EVIDENTIARY PRIVILEGES IN BANKRUPTCY CASES. Presented By: HON. HARLIN D. COOTER HALE United States Bankruptcy Judge, Northern District of Texas

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1 EVIDENTIARY PRIVILEGES IN BANKRUPTCY CASES Presented By: HON. HARLIN D. COOTER HALE United States Bankruptcy Judge, Northern District of Texas CONRAD C. STEELE Law Clerk to the Honorable Harlin D. Cooter Hale United States Bankruptcy Judge, Northern District of Texas Co-Authored By: SAMER J. LAWAND J.D. Candidate, SMU Dedman School of Law, December 2014 Bankruptcy Extern to the Honorable Harlin D. Cooter Hale, Fall 2013 CONRAD C. STEELE Law Clerk to the Honorable Harlin D. Cooter Hale United States Bankruptcy Judge, Northern District of Texas BENJAMIN J. GERBER Bankruptcy Extern to the Honorable Harlin D. Cooter Hale United States Bankruptcy Judge, Northern District of Texas, Fall 2013 State Bar of Texas 29 th ANNUAL ADVANCED CONSUMER BANKRUPTCY COURSE February 20-21, 2014 Houston CHAPTER 10

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3 HONORABLE HARLIN D. HALE United States Bankruptcy Judge 1100 Commerce Street - Room 1254 Dallas, Texas / Fax: 214/ BIOGRAPHICAL INFORMATION Born in Natchez, Mississippi. B.S., 1979, Louisiana State University. J.D., 1982, Paul M. Hebert School of Law, LSU, Order of the Coif , Law Clerk to the Honorable James L. Dennis, Associate Justice, Louisiana Supreme Court, now Judge on United States Fifth Circuit Court of Appeals , Private practice of law in Dallas, Texas. November 1, 2002, appointed United States Bankruptcy Judge, Northern District of Texas. Memberships/Positions Held: Dallas Bar Association; Dallas Bankruptcy Bar Association; Louisiana State Bar Association; Texas Bar Association; American Bar Association; Executive Committee, Bankruptcy Section of the State Bar of Texas ( Chair); National Conference of Bankruptcy Judges (2011-Present Fifth Circuit Governor); Master, John C. Ford American Inn of Court ( Serjeant of the Inn Award); Federal Bar Association (Bankruptcy Section Chair ); American Bankruptcy Institute; American Law Institute; Commercial Law League; Visiting Professor, SMU Dedman School of Law (Creditors= Rights).

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5 Born and raised in Longview, Texas. Conrad C. Steele Law Clerk to the Honorable Harlin D. Hale 1100 Commerce Street Room 1254 Dallas, Texas Biographical Information B.B.A., 2010, Baylor University; Baylor Business Fellows, Accounting, Economics. J.D., 2013, Southern Methodist University, cum laude , Law Clerk to the Honorable Harlin D. Hale, United States Bankruptcy Judge for the Northern District of Texas , Anticipated, Law Clerk to the Honorable Carl E. Stewart, Chief Judge for the United States Court of Appeals for the Fifth Circuit.

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7 Benjamin J. Gerber Associate Dallas Fax Primary Practice Commercial Disputes Education J.D., DePaul University College of Law, 2013 B.S., Indiana University, 2008 Benjamin Gerber is an associate in the Dallas office. Publications The Applicability of Deepening Insolvency as a Claim Against the Management of Nonprofit Corporations 11 DePaul Bus. & Com. L.J. 263 Articles 2013 Admissions Bar of Texas United States District Court for the Northern District of Texas

