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In re: Chapter 11
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THE WEINSTEIN COMPANY HOLDINGS Case No. 18-10601 (MFW)
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LLC, et al.,
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Jointly Administered
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Debtors.1
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Re: Docket No. 689
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captioned debtors and debtors in possession (the “Debtors”) hereby submits this emergency
motion (this “Motion”) in respect of amended discovery propounded upon counsel for the
Committee on Thursday, May 3, 2018, at 11:31 p.m. Eastern time, by counsel to the Debtors.2
The discovery relates to the Debtors’ Motion for Entry of Orders (I)(A) Approving Bidding
Procedures for Sale of Substantially All of the Debtors’ Assets, (B) Approving Stalking Horse
Bid Protections, (C) Scheduling Auction for, and Hearing to Approve, Sale of Substantially All of
the Debtors’ Assets, (D) Approving Form and Manner of Notices of Sale, Auction and Sale
1
The last four digits of The Weinstein Company Holdings LLC’s federal tax identification number are (3837). The
mailing address for The Weinstein Company Holdings LLC is 99 Hudson Street, 4th Floor, New York, New York
10013. Due to the large number of debtors in these cases, which are being jointly administered for procedural
purposes only, a complete list of the Debtors and the last four digits of their federal tax identification numbers is not
provided herein. A complete list of such information may be obtained on the website of the Debtors’ claims and
noticing agent at http://dm.epiq11.com/twc.
2
Counsel to the Debtors initially propounded discovery upon counsel to the Committee on Wednesday, May 2,
2018, at 10:47 p.m. Eastern time. After a meet and confer amongst the parties, the amended discovery was served
on May 3, 2018, at 11:31 p.m. Eastern time. Although narrower than the initial set of requests, the amended
discovery nonetheless remains objectionable.
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Hearing, (E) Approving Assumption and Assignment Procedures and (F) Granting Related
Relief and (II)(A) Approving Sale of Substantially All of the Debtors’ Assets Free and Clear of
All Liens, Claims, Interests and Encumbrances, (B) Approving Assumption and Assignment of
Executory Contracts and Unexpired Leases and (C) Granting Related Relief [Docket No. 8] (the
“Sale Motion”).
By this Motion, the Committee requests an order (1) quashing the Debtors’
representative on less than two business days’ notice for Monday, May 7, 2018 at 9:00 a.m.
Eastern time; and (2) striking the amended document requests (the “Document Requests” and
together with the Deposition Notice, the “Debtors’ Discovery”) served by the Debtors
demanding production of documents by the Committee by the date of such deposition (aside
from Document Request #6 – “All Documents the UCC intends to rely upon or otherwise use in
connection with its Objection at the Sale Hearing.”).3 The Deposition Notice is attached hereto
as Exhibit A and the Document Requests are attached hereto as Exhibit B. A proposed form of
order approving this Motion is attached hereto as Exhibit C. In support of this Motion, the
Preliminary Statement
1. The Committee has filed a preliminary objection to the Sale Motion and
intends to file a supplement thereto, both of which are narrow in scope. In the filed objection,
the Committee raised: (a) purchase price allocation issues to protect value for unsecured
creditors, (b) the need to preserve the Debtors’ books and records for use by the estates and any
future litigation trustee, and (c) the impropriety of selling the Debtors’ avoidance actions. A
3
The Committee will produce documents responsive to Document Request #6, if any, promptly after such
documents become available.
