Opinion
Case No. 13-00229
12-13-2013
In re DOUGLAS BRUCE HIMMELFARB, Debtor.
SO ORDERED.
________________
United States Bankruptcy Judge
Chapter 11
Re: Docket No. 134
DISCOVERY ORDER
The debtor owns a painting which may or may not be a work by the late Mark Rothko. He believes that it is, but others apparently disagree, and the value of the painting depends largely on whether it is in fact a Rothko.
In an effort to determine who created the painting, the debtor obtained an order under Fed. R. Bankr. P. 2004 directing Marion Kahan to produce documents and testify at a deposition. Ms. Kahan manages certain documents and artworks held by Mr. Rothko's estate and his children. Ms. Kahan has complied with the order but has designated virtually all of her production and testimony as confidential.
The debtor wishes to argue that the presence of certain materials in Ms. Kahan's files implies that his painting is a Rothko. Ms. Kahan and the Rothko family do not wish to be drawn into any disputes about the debtor's painting and do not want to create any perception that they are supporting his claims. They understandably worry that, if they do or say anything that suggests they think the painting is or isn't authentic, they might be sued.
Rule 2004 broadly permits the debtor and other parties in interest to investigate, among other things, "any matter which may affect the administration of the debtor's estate." Ms. Kahan and the Rothko family do not dispute the debtor's right to examine their records and ask them questions about the painting, but they do oppose the debtor's disclosure and use of the information which they provide.
The court has the power to quash or modify a subpoena issued under rules 2004 and 9016 and Fed. R. Civ. P. 45(d)(3)(B) to protect a witness' "confidential research, development, or commercial information."
In balancing the debtor's need for this information against the interests of Ms. Kahan and the Rothko family, it is important to recognize that there is no pending litigation between the debtor and Ms. Kahan or the Rothkos and (as far as the record reveals) no pending litigation about the painting. The debtor does not seek discovery for traditional litigation purposes; instead, he seeks information about the painting in an attempt to maximize the value of the painting and the value of his bankruptcy estate. Because the debtor's purposes are essentially commercial, it is appropriate to give Ms. Kahan and the Rothkos as much protection as is possible. The debtor has every right (indeed, as a debtor in possession in a chapter 11 case, he has the legal duty) to maximize the value of his assets, but he has no right to expose third parties to risk in doing so.
In order to balance these interests, IT IS HEREBY ORDERED that the debtor may produce to third parties prints made from the photographic negative produced by Ms. Kahan which purports to represent the debtor's painting only if he simultaneously provides (prominently and in writing) the following disclaimer:
The attached image(s) are from a photographic negative produced to the Owner by Marion Kahan in 2013, in response to a subpoena seeking all material that may relate to the work held by the Owner. Since 1987, Ms. Kahan has been the manager for the "Rothko Collection," meaning the Estate of Mark Rothko under the custodianship of his children, Kate Rothko Prizel and Christopher Rothko. In that capacity, she is responsible for the handling of loans, storage, condition reports, research and archives, cataloging of works,All other documents and testimony provided by Ms. Kahan or the Rothkos shall remain confidential.
and archiving of papers pertaining to the artist's life and work. Ms. Kahan and the Rothko family believe that the mere presence of materials in Ms. Kahan's possession is not an indication that those materials originated from the artist or his family. Ms. Kahan and the Rothko family are not in the business of authenticating Mark Rothko paintings or other works of art, and they do not undertake to do so here. Ms. Kahan and the Rothko family do not make any representation or warranty of any kind and they expressly disclaim liability for anyone's use of the information which they provided to the Owner. They specifically caution against drawing any undue inference of authenticity based on Ms. Kahan's possession of the photographic negative. Any party purchasing Owner's painting is responsible to conduct such party's own due diligence and arrive at its own conclusions about its authenticity.