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9 SAMER LAWAND 3832 Pine Valley Dr. (469) Plano, TX EDUCATION SMU Dedman School of Law Candidate for J.D., December 2014 GPA = (Top 25% = 3.333) SMU International Law Review Association, Staff Editor The University of Texas at Dallas B.S. in Accounting (Minor in Finance), May 2010 High Honors (GPA = 3.89) Graduated in Three Years WORK EXPERIENCE Dallas, Texas Richardson, Texas Curtis Castillo PC Dallas, Texas Law Clerk: Commercial Bankruptcy, (August 2012 September 2013 & December 2013 Present) Conduct legal research and draft pleadings on issues related to complex Chapter 11 bankruptcy and litigation Interview and communicate with clients, trustees, opposing counsel, and third parties The Honorable Harlin D. Cooter Hale, U.S. Bankruptcy Judge Judicial Extern, (September 2013 December 2013) Conducted legal research and wrote articles on complex issues related to bankruptcy and litigation Observed contentious hearings and trials in order to participate in the decision-making process Dallas, Texas Compuedge.ae Dallas, Texas and Dubai, U.A.E. Consultant, (June 2010 May 2012) Involved in sales of Winward Software (fully integrated accounting system) within exclusive territory Marketed business plans for presentation to U.S. Small Business Administration, angel investors, and landlords McGladrey LLP Dallas, Texas Audit Intern, (January 2010 March 2010) Researched and analyzed financial statements to resolve complex audit- and tax-related issues Proactively managed relationships with institutional lenders to resolve financial issues, ensure compliance with complex loan covenants, and make recommendations for business and process improvements Montgomery Coscia Greilich, LLP (Public Accounting Firm) Tax Intern, (August 2009 December 2009) Prepared federal tax returns using IRS forms 1040, 1065, 1120, and 1120S Involved in various research projects, including EST payment calculations and FAS 109 PUBLICATIONS Plano, Texas Attention Foreign Companies: The Fifth Circuit is Armed with the Authority to Deny Enforcement of a Foreign Reorganization Plan, NORTON BANKRUPTCY LAW ADVISER (forthcoming 2014) (discussing Ad Hoc Group of Vitro Noteholders v. Vitro, S.A.B. de C.V. (In re Vitro S.A.B. de C.V.), 701 F.3d 1031 (5th Cir. 2012)). Attorney Client Privilege Issues in Bankruptcy, DALLAS BAR ASSOCIATION (Oct. 2013) (presented by the Honorable Harlin D. Cooter Hale, U.S. Bankruptcy Judge). Homestead: Reinvestment, Exemption Limitations, and Other Issues, ADVANCED CONSUMER BANKRUPTCY COURSE (Feb. 2014) (to be presented by U.S. Bankruptcy Judges Brown, Hale, Jones, and King). INTERESTS & INVOLVEMENTS CPA Candidate Proficient in Arabic DFW Association of Young Bankruptcy Lawyers The Honorable John C. Ford American Inn of Court American Bankruptcy Institute

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11 Evidentiary Privileges in Bankruptcy Cases Chapter 10 TABLE OF CONTENTS I. THE ATTORNEY-CLIENT PRIVILEGE... 1 a. Legal Entity Debtor s Attorney-Client Privilege... 1 b. Individual Debtor s Attorney-Client Privilege... 1 i. Trustee, as successor to the individual debtor, has the authority to waive the privilege as a matter of law ii. Trustee may not waive the privilege iii. The Court must engage in a balancing test II. FIFTH AMENDMENT PRIVILEGE AGAINST SELF-INCRIMINATION... 2 III. ACCOUNTANT CLIENT PRIVILEGE, SPOUSAL PRIVILEGE, AND OTHER STATE-LAW PRIVILEGES... 2 IV. PRIVILEGES FOR SETTLEMENT & ALTERNATIVE DISPUTE RESOLUTION DISCUSSIONS... 3 V. INTERESTING SCENARIOS AND NUANCES... 4 VI. PRACTICE POINTERS... 4 EXHIBIT 1 MEDIATION COMMUNICATIONS CONFIDENTIALITY ORDER... 5 i