2
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supplemental objection will address any viable overbids (if such overbids are presented) that
should be considered by the Court with good cause for a late submission – all with the goal of
2. The Debtors’ Discovery has nothing to do with the filed objection and
appears to be punitive and harassing in nature (especially given the timing of it), and not targeted
to any issues relevant to the disputes at issue with respect to the Sale Motion. The Debtors’
intimidate the Committee against any possible support for a viable overbidder – an
unconscionable tactic by a fiduciary. Among other things, the Debtors seek information and
listing by former officer and director Harvey Weinstein, and analyses performed by the
Committee regarding the Lantern bid, the Inclusion Media Expression of Interest,4 and the assets
and liabilities of the Debtors’ estates.5 See Deposition Notice at Topic #3 and Document
Requests at Request #3 (“All Communications between or among the UCC and any Unsecured
Creditors, including but not limited to Alleged Victims, concerning the Lantern Bid and/or the
Inclusion Media Expression of Interest.”), Topic #4 and Request #4 (“All Documents and
Communications concerning the UCC’s evaluation of (i) the Lantern Bid, (ii) any other bid filed
in connection with the Sale and (iii) the “alternatives” to the Lantern Bid referred to in the
Objection, including but not limited to liquidation and/or the Inclusion Media Expression of
Interest.”), Topic #5 and Request #5 (“All Documents and Communications concerning the
4
There is no formal bid from Inclusion Media as yet and the Committee has not taken a position in support of any
such potential bid, hence there is no basis to conduct discovery on this point under current circumstances.
5
The time period covered by the Debtors’ Discovery is March 19, 2018, through the present. The Committee was
not even formed until March 28, 2018.
3
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(including, for the purpose of this request, unsecured creditors who are members of the UCC) or
group of unsecured creditors under (i) the Lantern Bid, (ii) any other bid filed in connection with
the Sale, and (iii) any of the “alternatives” referred to in the UCC Objection, including but not
limited to liquidation and/or the Inclusion Media Expression of Interest.”). None of the
foregoing is non-privileged and/or relevant to the Sale Motion. The Debtors’ Discovery also
conflict amongst the interests of victims/survivors and other unsecured creditors. Nothing could
be further from the truth. The Committee’s ultimate goal is to maximize value for all unsecured
creditors.
not what communications the Committee may have had with victims/survivors or how the
Committee allocates value from the Lantern bid, but rather how the Debtors and the bidder
intend to do so. The problem is that neither the Debtors nor Lantern has made a proposal in this
regard except to take the position that certain secured debt must be paid out of sale proceeds.
Specifically, based upon depositions of the Debtors’ and Lantern’s representative conducted
The Debtors have reached no conclusions regarding the amount of sale proceeds
that will be available to satisfy unsecured claims assuming that the Lantern sale
closes.
6
Certain deposition testimony was deemed confidential by the Debtors. The Committee is prepared to submit the
deposition transcripts or excerpts thereof to the Court in camera to the extent necessary.
4
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The Debtors have not conducted more than a superficial and incomplete lien
The Debtors do not know whether they will have an allocation of sale proceeds by
The Debtors have not done a current valuation of their film library, unreleased
Exhibit D and Exhibit E attached hereto are exhibits to the deposition transcripts that provide a
sense of the limited information that has been made available to the Committee to reach any
irrelevant and delves into privileged matters. The Committee does not currently have any non-
privileged document that it intends to use in connection with any objection to the Sale Motion
that was not created by the Debtors or Lantern, or is otherwise publicly available, and therefore,
is already in the possession of the Debtors or Lantern. If any such additional non-privileged
document is identified or created, it will be produced to the Debtors. The communications that
the Committee has had with Lantern, Inclusion Media, and others have been conducted through
counsel, not the members of the Committee. There is no witness as of now that the Committee
can offer in response to the Deposition Notice knowledgeable about the topics listed, except
7
The Committee, MUFG Union Bank, and UnionBanCal Equities, Inc. have stipulated regarding certain of the
Committee’s challenge rights based on the Committee’s due diligence. [Docket No. 642].
