October 29, 2021, Northern District of Texas – Defendant Ford Motor Credit recently filed a motion to compel Trustee Dennis Faulkner, for the bankruptcy estate of Reagor Dykes Motors, LP, to respond to its requests for interrogatories and production of documents. The Court found that the interrogatories and requests objected to by the Trustee sought information regarding the Debtors’ financial relationship with other creditors and how the Debtors’ transfers harmed other creditors to Ford Credit. The Trustee contended that discovery about any specific creditor is irrelevant to his causes of action and that supplying the requested discovery would be “overly burdensome.”
The Court held that where Trustee intended to prove “fraudulent intent” through the existence of a “Ponzi scheme”, Defendant’s requested discovery was not relevant under Fed. R. Civ. P. 26 and therefore, an order compelling trustee to respond to the creditor’s discovery requests was not warranted. Additionally, the Court held that the requested discovery was not relevant to the Defendant’s defenses, and the enormous volume of documentation sought weighed against allowing the requested discovery. Finally, the Court concluded that the request was unduly burdensome as it sought hundreds of thousands of documents regarding Debtors’ every transaction with creditors, which were largely irrelevant.
Folkner v. Ford Motor Credit Co., LLC (In re Reagor-Dykes Motors, LP), 2021 Bankr. LEXIS 3004, 2021 WL 5094783