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13 Evidentiary Privileges in Bankruptcy Cases Chapter 10 EVIDENTIARY PRIVILEGES IN BANKRUPTCY CASES Evidentiary privileges situated in common law and codified within the Federal Rules of Evidence apply to bankruptcy proceedings; 1 however, bankruptcy courts interpretation of these privileges is often inconsistent because of the nature of bankruptcy laws. For example, 542 of the Bankruptcy Code invites conflicting judicial interpretation with the phrase [s]ubject to any applicable privilege. 2 In addition, there is a lack of uniformity as to whether bankruptcy counsel s fiduciary duty is to the estate, the creditors, or the client. Although the Supreme Court shed light on the applicability of evidentiary privileges as it relates to corporate debtors in Weintraub, its holding has no bearing on individual debtors. 3 Accordingly, bankruptcy courts differ on the proper approach to take when dealing with individual debtors privileges. I. THE ATTORNEY-CLIENT PRIVILEGE The attorney-client privilege provides for confidential attorney-client communication. 4 The privilege recognizes that sound legal advice depends on a lawyer being fully informed by his or her client, thereby promoting broader public interests in the observance of law and administration of justice. 5 Originally recognized at common law, the attorneyclient privilege is codified in the Federal and Texas Rules of Evidence. 6 Applying the intent codified in the Federal Rules of Evidence and principals expressed by the Supreme Court, the Fifth Circuit defines attorneyclient privileged communications as communications, which the client intended to remain confidential, made to a lawyer for the primary purpose of securing a legal opinion, legal services, or assistance in a legal proceeding. 7 a. Legal Entity Debtor s Attorney-Client Privilege The trustee, as the estate s legal representative under 323 of the Bankruptcy Code, displaces the management of a legal entity. In that capacity, the trustee has the exclusive authority to assert or waive the legal entity debtor s attorney client privilege, 8 notwithstanding the risk of exposing the legal entity debtor s officers, directors, or other representatives to personal or criminal liability. This authority is not limited in scope it includes pre-bankruptcy communications between the legal entity debtor s representatives and bankruptcy counsel. Additionally, in those cases in which the bankruptcy examiner has expanded authority comparable to those of a trustee, the same authority may be imputed to the bankruptcy examiner. 9 b. Individual Debtor s Attorney-Client Privilege Courts are unsettled on the trustee s right to waive an individual debtor s attorney client privilege. 10 One reason may be that an individual debtor s interests may not coincide with the estate s interests. For example, each dollar paid to the creditors of a solvent estate is a dollar not paid to the individual debtor. In these instances and those other unique instances in which a liquidating trustee is appointed, courts have taken one of at least three different approaches. i. Trustee, as successor to the individual debtor, has the authority to waive the privilege as a matter of law. By focusing on the individual debtor s duty to the creditors, these courts transfer the privilege to the estate. These courts reason that the trustee, by operation of law, becomes the owner of the estate assets, 11 which includes pre- and post-bankruptcy attorney client communications. Interestingly, these courts usually hold that the debtor s counsel owes a fiduciary duty to the estate, rather than to the client. 12 ii. Trustee may not waive the privilege. These courts uphold the individual debtor s right to assert the pre- and post-bankruptcy privilege, notwithstanding bankruptcy law s policy to maximize the estate and ensure that debtors are not taking advantage of the bankruptcy privilege. Specifically, these courts have held that the greater privacy concerns weigh in favor of upholding the debtor s unfettered 1 FED. R. EVID. 1101(a)-(b) U.S.C.A. 542(e) (West 2006). 3 See generally Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343 (1985). 4 FED. R. EVID Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). 6 FED. R. EVID. 501; TEX. R. CIV. EVID United States v. Robinson, 121 F.3d 971, 974, 976 (5th Cir. 1997). 1 8 United States v. Campbell, 73 F.3d 44 (5th Cir. 1996). 9 In re Boileau, 736 F.2d 503, 505 (9th Cir. 1984). 10 A likely reason behind bankruptcy courts uneasiness to allow a trustee to waive the attorney-client privilege is the Supreme Court upholding the common law interpretation that the privilege survives the client s death. See generally Swidler & Berlin v. United States, 524 U.S. 399 (1998). 11 In re Smith, 24 B.R. 3 (Bankr. S.D. Fla. 1982). 12 In re Williams, 152 B.R. 123 (Bankr. N.D. Tex. 1992).

