Opinion
No. 01-41571 J11, Chapter 11, Jointly Administered with Cases Nos. 01-41573 J11, 01-41574 J11, 01-41575 J11, 01-41576 J11
June 18, 2001
MEMORANDUM AND ORDER DENYING APPLICATIONS TO SEAL
The court has received applications from General Electric Capital Corporation, as Agent ("GECC"), and from Software Logistics Corporation, the above debtor (the "debtor"), to seal various documents pursuant to Bankruptcy Code § 107(b) and Fed.R.Bankr.P. 9018. The documents relate to a cash collateral dispute between the parties. See § 363(c)(2).
All further section references herein are to the United States Bankruptcy Code, 11 U.S.C. § 101 et. seq.
GECC seeks to seal: (a) Declaration of Martin Murphy, submitted for filing May 21, 2001, (b) Declaration of Paul Boston, submitted for filing on May 21, 2001, (c) Declaration of Martin M. Murphy in Support of Objection, filed June 12, 2001, and (d) Supplement to the Objection of GE Capital to the Debtors' Motion for Authority to Use of Cash Collateral and Declaration of Martin M. Murphy, filed June 14, 2001. The debtor seeks to seal: (a) Declaration of William P. Downey, filed June 14, 2001, and (b) Declaration of Michaela Cassidy, filed June 14, 2001.
GECC's moving papers state that the materials it seeks to seal include items that the debtor has marked "Confidential" or which the debtor may contend are "trade secrets, or other confidential research, development or commercial information" within the meaning of § 107(b) and Fed.R.Bankr.P. 9018. The debtor's moving papers allege that the documents include documents that the debtor has marked "Confidential" and that such documents contain "trade secrets, or other confidential research, development, or commercial information."
Section 107 provides:
(a) Except as provided in subsection (b) of this section, a paper filed in a case under this title and the dockets of a bankruptcy court are public records and open to examination by an entity at reasonable times without charge.
(b) On request of a party in interest, the bankruptcy court shall, and on the bankruptcy court's own motion, the bankruptcy court may —
(1) protect an entity with respect to a trade secret or confidential research, development, or commercial information; or
(2) protect a person with respect to scandalous or defamatory matter contained in a paper filed in a case under this title.
Section 107 is supplemented by Fed.R.Bankr.P. 9018, which provides:
On motion or on its own initiative, with or without notice, the court may make any 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, (2) to protect any entity against scandalous or defamatory matter contained in any paper filed in a case under the Code, or (3) to protect governmental matters that are made confidential by statute or regulation. If an order is entered under this rule without notice, any entity affected thereby may move to vacate or modify the order, and after a hearing on notice the court shall determine the motion.
Here, the moving papers filed by the debtor and GECC contain no facts, but merely conclusory allegations that the papers in question qualify for sealing under § 107(b) and Fed.R.Bankr.P. 9018. The court has reviewed each of the documents at issue, and has concluded that none of them contains any trade secrets, or any research or development information that justifies an exception to the general rule prescribed by § 107(a) that papers filed in a bankruptcy case are "public records and open to examination."
If, then, the documents are to be sealed, the court must find that they contain confidential "commercial information." Several courts have defined confidential "commercial information" as information that would provide an "unfair advantage" to competitors. See In re Itel Corp., 17 B.R. 942, 944 (9th Cir. BAP 1982); In re Orion Pictures Corp., 21 F.3d 24, 27 (2d Cir. 1994).
After review, the court sees nothing in the papers that might afford any entity with an unfair competitive advantage. Rather, the papers contain cost breakdowns, asset values, budgets, projections, balance sheets, and income statements of the type that are routinely filed publicly by debtors in chapter 11 cases, and routinely introduced into evidence at cash collateral hearings conducted under § 363(c). If "garden variety" financial information of this type must be sealed, the circumstances under which public access to information may be denied in a chapter 11 case, as embodied in § 107(b), would obliterate the rule of general access embodied in § 107(a).
The court acknowledges the possibility that facts may be present of which the court is unaware, that may qualify the documents for sealing. Therefore, the court advised the parties on June 15, 2001, on the record in open court, that it will hold the documents in chambers until the close of business June 18, 2001, after which date they will be made public. If any party has specific information that would bring any of the documents, or any portions thereof, within the exception to § 107(a), or needs more time to assemble such information, the court will entertain further requests to seal documents, or for more time to prepare supplemental applications, on June 18, 2001, before the documents are made public.
ORDER
For the foregoing reasons, the foregoing applications to seal documents are denied without prejudice; said denial stayed through the close of business June 18, 2001.