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Current decisions, news and commentary regarding commercial bankruptcy cases in Delaware.
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Delaware Bankruptcy Court Denies Motion Seeking Turn Over of E-Mail Account
In an interesting cross of bankruptcy and e-discovery/privacy law, the Bankruptcy Court for the District of Delaware denied the turnover motion of the foreign representatives (the "Foreign Representatives") of Chapter 15 debtor, Irish Bank Resolution Corporation Limited ("IBRC") seeking the contents of a Yahoo! email account. The Court ruled that the foreign representatives failed to present evidence that the contents of the account were property of the estate pursuant to section 542 of the Bankruptcy Code.
In the 44 page decision dated November 7, 2016, Judge Sontchi refused to order the email service provider to turn over the contents of a private email account after the account user evaded the proceeding and failed comply with several discovery orders. The Foreign Representatives failed to present sufficient evidence that proved the contents of the Yahoo! account were part of IBRC's property or related to IBRC's property or financial affairs. The Court further held that the Stored Communication Act (the "SCA") prohibited the disclosure of information from a private email account without the actual user's consent. The Court found that the SCA and the case law interpreting the Act did not support compelling Yahoo! to disclose electronically stored information based on a theory of imputed consent or by designation of a third-party as the "subscriber". A copy of the opinion may be found here.