United States: E-Discovery Takes The Chaos Out Of Your Bankruptcy Case

Last Updated: November 24 2016
Article by Yann Geron

Yann Geron co-authored the Corporate Counsel article, "E-Discovery Takes the Chaos Out of Your Bankruptcy Case."

A bankruptcy trustee turns the key to an office. What awaits is a possible wasteland: The space is abandoned and unkempt, computer systems are unintelligible and inaccessible and institutional knowledge of the company has walked out the door with the employees. Yet, in the face of such disorder, the trustee is charged with building a comprehensive dataset and maintaining a spotless chain of custody that will be valuable in potential litigation.

At the outset of a case, a trustee needs to address a number of concerns, including IT resources and institutional knowledge, financial reporting systems, data retention and remote access and spoliation. How is this accomplished most effectively? The answer lies in building a robust e-discovery program. A comprehensive e-discovery program utilizes technology and data management tools to quickly access and review large volumes of financial and business data, as well as offer best practices to avoid potential future spoliation issues.

An Expanding Data Universe and Diminishing Institutional Knowledge

The number of electronic data sources, ranging from webmail to mobile devices to social platforms and cloud apps, is rising exponentially in the digital age. According to an EMC Digital Universe study, data produced by an organization continues to grow at an annual rate of 40 percent. This ever-expanding data universe presents concerns for bankruptcy trustees. The trustee is charged with finding, isolating and maintaining a vast amount of pristine data in order to effectively administer the estate. This includes managing accounts receivable collections and inventory liquidations, as well as notifying creditors and identifying assets.

One of the key issues is the gap of time where you have to control the data before the actual mechanics are in place. It is very difficult to discover where all of the data lies. You don't have easy access to the passwords or to the organization's data map. Gaining access to critical data then relies upon identifying key people—and this is not typically senior management. It is the people at the desk, those who know the mapping system, have the passcodes and know how to gain access to the data. Locating these individuals is extremely difficult—they simply walk away because they aren't getting paid. The trustee must understand what legal tools are available to the trustee and be able to identify who holds the keys to the kingdom.

On top of that, data is often stored in a variety of disparate sources and in formats that are unusable. You never know where the information is going to be housed. For example, social media platforms contain a significant amount of correspondence with employees and customers. Or, a trustee might walk into an organization and not see any files on the desktop. The files are instead stored on the web. It is crucial to know who has access to the data and to be able to utilize the latest e-discovery tools in order to effectively and efficiently build a case.

If litigation is anticipated, the trustee must take the necessary steps to safeguard the data and preserve an unaltered copy to be used as the litigation proceeds. Unfortunately, in some cases, the likelihood of litigation isn't known at the onset of the case.

Trustees are concerned about the integrity of the data not only in preparation for possible litigation, but also because when they confirm that data to the court or other parties, their personal integrity is at stake. For these reasons, it is best for them to make and preserve copies of the data to avoid spoliation issues later in the case.

(Expert tip: We suggest bankruptcy trustees take reasonable steps to make complete forensic images of the data at the earliest stage. Retain the information, have it preserved and then shut everything down. Taking this approach enables trustees to have the information from the outset, and minimize and control data costs going forward.)

Use the Latest Tools to Build a Comprehensive Program

Advances in e-discovery are a breath of fresh air for the trustee. The growing magnitude of electronically stored information (ESI) makes building and implementing an e-discovery protocol even more vital. Not only can data integrity be maintained more easily, but with only 22 percent of the data considered useful, according to the EMC Digital Universe study, e-discovery builds massive efficiency in locating and reviewing the most relevant information related to the case.

As trustees wind down the operations of the business, they need to manage data and ensure correct information is available to financial advisers and any other parties that may require access. Without advanced data mining and e-discovery technologies, however, this task can be arduous. If a trustee is not using the correct query system, the data can be overwhelming. Sometimes years' worth of work-in-process (WIP) is not readily detectable within the accounting data. Accessing this information may require tapping into the organization's email system to obtain the exchange of information and uncover the hidden work-in-process.

In situations such as this, forensic tools exist to index the vast amount of email messages in a company's system and organize data so that trustees can rapidly access relevant information at the moment they need it. Such tools have the capacity to sort through copious email threads and eliminate duplicative data. This includes tracking email attachments, as well as documents that exist within Microsoft Office and similar programs.

Electronic data is changing at a rapid pace, including its use, source and sheer volume. A bankruptcy trustee is entrusted to act swiftly and to efficiently handle data challenges, following best practices. Each case is unique and comes with its own particular requirements. Trustees who remain attuned to the nuances involved in the process gain a tremendous advantage and will be able to successfully mine, assess and control disparate data.

Reprinted with permission from the November 22, 2016 issue of Corporate Counsel. (c) 2016 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.