Production of Documents


The following is a summary of a Minnesota bankruptcy case or a case relevant to Minnesota bankruptcy law.

Minnesota Bankruptcy Case:

Gustafson v. Seaver (In re Hecker), 2010 WL1875553 (D. Minn. 5/10/10) (Davis, J.).

Case Summary:

5th Amendment Privilege Does Not Apply to Production of Documents

The trustee in the Hecker bankruptcy case sought to conduct a Rule 2004 examination of Gustafson, a long-time employee of a Hecker business entity who would have knowledge of Hecker’s financial or business affairs, and who had, within 30 days after Hecker filed bankruptcy, paid money that Hecker had owed to The Golf Club Scottsdale. Gustafson objected to the trustee’s motion for an order authorizing his rule 2004 examination on the basis that he was the target of a federal investigation involving fraud and money laundering, and that granting the trustee’s motion would violate his Fifth Amendment right against self-incrimination. The bankruptcy court granted the trustee’s motion over Gustafson’s objection. The trustee issued a subpoena under Rule 2004, requiring Gustafson to appear for an examination and produce various documents. Gustafson filed a motion to quash, asserting that the Fifth Amendment shielded him from the examination and from producing any documents. The bankruptcy court denied his motion. Gustafson filed a notice of appeal and a motion to stay execution of the trustee’s subpoena pending the appeal. The bankruptcy court denied the stay request, holding that Gustafson had the right to assert the privilege in response to particular questions or documents but not to assert a blanket privilege.

The district court determined Gustafson’s appeal to be interlocutory because the bankruptcy court order denying the motion to quash did not leave the bankruptcy court with nothing to do but execute the order. The order only allowed the trustee to proceed in his investigation. The district court could not predict whether Gustafson would assert the Fifth Amendment and refuse to produce certain documents or answer certain questions, or whether there would be a contempt proceeding, or what the outcome of that proceeding would be. The district court decided not to exercise its discretion to hear the interlocutory appeal under 28 U.S.C. § 1292(b). The court noted the limited record, the possibility of ongoing proceedings, and that the bankruptcy court was correct in refusing to quash the entire subpoena based on a vague, blanket assertion of the Fifth Amendment.

Credit: The preceding was a summary of a case relevant to Minnesota bankruptcy law. The case summary was prepared by the U.S. Bankruptcy Court through Judge Robert J. Kressel & attorney Faye Knowles.