14 Evidentiary Privileges in Bankruptcy Cases Chapter 10 privilege. 13 More interestingly, these courts usually hold that the debtor s counsel owes a fiduciary duty to the client, rather than to the estate. 14 iii. The Court must engage in a balancing test. These courts balance the privilege s underlying policies outside the scope of bankruptcy: potential harm of disclosure versus the duty to maximize the value of the estate. In taking this balancing approach, the courts must take into account all the facts and circumstances, 15 such as (1) whether the debtor is a debtor-in-possession, (2) the privileged information in question, and (3) available alternatives to obtain the privileged information. Interestingly, these courts generally allow the trustee to waive the privilege as to post-bankruptcy discussions reasoning that counsel cannot give the debtor and estate different legal advice. These courts will likely uphold the privilege when (1) the trustee s actions against the debtor are adverse (such as a trustee s attempting to revoke a discharge or dismiss a case), (2) it is unlikely that the value of the estate would be increased by such disclosure, and (3) disclosure will increase the likelihood of subjecting the debtor to criminal prosecution. 16 On the other hand, these courts are unlikely to uphold the privilege when the privileged information would be used merely to prosecute preserved causes of actions reasoning that both the trustee and the debtor have a mutual interest to prosecute and maximize the preserved causes of action. 17 Some courts may go further and rule based on the specific contents of the privileged information. 18 II. FIFTH AMENDMENT PRIVILEGE AGAINST SELF-INCRIMINATION Section 521 of the Bankruptcy Code requires a debtor to surrender to the trustee all property of the estate and recorded information relating to such property, whether or not immunity is granted. Notwithstanding the foregoing language, 521 does not nullify an individual debtor s privilege against selfincrimination. Pursuant to the collective entity doctrine, legal entities, including corporations and partnerships, may not invoke the privilege against selfincrimination. This doctrine extends to an individual 13 In re Hunt, 153 B.R. 445 (Bankr. N.D. Tex. 1992). 14 In re Sidco, Inc., 173 B.R. 194 (E.D. Cal. 1994). 15 In re Bazemore, 216 B.R. 1020, 1023 (Bankr. S.D. Ga. 1998). 16 In re Miller, 247 B.R. 704, 708 (Bankr. N.D. Ohio 2000). 17 In re Foster, 188 F.3d 1259 (10th Cir. 1999). 18 In re Foster, 188 F.3d 1259 (10th Cir. 1999). 2 who is the legal entity s custodian of records. 19 On the other hand, an individual debtor may invoke the privilege against self-incrimination to withhold the production of personal records, but may not invoke the privilege to withhold property of the estate. 20 An individual debtor may invoke the privilege against selfincrimination when the individual debtor s production of the personal records may be testimonial, which can happen in three ways 21 : by acknowledging that (1) the documents exist, (2) the documents are in the control of the person producing them, or (3) the person producing them believes they are the documents requested and is authenticating them for evidentiary purposes. Therefore, an individual debtor claiming that personal records are privileged bears the burden to establish reasonable cause to fear prosecution. Finally, courts that follow the balancing approach to the individual debtor s attorney client privilege will usually incorporate the individual debtor s privilege against self-incrimination as a heavy balancing factor. 22 III. ACCOUNTANT CLIENT PRIVILEGE, SPOUSAL PRIVILEGE, AND OTHER STATE-LAW PRIVILEGES Pursuant to the Federal Rule of Evidence 501, courts are not required to apply state law privileges when the proceeding does not involve a state law claim. 23 Accordingly, courts will apply federal common law privileges, which may not include many of the state law privileges, such as the accountant client privilege (not recognized in Texas), spousal privilege, physician patient privilege, and clergy penitent privilege. Rule 501 establishes that federal common law privileges will be applied in federal court, but, in a civil case, state law governs privilege regarding a claim or defense for which state law supplies the rule of decision. 24 For instance, a proceeding involv[ing] execution of a judgment that [is] based on [state] substantive law, despite being resolved in federal court, will be controlled by state law privileges. 25 In 19 Braswell v. United States, 487 U.S. 99, 108 S. Ct. 2284, 101 L. Ed. 2d 98 (1988). 20 In re Crabtree, 39 B.R. 726 (Bankr. E.D. Tenn. 1984). 21 Butcher v. Bailey, 753 F.2d 465 (6th Cir. 1985). 22 In re Silvio De Lindegg Ocean Developments of Am., Inc., 27 B.R. 28 (Bankr. S.D. Fla. 1982). 23 In re Rafsky, 300 B.R. 152 (Bankr. D. Conn. 2003). 24 Fed. R. Evid In re Donald Sheldon & Co., 191 B.R. 39, 47 (Bankr. S.D.N.Y. 1996) (holding that [t]he [j]udgment was based upon state causes of action (breach of fiduciary duty and

