11-22820-rdd

Doc 242

Filed 02/10/12 Entered 02/10/12 15:59:06 Pg 1 of 11

Main Document

PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica, Boulevard, 11th Floor Los Angeles, California 90067 Telephone: (310) 277-6910 Facsimile: (310) 201-0760 James I. Stang, Esq. (admitted pro hac vice) -and780 Third Avenue, 36th Floor New York, New York 10017 Telephone: (212) 561-7700 Facsimile: (212) 561-7777 Ilan D. Scharf, Esq. Counsel for the Official Committee of Unsecured Creditors of The Christian Brothers Institute and The Christian Brothers of Ireland, Inc. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK Chapter 11 In re: Case No. 11-22820 (RDD) THE CHRISTIAN BROTHERS INSTITUTE, et al., (jointly administered) Debtors. EX PARTE MOTION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR ORDER AUTHORIZING COMMITTEE TO FILE DOCUMENTS UNDER SEAL TO: THE HONORABLE ROBERT D. DRAIN UNITED STATES BANKRUPTCY JUDGE: The Official Committee of Unsecured Creditors (the Committee) of The Christian Brothers Institute (CBI) and The Christian Brothers of Ireland, Inc. (CBOI and, collectively with CBI, the Debtors), the debtors and debtors in possession in the above-captioned cases (the Cases) under chapter 11 of Title 11 of the United States Code (the Bankruptcy Code), by and through his undersigned counsel, hereby moves (the Motion to Seal) this Court for an order, pursuant to sections 105(a) and 107(b) of the Bankruptcy Code and Rule 9018 of the

DOCS_NY:26567.1

11-22820-rdd

Doc 242

Filed 02/10/12 Entered 02/10/12 15:59:06 Pg 2 of 11

Main Document

Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules), authorizing the Committee to file certain documents under seal. In support of the Motion to Seal, the Committee respectfully represents follows: RELEVANT FACTS A. Background Facts 1. On April 28, 2011 (the Petition Date), each of the Debtors commenced

their Cases by filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code. Pursuant to sections 1107(a) and 1108 of the Bankruptcy Code, the Debtors continue to operate as debtors in possession. 2. On May 11, 2011 the United States Trustee for Region 2 (the U.S.

Trustee) appointed six members to the Committee. On May 23, 2011, the U.S. Trustee appointed a seventh member to the Committee. The Committee is comprised of seven individuals who are plaintiffs in cases pending against at least one of the Debtors in either Washington State or Canada. B. Sale Motion 3. On January 30, 2012, the Debtors filed the Debtors Motion for Orders

Pursuant to Sections 105(a) and 363 of the Bankruptcy Code and Bankruptcy Rule 6004 Approving (I) Sale Procedures and Notice of the Auction Relating Thereto, (II) Sale of Real Estate to Iona Preparatory School or a Party Making a Higher and Better Offer Free and Clear of Liens, Claims, Interests and Encumbrances, (III) Approving the Stalking Horse Purchase Agreement, and (IV) Granting Related Relief (the Sale Motion). Through the Sale Motion, the Debtors week to sell two properties on Stratton Road in New Rochelle (as defined in the Sale Motion, the Properties).

2
DOCS_NY:26567.1

11-22820-rdd

Doc 242

Filed 02/10/12 Entered 02/10/12 15:59:06 Pg 3 of 11

Main Document

4.

The Committee is filing an objection (the Objection) to the Sale Motion

contemporaneously herewith. The Objection includes exhibits of documents that were either produced on a confidential basis by the Debtors or refer to information from documents produced on a confidential basis and provide details regarding the value of properties the Debtors seek to sell pursuant to the Sale Motion (the Confidential Material). Specifically the Confidential Material includes appraisals of the Properties as of January 2011 and April 2011. The Committee believes that any documents disclosing appraised values of a property for sale should be maintained as confidential prior to any marketing of the property. RELIEF REQUESTED 5. By this Motion to Seal, the Committee respectfully requests entry of an

order authorizing it to file the Confidential Material under seal. The Confidential Material includes information that is confidential commercial information. Thus, public disclosure of the Confidential Material is not appropriate at this time.1 PREDICATES FOR RELIEF/REQUESTED 6. The predicates for the relief requested herein are sections 105(a) and

107(b) of the Bankruptcy Code and Rule 9018 of the Bankruptcy Rules. JURISDICTION AND VENUE 7. This Court has jurisdiction to consider this Motion pursuant to 28 U.S.C.

1334, and this is a core proceeding pursuant to 28 U.S.C. 157(b). Venue is proper in this District pursuant to 28 U.S.C. 1480 and 1409.

The Committee has provided an unredacted copy of the Objection and all exhibits thereto to the Court and the Debtors.

