April 16, 1991, the bankruptcy court entered an interim order granting Intercontinental's motion to vacate the April order until it conducted a hearing on the issue. At the April 17, 1991 hearing, Intercontinental argued, inter alia, that the Trustee's use of Rule 2004 examinations to gain information about the former operation of Blinder, Robinson was improper because the Trustee had recently filed an adversary complaint against the former principals of Blinder, Robinson and Intercontinental. Intercontinental argued that, under these circumstances, the Trustee should be required to conduct discovery pursuant to the Federal Rules of Civil Procedure, not Bankruptcy Rule 2004. The bankruptcy court rejected this argument and from the bench reinstated the April order. The court subsequently entered written findings of fact and conclusions of law on April 30, 1991, nunc pro tunc April 17, 1991. At the conclusion of the hearing, counsel for Intercontinental verbally requested the court stay its ruling pending an appeal to the district court. The bankruptcy court denied the request. Intercontinental filed a notice of appeal from this ruling on April 19, 1991, which constitutes No. 91-K-638.
Concurrently with its notice of appeal in No. 91-K-638, Intercontinental filed an emergency motion for stay of the April order pending appeal. I granted the motion after a hearing on April 19, 1991. The stay affects the Rule 2004 examinations of only the former attorneys of Blinder, Robinson.
On April 22, 1991, Intercontinental filed a second emergency motion for stay, this time in No. 90-K-1863. In this motion, Intercontinental requested a stay of all Rule 2004 examinations, including those of non-attorneys, pending a determination of whether the Trustee should be required to conduct discovery under the Federal Rules of Civil Procedure. I temporarily stayed the examinations until a hearing on emergency motion could be conducted.
Finally, on April 26, 1991, the Trustee moved to dismiss both the above appeals on the grounds that neither is an appeal from a final judgment. He also argued that the notice of appeal in No. 91-K-638 was premature. A hearing on the motion to dismiss and the emergency motion for stay in No. 90-K-1863 was conducted before this court on May 15, 1991. At that hearing, counsel for Intercontinental moved to strike the Trustee's reply brief in support of his motion to dismiss and the Trustee's affidavit filed in response to the emergency motion for stay. These matters are now before me.
The Trustee asserts that the August order permitting him to conduct Rule 2004 examinations is not a final judgment appealable as of right under 28 U.S.C. § 158(a). Bankruptcy appeals as of right are limited to "final judgments, orders and decrees . . . of bankruptcy judges entered in cases and proceedings referred to the bankruptcy judges under section 157 of . . . title 28." 28 U.S.C. § 158(a). "Generally, an order is final if it ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Adelman v. Fourth Nat'l Bank & Trust Co., N.A. (In re Durability, Inc.), 893 F.2d 264, 265 (10th Cir.1990). The concept of finality, however, is less rigid in the bankruptcy context. It applies "not in the overall case, but rather the particular adversary proceeding or discrete controversy pursued within the broader framework cast by the petition." Id. at 266.
There is little direct authority on whether an order authorizing or limiting a Rule 2004 examination is a final, appealable order. The Trustee cites only one case, an unpublished disposition from the District of Kansas, in which the court held that such an order was interlocutory. The court in that case gave no reasoning and cited no cases in support for its conclusion. Intercontinental, on the other hand, provides only general case authority for its position that the August order was final.1
A review of the few cases involving appeals of orders relating to Rule 2004, or its predecessor under the Bankruptcy Act, Rule 205, reveals only a glimmer of consistency. In the most recent pre-Code cases, a majority of courts considered such orders to "arise in proceedings in bankruptcy" and, therefore, to be final. See, e.g., Securities Investor Protection Corp. v. Christian-Paine & Co., 755 F.2d 359, 360-61 (3d Cir.1985); Citibank, N.A. v. Andros, 666 F.2d 1192, 1194 n. 5 (8th Cir.1981); In re W.F. Breuss, Inc., 586 F.2d 983, 985 (3d Cir.1978) ().
Cases decided after the enactment of the Bankruptcy Code are less consistent. For example, in European-American Bank & Trust Co. v. GATX Aircraft Corp. (In re Hawley Coal Mining Corp.), 47 B.R. 392 (S.D.W.Va.1984), the district court expressly construed the bankruptcy court's order limiting Rule 2004 examinations to be a final order, apparently never questioning its conclusion. Other courts have by implication done the same, hearing appeals from Rule 2004 orders with no mention of this jurisdictional issue. See, e.g., First Nat'l Bank v. Scaccia, No. 88-3369 (E.D.La. Nov. 10, 1988) (); Keene...
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