This is a common question yet not fully addressed by us previously. In this session, we will make an attempt to define the scope and extent of Rule 2004 Examination. This is a very broad pre-litigation discovery device which allows examination of any person, under oath, on any matters which relate to the “acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor’s estate, or to the debtor’s right to discharge. A 2004 exam is a useful device for persons seeking more information than was obtained at the first meeting of creditors. It can also be used if someone needs to file adversary proceedings.
Rule 2004(a) provides that “any person” may be examined. This includes debtors and non-debtors alike. Bankruptcy Code is Section 101(12) define “debtor” as a “person” or municipality concerning which a case under this title has been commenced. The subject matter of the examination must be relevant to the conduct and affairs of the debtor. The following non-debtor parties have been examined under Rule 2004 or its predecessors:
5. Debtor’s relatives
6. Government agencies.
7. Business association and partners
8. Witnesses to wills.
9. Corporation in which debtor is a shareholder
10. Buyer of assets from debtor under a confirmed plan of reorganization.
The scope of a Rule 2004 exam has been likened to a fishing expedition and an inquisition. A wide latitude is allowed in this exam.
What Documents Can be Discovered Under Rule 2004. This rule includes requests for the production of documents as well as the examination of witnesses. Bankruptcy courts have ordered the following types of document production.
1. Non-debtor records
2. Bank records
3. Accountants work papers
4. Government documents
5. List of persons to enable solicitation to join creditor group.