Federal Judge Rules Apportionment Statute May Broaden Scope of Discovery

In Post-Confirmation Committee for Small Loans, Inc. v. Martin, 2014 WL 5901492 (M.D.Ga.), a motion to compel discovery filed by the defendants sought to compel the plaintiff to produce the identity of, and discoverable information with respect to, any person or entity that is not a party to this suit but whose conduct the plaintiff contends contributed to the injury or damages associated with the various breach-of-fiduciary-duty claims alleged in the plaintiff’s complaint. Specifically, the defendants sought disclosure of the identities of “certain professionals” involved in the debtors’ loss. Plaintiff alleged in the complaint that the defendants’ looting of the debtors’ assets, “as well as a confluence of other factors (including, among other things, the malpractice of certain professionals not the subject of this complaint), led to the downfall of the debtors and the loss of tens of millions of dollars of capital extended by Investors.” The defendants argued that the professionals’ malfeasant acts are relevant to their apportionment defense under Georgia law.

The court found that the referenced identities and information related thereto are relevant to the defendants’ defense. The alleged injury or damages are those suffered by the debtors allegedly by the looting of corporate assets by the defendants. The referenced portion of the plaintiff’s complaint opens the door to the reasonable conclusion that “certain professionals” contributed to the injuries or damages suffered by the debtors.