I. Procedural Background of This Appeal
This is an appeal by Stefano Picciotto, Judith Picciotto, Melita Picciotto, Athena Picciotto, Foreign Car Center, Inc., and Juan Nunez, Appellants, from Orders of the Bankruptcy Court (Feeney, J.) of May 26, 1999 and May 27, 1999.
Notice of Appeal, dated June 3, 1999, was filed in Bankruptcy No. 96-13184-JNF on June 4, 1999 (Docket No. 953).
The Order of May 26, 1999 denied an Emergency Motion for Release of Transcript of Hearing on February 26, 1999.
The Order of May 27, 1999 denied an Emergency Motion for Reconsideration of Denial of the Emergency Motion for Release of Transcript of Hearing on February 26, 1999.
Appellants acknowledge that the bankruptcy matter in which these two motions were filed has been concluded. Appellants contend that the issues raised in the motions relate to previous rulings of the Bankruptcy Court, that the Bankruptcy Court had jurisdiction under 11 U.S.C. § 105(a), and that this court has jurisdiction over the appeal under 28 U.S.C. § 158(a).
II. Statements of Facts in the Briefs
Appellants' Statement of Facts is as follows:
On January 6, 1999 when the Settlement Agreement which formed the foundation of the successful conclusion of the Case was executed, all parties thereto knew that the Judgment Creditors had issues to resolve with their prior counsel which might effect the timing of performance of the settlement.
Indeed, express reference was made to those issues in several provisions of the Settlement Agreement itself (See Appendix Exhibit F). Most particularly, the Judgment Creditors negotiated an exception in the Confidentiality Provision in the Settlement Agreement ". . . to gain releases of attorneys\' liens . . ." (See Appendix Exhibit F, Page 7, Paragraph 10) and consistently maintained that exception throughout the Judgment Creditors\' Emergency Motion to File Documents Under Seal (the "Motion to Seal") and the hearing on that Motion (See Appendix Exhibits G and H, Pages 26 through 27). Moreover, neither the Motion to Seal which, as allowed by marginal notation constitutes the "sealing order" in the Case, nor any other order of the bankruptcy court refers to the sealing of transcripts of public hearings (See Appendix Exhibit G).
The alleged attorney lienholders have made numerous statements in filings in the Interpleader (which action is, fundamentally, an action to gain releases of attorneys\' liens) regarding issues addressed in the bankruptcy court for which the best (and only conclusive) way to refute them is by reference to the bankruptcy court\'s official records (See, for example, Appendix Exhibit S, Exhibit E). The Interpleader is presently active and the Judgment Creditors anticipate further use of the bankruptcy records in resolving the issues raised therein. As there is no confidentiality maintained in the Interpleader, denial of access to the Transcript only serves to prevent the state court from knowledge of the harm the Judgment Creditors\' former attorneys have caused, and continue to cause their clients.
Docket No. 4 at 14-15.
Appellee challenges in material part the Appellants' Statement of Facts. Appellee's statement of facts is as follows:
On January 6, 1999, appellants Stefano Picciotto, Judith Picciotto, Melita Picciotto, Athena Picciotto, Juan Nunez and Foreign Car Center, Inc. (hereafter the "Picciottos") and The Travelers Indemnity Company ("Travelers"), amongst others, entered into a settlement agreement (the "Settlement Agreement"). The Settlement Agreement resolved various litigations and potential litigations between the parties, including Bankruptcy Adversary Proceeding 96-1298 (the "Adversary Proceeding"). A key component of the Settlement Agreement was a confidentiality provision, which provided:
Except as required by law or to effectuate the necessary judicial approvals, to gain releases of attorneys\' liens, for submission by Travelers to its insurers, reinsurers or auditors, or to enforce the terms of this Agreement, the parties will use best efforts to maintain the confidentiality of the settlement amount, settlement agreement, this term sheet and the settlement terms, including but not limited to jointly seeking approval of the Bankruptcy Court to place under seal all settlement agreements and materials involving the parties who are signatories below.
Exhibit F of Plaintiff\'s Appendix of Exhibits ("App.Ex. F"), para. 10.
Pursuant to the terms of the Settlement Agreement, on February 10, 1999 the Picciottos filed, in the Adversary Proceeding, an Emergency Motion to File Documents Under seal ("Emergency Motion"). App.Ex. G. The Emergency Motion noted that "the guarantee of confidentiality is an essential component of the Settlement Agreement, and the agreement is put at risk if the terms become public." Id. The Emergency Motion also argued that "there is little or no benefit to allowing public access to the terms of what is nothing more than a settlement agreement between private parties." Id. In response to the Emergency Motion, the Bankruptcy Court issued an Order on February 11, 1999 (the "Sealing Order") which required "sealing of all documents referring either directly to indirectly to any of the terms or conditions of the settlement agreement entered into by the parties on January 6, 1999 . . ., including but not limited to the settlement amount." Id. The Picciottos did not appeal from the Sealing Order.
On February 26, 1999, a hearing was held in the Bankruptcy court in which the terms of the confidential Settlement Agreement were discussed. Pursuant to the terms of the Sealing Order, the transcript of that hearing was sealed by the Bankruptcy Court (hereafter the "Sealed Transcript").
On May 20, 1999 — despite the terms of the Settlement Agreement and its own earlier motion to the Court — the Picciottos filed an emergency motion asking the Bankruptcy Court to release the Sealed Transcript ("Motion to Unseal"). App.Ex. Q. The Motion to Unseal contained no facts supporting release of the transcript. Instead, it merely contained the conclusory statement that the Picciottos needed the transcript "for purposes of the inter-pleader action in Suffolk Superior Court." Id. The Bankruptcy Court denied the Motion on May 26, 1999. App. Ex. R. The Picciottos thereafter filed a motion for reconsideration of the Bankruptcy Court\'s May 26, 1999 Order ("Motion for Reconsideration"). App. Ex. S. On May 27, 1999 the Bankruptcy Court denied that motion as well, noting that the "movant has failed to demonstrate why the sealed transcript would be necessary." Id. By this appeal, the Picciottos now seek to appeal from those Orders.
Docket No. 6 at 2-4.
III. The Form and Meaning of the Sealing Order
The Sealing Order of February 11, 1999 was in the form of a handwritten "Motion Allowed" on the margin of the motion docketed as Docket No. 793 in the Bankruptcy Court. To determine the content of the Sealing Order we must consider the text of the motion, which included the following phrase of approximately 70 words:
sealing all documents referring either directly or indirectly to any of the terms and conditions of the settlement agreement entered into by the parties on January 6, 1999 (the `Settlement Agreement\'), including but not limited to the settlement amount, in accordance with the Confidentiality Provision (defined below) of the Settlement Agreement.
It is true, as appellants argue, that the Sealing Order did not literally extend beyond this...