15 Evidentiary Privileges in Bankruptcy Cases Chapter 10 contrast, where federal law provides the rule of decision, such as a matter originating purely from a 2004 examination, the federal common law privileges will control. 26 A common instance in bankruptcy court when state law will provide the rule of decision is when the case involves a fraudulent transfer action. 27 Another example where state law privilege will govern is if the Trustee, in an attempt to bring more property into the estate, brings a separate action based on state law, such as suing an insurer of the debtor for failing to pay benefits on a liability policy. 28 Aside from the attorney client privilege, the most frequently invoked state law privilege is the spousal privilege, which privileges communications between spouses. The term spousal privilege really embodies two separate privileges: the spousal confidential communications privilege and the spousal testimonial privilege. Rule 501 does not alter the extent to which spousal immunity was available at common law. Thus, absent any state law claim, counsel would be well served to research federal common law to determine if there is any applicable spousal privilege, whether testimonial or confidential communications. Therefore, in the federal context, whether a trustee can waive a state law privilege will depend on the specific court s approach to an individual debtor s privilege. IV. PRIVILEGES FOR SETTLEMENT & ALTERNATIVE DISPUTE RESOLUTION DISCUSSIONS Neither a settlement discussion privilege nor any Alternative Dispute Resolution (ADR) privileges are recognized in the U.S. Constitution, a federal statute, or rules prescribed by the Supreme Court; thus, the question becomes whether there is a common-law privilege that has been judicially recognized in the light of reason and experience. 29 breach of contract) and, thus, state law is controlling in this matter. ). 26 In re Royce Homes, LP, 449 B.R. 709 (Bankr. S.D. Tex. 2011) (explaining that [a] matter in connection with a prospective 2004 examination is aimed at discovering evidence upon which future causes of action may be based and is therefore governed by bankruptcy law rather than state substantive law. (citation omitted)). 27 See Whittaker v. Carmean, 153 B.R. 985, 991 (Bankr. S.D. Ohio 1993) (holding since the trustee has sued to recover property under the Ohio Uniform Fraudulent Transfer Act, Ohio law supplies the rule of decision and the Court will apply the Ohio rules of evidence with regard to privilege. ). 28 In re Couch, 80 B.R. 512, 516 (S.D. Cal. 1987). 29 Fed.R.Evid The United States Courts of Appeals that have addressed the privilege of settlement discussions are split, but most have rejected the need for the privilege. 30 The United States Bankruptcy Court for the Eastern District of California, adopting the Court of Appeals for the Federal Circuit s analysis, 31 refused to recognize the privilege because other methods adequately protect confidentiality of settlement discussions. 32 Because the views differ across the United States Courts of Appeals and the Supreme Court has not yet recognized such a privilege, settlement discussions are not privileged. A mediation communication privilege does exist in some courts. In determining whether a federal mediation privilege should exist, the Bankruptcy Court for the Eastern District of California, applying the same factors considered by the Supreme Court in Jaffee, believed that because mediating parties expect that the any information disclosed will remain protected, their willingness to mediate would decrease if it were discoverable in court. 33 Because a mediation privilege exists, there is hope for the adoption of more privileges related to Alternative Dispute Resolution. 34 In light of the wanting statutory and common law privileges regarding settlement negotiations and ADR proceedings, Federal Rule of Evidence 408 may prohibit admission of evidence that would otherwise be admitted without settlement and ADR privileges. Rule 408 does not protect documents from discovery, but it determines whether the evidence is admissible. 35 The 30 See In re City of Stockton, Cal., 475 B.R. 720, (Bankr. E.D. Cal. 2012). See also Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976, (6th Cir.2003) (privilege recognized); In re General Motors Corp. Engine Interchange Litig, 594 F.2d 1106, 1124 n. 20 (7th Cir.1979) (no privilege) 31 The Supreme Court has noted several factors to assess the propriety of a new privilege under Rule 501 (1) whether the asserted privilege is rooted in the imperative need for confidence and trust ; (2) whether the privilege would serve public ends; (3) whether the evidentiary detriment caused by the exercise of the privilege is modest; and (4) whether the denial of the federal privilege would frustrate a parallel privilege adopted by the states. Folb v. Motion Picture Industry Pension and Health Plans, 16 F.Supp.2d 1164, 1171 (C.D. Cal. 1998) (quoting Jaffee v. Redmond, 518 U.S. 1, 9 13 (1996)). 32 In re City of Stockton, Cal., 475 B.R. at 732 (noting that a protective order protected confidentiality). 33 In re RDM Sports Grp., 277 B.R. 415, (Bankr. N.D. Ga. 2002). 34 Currently, mediation is the only form of alternative dispute resolution that has addressed the necessity of creating an evidentiary privilege. 35 In re RDM Sports Grp., 277 B.R.at 433.

