Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

A debtor, his wife, and sister ("appellants") sought to reopen debtor's Chapter 7 bankruptcy case for the purpose of pursuing an adversary proceeding against the trustee of debtor's estate and one of the trustee's bondholders. At issue was whether the district court properly determined that the bankruptcy court did not abuse its discretion in denying appellants' motion to reopen and properly dismissed appellants' complaint. The court held that the bankruptcy court acted well within its discretion in denying the motion where the adversary claims against the trustee were entirely without merit. The court also held that, in light of the meritless appeal, appellants and their counsel were ordered to show cause as to why they should not be sanctioned.

K&L Gates LLP ("K&L Gates") filed a motion to lift two protective orders prohibiting disclosure of communications made during mediation. Savage & Associates, P.C. ("Savage") filed a cross-motion to enjoin K&L Gates from raising questions about the validity of certain provisions of a settlement agreement as a defense to malpractice in a related action. At issue was whether the district court properly denied both K&L Gates' motion and Savage's cross-motion. The court held that the district court did not err in the denial of K&L Gates' motion where K&L Gates failed to demonstrate a compelling need for the discovery, failed to show that the information was not otherwise available, and failed to establish that the need for the evidence was outweighed by the public interest in maintaining confidentiality. The court also held that the district court did not err in holding that K&L Gates was not barred from asserting a defense challenging the validity of any provision of the settlement agreement in connection with the related malpractice action currently pending against the law firm.