3
DOCS_NY:26567.1

11-22820-rdd

Doc 242

Filed 02/10/12 Entered 02/10/12 15:59:06 Pg 4 of 11

Main Document

BASIS FOR RELIEF REQUESTED 8. Section 107(b) of the Bankruptcy Code provides bankruptcy courts with

power to issue orders that will protect entities from potential harm: On request of a party in interest, the bankruptcy court shall, and on the bankruptcy courts own motion, the bankruptcy court may (1) protect an entity with respect to a trade secret or confidential research, development, or commercial information; or protect a person with respect to scandalous or defamatory matter contained in a paper filed in a case under this title[.]

(2)

11 U.S.C. 107(b). 9. Bankruptcy Rule 9018 defines the procedure by which a party may move

for relief under section 107(b): On motion or on its own initiative, with or without notice, the court may make an order which justice requires (1) to protect the estate or any entity in respect of a trade secret or other confidential research, development, or commercial information [or] (2) to protect any entity against scandalous or defamatory matter contained in any paper filed in a case under the Code. . . . Fed. R. Bankr. P. 9018. 10. This Court has inherent authority to seal testimony and enter orders of

confidentiality. See In re Robert Landau Assocs., 50 B.R. 670, 677 (Bankr. S.D.N.Y. 1985). In issuing a protective order pursuant to section 107(b), [t]he court determines whether the subject documents fall within the provisions of 107(b) and the appropriate remedy if they do. In re Barneys, Inc., 201 B.R. 703, 707 (Bankr. S.D.N.Y. 1996). If the court determines that the documents in question fall within the parameters of section 107(b), the court is required to

4
DOCS_NY:26567.1

11-22820-rdd

Doc 242

Filed 02/10/12 Entered 02/10/12 15:59:06 Pg 5 of 11

Main Document

protect a requesting interested party and has no discretion to deny the application. In re Orion Pictures Corp., 21 F.3d 24, 27 (2d Cir. 1994) (emphasis in original). 11. A courts determination of whether to authorize a party to file documents

under seal is based upon a totality of the circumstances. In re Gitto/Global Corp., 2005 WL 396327 *3, Case No. 04-45386 (Bankr. D.Mass., Feb. 9, 2005) (citing Phar-Mor, Inc. v. Defendants Named Under Seal (In re Phar-Mor, Inc.), 191 B.R. 675, 678 (Bankr. N.D. Ohio 1995). In determining what sort of information is protected by section 107(b), one court has recognized that the term commercial information is broad, including information that, if put in certain creditors hands, could have the ability to affect the market in which [creditors] might sell their claims, by what they disclose about the negotiations, and have a chilling effect on negotiations, ultimately affecting the viability of the Debtors. In re Lomas Fin. Corp., No. 90 Civ. 7827 (LLS), 1991 WL 21231, at *2 (S.D.N.Y. 1991); accord Barneys, 201 B.R. at 707708. 12. The Committee is filing an objection (the Objection) to the Sale Motion.

The Objection includes exhibits of documents that were either produced on a confidential basis by the Debtors or refer to information from documents produced on a confidential basis and provide details regarding the value of properties the Debtors seek to sell pursuant to the Sale Motion (the Confidential Material). Specifically the Confidential Material includes appraisals of the Properties as of January 2011 and April 2011. NOTICE 13. need be given. In accordance with Bankruptcy Rule 9018, no notice of this Motion to seal

5
DOCS_NY:26567.1

11-22820-rdd

Doc 242

Filed 02/10/12 Entered 02/10/12 15:59:06 Pg 6 of 11

Main Document

WHEREFORE, the Committee respectfully requests that the Court (i) enter an order, substantially in the form annexed hereto as Exhibit B, and the relief requested herein and (ii) grant such other and further relief as the Court deems just and proper.

Dated: New York, New York February 10, 2012

PACHULSKI STANG ZIEHL & JONES LLP

/s/ Ilan D. Scharf Ilan D. Scharf, Esq. 780 Third Avenue, 36th Floor New York, NY 10017-2024 Telephone: (212) 561-7700 Facsimile: (212) 561-7777 -andJames I. Stang, Esq. (admitted pro hac vice) 10100 Santa Monica Blvd., Suite 1100 Los Angeles, California 90067-4100 Telephone: (310) 277-6910 Facsimile: (310) 201-0760 Counsel for the Official Committee of Unsecured Creditors of The Christian Brothers Institute and The Christian Brothers of Ireland, Inc.

