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Fritz, Attorney
Category: Bankruptcy Law
Satisfied Customers: 302
Experience:  Florida attorney with extensive experience in Chapter 7 and Chapter 13 consumer bankruptcy cases
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I have a question about a 2004 examination in a bankruptcy

Resolved Question:

I have a question about a 2004 examination in a bankruptcy hearing.

Consider the following:
1. An order is issued for a 2004 examination against a petitioning creditor in an involuntary bankruptcy.
2. No subpoena was issued--just an order.
3. The person being ordered to attend the 2004 exam now lives 500 miles away from the district where the hearing is scheduled.
4. It's not practical to attend the exam so it won't be attended.

Can they file something showing it's not practical to show up for the hearing?
If they decide not to show will there be civil contempt penalties even if they live 500 miles away? Is there ever a criminal penalty for not showing up? Does the fact no subpoena was issued change anything? Or is a court order just as strong as a subpoena?
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  Fritz replied 4 years ago.

Fritz :

Hi, I'd like to help you with your bankruptcy questions today.


Expert:  Fritz replied 4 years ago.
Do you know whether the petitioning creditor could appear telephonically?
Customer: replied 4 years ago.
The petitioning creditor doesn't want to appear at all and is looking for an excuse not to. Any questions they have he wants to consider confidential and proprietary information. Can this be a defense to not appear?
Expert:  Fritz replied 4 years ago.

Although the allowed scope of a Rule 2004 exam is broad, there are limitations to a court's subpoena power. Rule 45(c)(3)(A)

Federal Rule of Civil Procedure 45(c)(3):

(3) Quashing or Modifying a Subpoena.

(A) When Required. On timely motion, the issuing court must quash or modify a subpoena that:

(i) fails to allow a reasonable time to comply;

(ii) requires a person who is neither a party nor a party's officer to travel more than 100 miles from where that person resides, is employed, or regularly transacts business in person-except that, subject to Rule 45(c)(3)(B)(iii), the person may be commanded to attend a trial by traveling from any such place within the state where the trial is held;

(iii) requires disclosure of privileged or other protected matter, if no exception or waiver applies; or

(iv) subjects a person to undue burden.

(B) When Permitted. To protect a person subject to or affected by a subpoena, the issuing court may, on motion, quash or modify the subpoena if it requires:

(i) disclosing a trade secret or other confidential research, development, or commercial information;

(ii) disclosing an unretained expert's opinion or information that does not describe specific occurrences in dispute and results from the expert's study that was not requested by a party; or

(iii) a person who is neither a party nor a party's officer to incur substantial expense to travel more than 100 miles to attend trial.

Expert:  Fritz replied 4 years ago.

So the answer to your question is yes, it may be a defense pursuant to Rule 45(c)(3)(B)(i), "disclosing a trade secret or other confidential research, development, or commercial information," and possibly others.

The key here is that you would need to timely file a Motion to Quash and/or Motion to Modify within a very short period of time after being noticed. I would suggest that you consult a local attorney as soon as possible to discuss these issues.

If you were, in fact, never served with a subpoena, that could be another potential defense. However, it's extremely risky to simply ignore the Notice of the 2004 Examination on those grounds, as your case could simply be dismissed.

Customer: replied 4 years ago.
I read that, but I need more info.

1. Is the petitioning creditor a "party"? Can they claim they don't have to travel because it's too far? Or is a petitioning creditor considered a "party"
2. A subpoena was not issued--just an order. Is there a difference between a subpoena and an order? Once an order is issued to attend a 2004 examination is that a subpoena?

The petitioning creditor now wants the case to be dismissed, but just doesn't want to be held in contempt.

Are the steps the same to quash an order as they are to quash a subpoena?
Expert:  Fritz replied 4 years ago.

1) I want to say yes, but I don't see anything in the Code explicitly stating that petitioning creditors are parties. Let me find something more concrete for you.

2) If an Order was issued, the petitioning creditor will likely be held in contempt for failing to appear at the 2004 Examination.

Typically, the Debtor would have needed to file some kind of Motion for an Order to be entered. Was there anything like that filed?

Customer: replied 4 years ago.
Yes a motion for order was filed and an order was signed.

If an order is issued, but not a subpoena, what is the difference between the two? in the past I've seen both, but this time it's only an order without a subpoena.
Expert:  Fritz replied 4 years ago.
My gut reaction is that the Court assumes you consented to the Court's jurisdiction by bringing the case where you did. To give you a crystal clear answer on this, I'd have to conduct additional legal research, which is outside the scope of the services I'm able to provide in this forum.
Expert:  Fritz replied 4 years ago.
I would strongly recommend that the petitioning creditor retain a local attorney to assist with the case if it hasn't been done already. Based on what I've heard, there is a real possibility that the petitioning creditor could face sanctions and/or dismissal of the bankruptcy petition (which alone could result in the petitioning creditor having to pay compensatory and punitive damages, attorney's fees, and costs).
Expert:  Fritz replied 4 years ago.

The Code uses the term "entity" in lieu of "party." An "entity" includes person, estate, trust, governmental unit, and United States trustee.

Rule 2004:

(a) Examination on Motion. On motion of any party in interest, the court may order the examination of any entity.


(c) Compelling Attendance and Production of Documentary Evidence. The attendance of an entity for examination and for the production of documents, whether the examination is to be conducted within or without the district in which the case is pending, may be compelled as provided in Rule 9016 [Federal Rule of Civil Procedure 45] for the attendance of a witness at a hearing or trial...


(e) Mileage. An entity other than a debtor shall not be required to attend as a witness unless lawful mileage and witness fee for one day's attendance shall be first tendered. If the debtor resides more than 100 miles from the place of examination when required to appear for an examination under this rule, the mileage allowed by law to a witness shall be tendered for any distance more than 100 miles from the debtor's residence at the date of the filing of the first petition commencing a case under the Code or the residence at the time the debtor is required to appear for the examination, whichever is the lesser.

Was the lawful mileage and witness fee for one day's attendance at the 2004 Exam already tendered? If not, that might be another potential defense.

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