16 Evidentiary Privileges in Bankruptcy Cases Chapter 10 rule excludes evidence of conduct or statements of compromise negotiations unless the evidence is offered to prove a witness bias, negation of undue delay, or it proves an effort to obstruct a criminal prosecution. 36 Exclusions grounded in Rule 408 are often based on public policy favoring the compromise and settlement of disputes. 37 Rule 408 may provide the best alternative to protect settlement and ADR discussions in the absence of a statutory and common law evidentiary privilege, but documenting the inadmissibility of settlement discussions and other ADR communications with a signed agreement explicitly protects this dialogue from introduction in a bankruptcy court. 38 V. INTERESTING SCENARIOS AND NUANCES The trustee s waiver of a privilege in one proceeding does not bar the debtor s representatives from asserting that privilege in another. 39 For example, a debtor may invoke the waived privilege in a separate proceeding brought by the debtor s shareholders. In other words, the trustee s waiver does not apply to third parties. 40 As to joint representations, courts will likely find that the trustee s waiver of jointly privileged information, such as that of a parent subsidiary relationship, 41 does not apply to third parties absent a waiver from the other jointly represented party. 42 Moreover, the trustee s attorney client privilege waiver does not necessarily affect an individual debtor s attorney client privilege when the attorney client communications consists of both personal attorney client counseling and corporate attorney client communications. 43 Therefore, the mere fact that counsel advised both the corporation and its president individually does not bar the trustee from waiving the corporate debtor s privilege. More interestingly, if the privilege is shared, such as when a receiver (e.g. the Federal Deposit Insurance Commission) is appointed, the trustee may not unilaterally waive the privilege. 44 VI. PRACTICE POINTERS Advise debtor to retain counsel for prebankruptcy planning and separate counsel for the initial bankruptcy filing and postbankruptcy matters. Advise debtor that pre-bankruptcy information is typically fair game for the trustee. Advise the debtor to whom counsel owes fiduciary duties. Does counsel have duties to the debtor? Duties to estate? Duties to the officer in his or her personal capacity? o Make it clear in the engagement agreement o Wise method of communication, e.g. (1) corporate , or (2) personal Counsel may not claim privilege for his or her own benefit. Advise debtor of his or her right to correctly characterize information subject to a statelaw privilege under a federal-law privilege, such as the work product doctrine. Advise the debtor to anonymously or discreetly inform the trustee of possibility incriminating records or property in order to avoid self-incrimination. Advise the debtor that invoking the privilege against self-incrimination may protect the debtor, but it may result in a denial or dismissal of the debtor s case. Counsel may wish to include in mediation and other ADR orders that all party discussions and negotiations are not admissible into evidence. 36 Fed. R. Evid. 408(a)(2), (b). 37 See In re RDM Sports Grp., 277 B.R. at See, e.g., Ex. 1 Mediation Communications Confidentiality Order. 39 Citibank, N.A. v. Andros, 666 F.2d 1192 (8th Cir. 1981). 40 In re Mirant Corp., 326 B.R. 646 (Bankr. N.D. Tex. 2005). 41 In re Mirant Corp., 326 B.R. 646 (Bankr. N.D. Tex. 2005). 42 In re Crescent Res, LLC, 457 B.R. 506 (Bankr. W.D. Tex. 2011). 43 In re Carter, 62 B.R (Bankr. C.D. Cal. 1986) In re Se. Banking Corp. Securities & Loan Loss Reserves Litig., 212 B.R. 386 (S.D. Fla. 1997).

17 Evidentiary Privileges in Bankruptcy Cases Chapter 10 EXHIBIT 1 MEDIATION COMMUNICATIONS CONFIDENTIALITY ORDER IT IS ORDERED that all communications made by the parties and their respective representatives and counsel to each other or to the mediator in connection with the mediation process, the conduct and demeanor of the parties and their respective representatives and counsel during the mediation process, and all documents created in connection with the mediation process, including, without limitation, the mediator s notes or records, shall be confidential and shall not be admissible in evidence for any purpose, nor shall they be the subject of any discovery in any proceeding; provided, however, that any document that is otherwise discoverable shall not be shielded from discovery solely because it was used in the mediation process. The mediation sessions and any conferences in connection therewith shall be treated as compromise negotiations for purposes of the Federal Rules of Evidence and any rules of evidence of any other jurisdiction. The mediator is disqualified from appearing as a witness in any matter, and shall not be called as a witness with regard to the mediation or any matter arising out of or related to the mediation. 5

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