Jefferson Bank v. Devault Manufacturing Co. (In re Devault Manufacturing Co.)
Jefferson Bank v. Devault Manufacturing Co. (In re Devault Manufacturing Co.)
Opinion of the Court
The issue before the court is whether we should permit the taking of discovery by the intervenor in these proceedings. We conclude that, inasmuch as our order permitting intervention (and the District Court’s affirmation of that order) was based on the understanding that discovery would not be necessary, such discovery will not be permitted.
The history of this ease is briefly:
At the time when we granted the committee’s motion to intervene, we understood the committee’s'request to be based on the fact that it had available evidence relevant to Devault’s insolvency and the bank’s knowledge of that insolvency. In fact, our finding that the committee’s interests had not been adequately represented by De-vault’s counsel was based on the representation of the committee that Devault had had that evidence available before this case was decided, but that its counsel had failed to offer it into evidence or to have it made a part of the stipulation of facts.
Furthermore, Judge Bechtle was also apparently under the impression that, by its motion to intervene, the committee only sought the opportunity to introduce a limited range of evidence which was already available to it. This is evident from Judge Bechtle’s opinion wherein he found that the committee’s motion to intervene was timely because
. . . the existing parties to the litigation will suffer little, if any, prejudice as a result of the intervention of the Creditors’ Committee. The Creditors’ Committee seeks to intervene solely to introduce a limited range of evidence not presented heretofore. No discovery or other pretrial procedures are to be invoked which might further postpone resolution of Jefferson’s claim, nor does the Creditors’ Committee propose to introduce evidence repetitive of that which has already been introduced by stipulation.
In light of the above, we conclude that the creditors’ committee was permitted to
For the same reasons, the motion of the creditors’ committee to compel the bank to respond to the committee’s first request for production of documents and the first set of interrogatories will be denied.
. This opinion constitutes the findings of fact and conclusions of law required by Rule 752 of the Rules of Bankruptcy Procedure.
. Although the Bankruptcy Act has been superseded by the Bankruptcy Code as of October 1, 1979, the provisions of the Act still govern petitions filed before that date. The Bankruptcy Reform Act of 1978, Pub.L.No.95-598, § 403, 92 Stat. 2683 (1978).
Reference
- Full Case Name
- In re DEVAULT MANUFACTURING COMPANY, Bankrupt. JEFFERSON BANK v. DEVAULT MANUFACTURING COMPANY
- Status
- Published