5
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counsel to the Committee, and the testimony of such attorney would be highly constrained given
privilege limitations and irrelevant to the Committee’s objection. Of course, to the extent that
the Committee decides to call any witness or to use any document at the sale hearing, such
witness will be made available to the Debtors for deposition in advance and any such document
5. In sum, except for Document Request #6, the purpose of the Debtors’
Discovery is to harass and distract the Committee from the tasks at hand, rather than to identify
any possibly relevant and non-privileged information relating to the Committee’s filed objections
to the Sale Motion. For these reasons, the Debtors’ Discovery should be quashed and/or stricken
Relief Requested
Procedures (the “Federal Rules”), made applicable to this matter by Bankruptcy Rules 7026 and
9014(c), and Local Rules 7026-1 and 7030-1(c), the Committee requests a protective order,
substantially in the form attached hereto as Exhibit C, quashing the Deposition Notice and
striking the discovery embodied in the Document Requests (aside from Document Request #6 –
“All Documents the UCC intends to rely upon or otherwise use in connection with its Objection
7. Federal Rule of Civil Procedure 26 limits the discovery that a party may
obtain to “any nonprivileged matter that is relevant to any party’s claim or defense and
proportional to the needs of the case, considering the importance of the issues at stake in the
8
The Committee will produce documents responsive to Document Request #6, if any, promptly after such
documents become available.
6
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action, the amount in controversy, the parties’ relative access to relevant information, the parties’
resources, the importance of the discovery in resolving the issues, and whether the burden or
expense of the proposed discovery outweighs its likely benefit.” Fed. R. Civ. P. 26(b)(1)
(emphasis added).
The court may, for good cause, issue an order to protect a party or
person from annoyance, embarrassment, oppression, or undue
burden or expense, including … [by] forbidding the disclosure or
discovery….
Fed. R. Civ. P. 26(c)(1). The decision whether to enter a protective order lies within the Court’s
discretion. See, e.g., Pearson v. Miller, 211 F.3d 57, 65 (3d Cir. 2000). Courts can limit
discovery “if the parties seek duplicative or cumulative information ... or the burden outweighs
the benefit.” United States v. Federation of Physicians & Dentists, Inc., 63 F. Supp. 2d 475, 478
(D. Del. 1999). While the Federal Rules of Civil Procedure unquestionably allow broad
discovery, a right to discovery is not unlimited. Hickman v. Taylor., 329 U.S. 495, 507 (1947);
Hancock Indus. v. Schaeffer, 619 F. Supp. 322, 331 (E.D. Pa. 1985) (“Discovery, however, is not
to be a fishing expedition.”).
10. Here, the Debtors’ Discovery (except for Document Request #6) should be
7
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11. First, this Motion should be granted for failure to provide reasonable
notice. The timing of the Debtors’ Discovery served at 11:31 p.m. Eastern time on less than two
business days’ notice is unreasonable and impossible to achieve. Federal Rule 30(b)(1) requires
“reasonable written notice” to parties to attend a deposition. Importantly, Local Rule 7030-1
provides: “Unless otherwise ordered by the Court, ‘reasonable notice’ for the taking of
depositions under Fed. R. Civ. P. 30(b)(1) shall not be less than seven (7) days.” (emphasis
added). Less than two business days’ notice does not come close to satisfying the reasonableness
12. Second, this Motion should be granted because the Debtors’ Discovery
seeks information that is not relevant to the Sale Motion. The Committee’s objections are
narrowly focused on: (a) ensuring that value is properly allocated to unencumbered assets, and
(b) preserving the sanctity of the bidding process to ensure that all viable bids are thoroughly
considered. The Debtors’ Discovery is irrelevant to either category. As an example, the Debtors
and black-listing by former officer and director Harvey Weinstein, and analyses performed by
the Committee regarding the Lantern bid, the Inclusion Media Expression of Interest,9 and the
assets and liabilities of the Debtors’ estates. See Deposition Notice at Topic #3 and Document
Requests at Request #3 (“All Communications between or among the UCC and any Unsecured
Creditors, including but not limited to Alleged Victims, concerning the Lantern Bid and/or the
Inclusion Media Expression of Interest.”), Topic #4 and Request #4 (“All Documents and
Communications concerning the UCC’s evaluation of (i) the Lantern Bid, (ii) any other bid filed
9
As noted above, there is no formal bid from Inclusion Media as yet and the Committee has not taken a position in
support of any such potential bid, hence there is no basis to conduct discovery on this point under current
circumstances.