6
DOCS_NY:26567.1

11-22820-rdd

Doc 242

Filed 02/10/12 Entered 02/10/12 15:59:06 Pg 7 of 11

Main Document

EXHIBIT A
(Declaration Ilan D. Scharf)

DOCS_NY:26567.1

11-22820-rdd

Doc 242

Filed 02/10/12 Entered 02/10/12 15:59:06 Pg 8 of 11

Main Document

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK Chapter 11 In re: Case No. 11-22820 (RDD) THE CHRISTIAN BROTHERS INSTITUTE, et al., (jointly administered) Debtors. DECLARATION OF ILAN D. SCHARF, PURSUANT TO LOCAL BANKRUPTCY RULE 9077-1, IN SUPPORT OF EX PARTE MOTION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR ORDER AUTHORIZING COMMITTEE TO FILE DOCUMENTS UNDER SEAL I, Ilan D. Scharf, hereby declare and state as follows: 1. I am an attorney at law admitted to practice before this Court and a partner

in the firm of Pachulski Stang Ziehl & Jones LLP, counsel to The Official Committee of Unsecured Creditors (the Committee) of The Christian Brothers Institute (CBI) and the Christian Brothers of Ireland, Inc. (CBOI and, collectively with CBI, the Debtors), the debtors and debtors in possession in the above-captioned cases (the Cases) under chapter 11 of Title 11 of the United States Code (the Bankruptcy Code). 2. I submit this declaration in support of the Ex Parte Motion of the Official

Committee of Unsecured Creditors for Order Authorizing Committee to File Documents Under Seal dated February 10, 2012 (the Motion to Seal). 3. The Committee is filing an objection (the Objection) to the Sale Motion

contemporaneously herewith. 2 The Objection includes exhibits of documents that were either produced on a confidential basis by the Debtors or refers to information from documents produced on a confidential basis.

Capitalized terms used but not defined herein shall have the meanings and definitions ascribed to them in the Motion to Seal.

DOCS_NY:26567.1

11-22820-rdd

Doc 242

Filed 02/10/12 Entered 02/10/12 15:59:06 Pg 9 of 11

Main Document

4.

Through the Motion to Seal, the Committee seeks entry of an order

authorizing the Committee to file Confidential Material under seal because it contains commercially sensitive information. 5. Motion. Pursuant to 28 U.S.C. 1746, I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Dated: New York, New York February 10, 2012 /s/ Ilan D. Scharf Ilan D. Scharf Based on the foregoing, cause exists to grant the relief requested in the

2
DOCS_NY:26567.1

11-22820-rdd

Doc 242

Filed 02/10/12 Entered 02/10/12 15:59:06 Pg 10 of 11

Main Document

EXHIBIT B
(Proposed Order) UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK Chapter 11 In re: Case No. 11-22820 (RDD) THE CHRISTIAN BROTHERS INSTITUTE, et al., (jointly administered) Debtors. ORDER AUTHORIZING COMMITTEE TO FILE DOCUMENTS UNDER SEAL Upon the Ex Parte Motion of the Official Committee of Unsecured Creditors for Entry of an Order Authorizing the Committee to File Documents Under Seal (the Motion to Seal);1 and upon the Declaration of Ilan D. Scharf (the Scharf Declaration) attached to the Motion to Seal as Exhibit A; and the Court having jurisdiction to consider the Motion to Seal and the relief requested therein pursuant to 28 U.S.C. 157 and 1334; and consideration of the Motion to Seal and the relief requested therein being a core proceeding pursuant to 28 U.S.C. 157(b); and venue being proper before this Court pursuant to 28 U.S.C. 1408 and 1409; and the Court having determined that the legal and factual bases set forth in the Motion to Seal and the Scharf Declaration establish just cause for the relief granted herein; and after due deliberation and sufficient cause appearing therefor, it is hereby ORDERED that 1. 2. The relief requested in the Motion to Seal is hereby granted. Pursuant to 11 U.S.C. 105(a) and 107(b) and Fed. R. Bankr. P. 9018,

the Committee is authorized to file unredacted copies of the Confidential Material under seal.

Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Motion to Seal.

DOCS_NY:26567.1

11-22820-rdd

Doc 242

Filed 02/10/12 Entered 02/10/12 15:59:06 Pg 11 of 11

Main Document

3.

The unredacted Confidential Material shall remain confidential, be filed

under seal, and shall be served on and made available only to the Debtors, the Committee, and such other parties as ordered by this Court or as agreed to in writing (including by email) by the Debtors and the Committee. 4. Except as otherwise agreed to by the Debtors and the Committee, any

pleadings filed by a third party in these Cases that reference or disclose any of the redacted information contained in the Confidential Material (and descriptions thereof) shall be filed under seal and served only on those parties authorized to receive the Confidential Material as provided for in paragraph 3 of this Order, and may also be filed in a redacted form whereby any references in such pleadings to the redacted information contained in the Confidential Material (and descriptions thereof) shall also be redacted in such third parties pleadings. 5. Pursuant to 11 U.S.C. 105(a) and 107(b) and Fed. R. Bankr. P. 9018,

any parties filing pleadings in these Cases that reference or disclose any of the redacted information contained in the Confidential Material (and descriptions thereof) are hereby authorized to file such pleadings under seal consistent with the terms of paragraph above, unless otherwise ordered by this Court. Dated: White Plains, New York February __, 2012

UNITED STATES BANKRUPTCY JUDGE

DOCS_NY:26567.1