A Bankruptcy Court Judge is concerned about “leaks of sensitive, non-public information concerning the bidding process and mediation.” The bankruptcy case is In re Molycorp, Inc. (Case No. 15-11357 in the District of Delaware).
A “Leaks” Problem
The Bankruptcy Judge identifies three Bloomberg articles authored by Jodi Xu Klein and others as containing such “leaks.” These are the articles he identifies:
–December 11, 2015: “Molycorp Said to Get No Bids for Entire Firm in First Round”
–December 15, 2015: “Molycorp Said to Push Ahead with Plan as Creditor Talks Fail”
–January 5, 2016: “Molycorp Bids Said to Top Miner’s Own Price Amid Sales Feud.”
The Court’s Proposed Solution
To address the “leaks” concerns, the Judge issues an “Order” on January 14, 2016, (Doc. 1078) to “enforce the mediation privilege.” In such Order he requires multiple “representatives, counsel and financial advisers” of six parties to file declarations under penalty of perjury in a form the Judge supplies.
The Judge’s form contains the following language to be followed by each of the declarants:
–[I have not had any contact concerning Molycorp with Jodi Xu Klein, Fion Li, Steven Church, or any reporter for Bloomberg within 60 days of the date of this Order.]
–[I have had contact(s) concerning Molycorp with Jodi Xu Klein, Fion Li, Steven Church, or another reporter for Bloomberg in the past 60 days, and list the date(s) of each such contact below. I hereby provide the attached description(s) and/or documentation, which are sufficient to identify all information concerning Molycorp communicated in connection with such contact(s).]
–[I am not aware of the source(s) of previously non-public information concerning Molycorp that was published by Bloomberg on December 11, 2015, December 15, 2015 and/or January 5, 2016.]
–[I am aware of the source(s) of previously non-public information concerning Molycorp that was published by Bloomberg on December 11, 2015, December 15, 2015 or January 5, 2016. I hereby provide the attached description(s) and/or documentation, which are sufficient to disclose all information I possess concerning the source(s) of previously non-public information concerning Molycorp that was published by Bloomberg on December 11, 2015, December 15, 2015, and January 5, 2016.]
–Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true and correct.
Yikes!!!
Bloomberg Enters the Scene
Bloomberg, of course, isn’t going to allow such a First Amendment challenge to pass without a fight:
–The next day (January 15, 2016), Bloomberg files its “Emergency Motion to Stay, Reconsider, and Intervene” in the Bankruptcy Court (Doc. 1104).
–It’s not clear from the record what happens next on Bloomberg’s Emergency Motion, but the Bankruptcy Court must have denied it, because an appeal follows (see Doc. 1121).
–On January 19, 2016, Bloomberg files a Notice of Appeal, along with an “Emergency Motion to Stay Pending Appeal,” in Delaware’s U.S. District Court (at Case No. 1:16-cv-00021).
Four Parties Comply with Order
Four parties file their Court-ordered declarations on January 19, 2016:
Official Committee of Unsecured Creditors (Doc. 1117);
Molycorp, Inc. (Doc. 1124);
OCM MLYCo CTB Ltd. (Doc. 1127); and
Ad Hoc 10% Noteholders (Doc. 1129).
All such declarations are filed “under seal,” as authorized by the Court, and are not available to the public.
The District Court Begins to Act
On the next day (January 20, 2016), the U.S. District Court issues the following orders:
–“The Court will hear oral argument on Emergency Motion to Stay today, 1/20/2016, at 4:00 PM”; and then
–“The Court understands the Bankruptcy Court has set a hearing for today at 2 p.m. concerning issues relevant to the pending Emergency Motion. The parties are advised to call Chambers immediately after that hearing concludes and to update Chambers as to any relevant decisions of the Bankruptcy Court.”
A copy of this latter entry also appears on the Bankruptcy Court’s In re Molycorp record at Doc. 1133.
Bankruptcy Court Reverses Course
At Doc. 1135 the Bankruptcy Court reverses course and enters an Order “Granting” Bloomberg’s Emergency Motion to Stay, Reconsider and Intervene.
Later that same day (January 20, 2016), the following “Order” appears on the U.S. District Court’s docket:
–“The parties have contacted Chambers as directed by the Oral Order and have advised that the Appeal and Emergency Motion to Stay are moot at this time. The oral argument scheduled for 4:00 p.m. today is now cancelled.”
Conclusion
So . . . all’s well that ends well?
What does everyone think about this dust-up?
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