8
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in connection with the Sale and (iii) the “alternatives” to the Lantern Bid referred to in the
Objection, including but not limited to liquidation and/or the Inclusion Media Expression of
Interest.”), Topic #5 and Request #5 (“All Documents and Communications concerning the
(including, for the purpose of this request, unsecured creditors who are members of the UCC) or
group of unsecured creditors under (i) the Lantern Bid, (ii) any other bid filed in connection with
the Sale, and (iii) any of the “alternatives” referred to in the UCC Objection, including but not
13. Third, this Motion should be granted because the Debtors’ Discovery
seeks privileged information and documents, and little else. Communications amongst members
of the Committee and their counsel and/or members of the Committee and counsel to the
Committee are privileged and occurred with an expectation of privacy. See Sinohui v. CEC
Entm't, Inc., 2016 U.S. Dist. LEXIS 62481, **17-18 (C.D. Cal. May 11, 2016). Each of these
communications was made for the purpose of “facilitating the rendition of professional legal
services.” Post v. Killington, Ltd., 2009 U.S. Dist. LEXIS 6399, at *8-9 (D. Vt. Jan. 14, 2009)
(“Confidential communication between class members and counsel are protected by attorney-
client privilege. Confidential communications among class members made for the purpose of
privilege.”).
14. The Committee does not currently have any non-privileged document that
it intends to use in connection with any objection to the Sale Motion that was not created by the
Debtors or Lantern, or is otherwise publicly available, and therefore, is already in the possession
9
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created, it will be produced to the Debtors. The communications that the Committee has had
with Lantern, Inclusion Media, and others have been conducted through counsel, not the
members of the Committee. There is no witness as of now that the Committee can offer in
response to the Deposition Notice knowledgeable about the topics listed, except counsel to the
Committee, and the testimony of such attorney would be highly constrained given privilege
limitations and irrelevant to the Committee’s objection. However, to the extent that the
Committee decides to call any witness or to use any document at the sale hearing, such witness
will be made available to the Debtors for deposition in advance and any such document will be
produced.
15. The Committee is concerned that the motive behind the Debtors’
Committee from its preparation for the hearing on the pending Sale Motion. The intent to harass,
oppress, and annoy the Committee is highlighted by the noticing of a deposition and deadline to
16. Based on the foregoing, the Committee respectfully requests that this
Court issue an order quashing the Deposition Notice and striking the discovery sought in the
17. Pursuant to Federal Rule 26(c)(1), Bankruptcy Rule 7026, and Local Rule
7026-1, the undersigned attorneys certify that good faith efforts were made to reach agreement
on the matters that are the subject of this Motion. Counsel to the Committee has conferred with
counsel to the Debtors to resolve the disputes underlying this Motion and the discovery, but the
10
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parties were unable to reach agreement before filing this Motion became necessary under the
circumstances.
Notice
18. Notice of this Motion shall be given to (a) the Office of the United States
Trustee for the District of Delaware; (b) counsel to the Debtors; (c) counsel to Lantern; and (d)
any party that has requested notice pursuant to Bankruptcy Rule 2002 at the time of noticing.
quashing the deposition sought by the Debtors, (iii) striking the discovery sought by the Debtors
in the Document Requests (aside from Document Request #6 – “All Documents the UCC intends
to rely upon or otherwise use in connection with its Objection at the Sale Hearing.”),10 and
(iii) granting the Committee such other and further relief as the Court deems just and proper.
10
The Committee will produce documents responsive to Document Request #6, if any, promptly after such
documents become available.
11
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