DWIGHT H. WILLIAMS, JR., Bankruptcy Judge
On December 7, 2004, MidSouth Bank, N.A. (hereinafter "MidSouth" or "Bank") served Judy Dyson (hereinafter "Dyson") with a subpoena commanding her to produce for inspection and copying certain business records of CC Classics. On December 20, 2004, Dyson filed an objection to the non-party subpoena. The matter was set for hearing on January 19, 2005 in Dothan, Alabama. At the hearing MidSouth and Dyson were represented by their respective counsel, Virginia L. McInnes and Gregory B. McCain. The debtor, CCC Classics, Inc. was represented by its attorney, Cameron A. Metcalf.
Despite the similarity of names, CC Classics is not the debtor in this chapter 7 case. Rather, the debtor is CCC Classics, Inc. The subpoena directs the production of documents within 24 categories of business records of CC Classics. The specific records sought are enumerated in an attachment to the subpoena. See Doc. 16.
Contentions of the Parties
Dyson maintains that the debtor corporation, CCC Classics, Inc., was, prior to its bankruptcy, owned and operated by her brother, James Leon Davis. CCC Classics, Inc. was engaged in the business of restoring antique vehicles. After CCC Classics, Inc. filed for bankruptcy, Dyson began CC Classics, which also is in the vehicle restoration business. Dyson's counsel intimated that Dyson's business name, CC Classics, was intentionally chosen because of its similarity to the debtor's name in order to preserve the debtor's client base.
First, Dyson contends that she is not a party to this bankruptcy proceeding either as a creditor or as a defendant in any adversary proceeding. Hence, she claims, pursuant Fed.R.Civ.Proc. 45(c)(2)(B) made applicable to bankruptcy proceedings by Fed.R.Bankr.Proc. 9016, that by merely filing a timely objection to the subpoena, a non-party negates the subpoena commanding production until the court orders otherwise following the serving party's motion to compel.
Further, Dyson contends that the subpoena is overly burdensome, unlimited in scope and thereby too costly, seeks information which is unlikely to lead to the discovery of admissible evidence, and endangers Dyson's business by revealing confidential business information.
On the other hand MidSouth contends that cause exists to believe that property was transferred between CCC Classics, Inc. and CC Classics, and that those transfers may be voidable under the Bankruptcy Code. As a creditor of CCC Classics, Inc., MidSouth contends it is entitled to further investigate these transactions.
In fact, Dyson's counsel acknowledged that certain property held by the debtor corporation under consignment was delivered to CC Classics. Although, Dyson does not admit that these transfers are voidable, she acknowledges that transfers between the businesses were made.
Conclusions of Law
By setting Dyson's objection to the subpoena for hearing, this court may have unwittingly bypassed the intended mechanics of Fed.R.Civ.Proc. 45(c)(2)(B). The Rule provides:
Subject to paragraph (d)(2) of this rule, a person commanded to produce and permit inspection and copying may, within 14 days after service of the subpoena or before the time specified for compliance if such time is less than 14 days after service, serve upon the party or attorney designated in the subpoena written objection to inspection or copying of any or all of the designated materials or of the premises. If objection is made, the party serving
the subpoena shall not be entitled to inspect and copy the materials or inspect the premises except pursuant to an order of the court by which the subpoena was issued. If objection has been made, the party serving the subpoena may, upon notice to the person commanded to produce, move at any time for an order to compel the production. Such an order to compel production shall protect any person who is not a party or an officer of a party from significant expense resulting from the inspection and copying commanded.
Therefore, in retrospect the court should not have acted upon Dyson's objection unless and until MidSouth filed a motion to compel. Had MidSouth never moved to compel production, Dyson would have been relieved by operation of the Rule from the command of the subpoena.
Nevertheless, the objection to the subpoena was set for hearing, and both MidSouth and Dyson were present and given a full opportunity to be heard. The court will treat the arguments made at the hearing as not only an objection by Dyson to the subpoena but also a motion by the bank to compel production.
It appears undisputed that a close relationship exists between the debtor corporation and CC Classics. The two businesses are owned by relatives, their names were deliberately made similar so as to preserve the business of one for the benefit of the other, and property in the possession of the debtor corporation was delivered, voidable or not, to CC Classics. Therefore, there is ample cause to permit MidSouth to further investigate the transactions between the debtor corporation and CC Classics. The fact that there is no pending adversary proceeding or that Dyson is not creditor or a party to this bankruptcy proceeding is of no consequence. Production of documents by any entity, not merely a party, is available under Fed.R.Bankr.Proc. 2004 (c).
The purpose of bankruptcy is not only to provide debtors with a fresh economic start but, also, to garner the debtors' non-exempt assets for equitable distribution to creditors.
Next, the court turns to Dyson's contentions that the subpoena is overly broad and burdensome, is unlikely to lead to discoverable evidence, and that it may jeopardize Dyson's business by divulging confidential information. Here, too, Fed.R.Civ.Proc. 45 controls. In relevant part the Rule provides:
(c)(3)(A) On timely motion, the court by which a subpoena was issued shall quash or modify the subpoena if it . . .
(iv) subjects a person to undue burden.
(B) If a subpoena
(i) requires disclosure of a trade secret or other confidential research, development, or commercial information . . . the court may order appearance or production only upon specified conditions.
MidSouth requests production of documents from 24 categories. Its only legitimate purpose for these documents is to determine whether voidable transfers of property have been made by the debtor corporation to Dyson or to CC Classics. The fact that the subpoena seeks production of documents that may ultimately be inadmissible as irrelevant is not grounds, under Fed.R.Civ.Proc. 45, to quash or to modify the subpoena. See Fed.R.Civ.Proc. 7026(b)(1). Rather, the question is whether compliance would be unduly burdensome. The court, based upon the information available to it through counsel's argument, cannot conclude that production of the requested documents is unduly burdensome, particularly if MidSouth inspects the documents at CC Classics' place of business.
Finally, Dyson is concerned that her business may be harmed by the release of its business records. In particular, she fears that MidSouth will contact her current clients and thereby damage her relationship with them. At the hearing, however, counsel for MidSouth agreed not to contact any of CC Classics' customers without first seeking permission of this court. In the court's view, said agreement not to contact customers adequately protects the commercial interests of CC Classics. Accordingly, it is
ORDERED that Judy Dyson's objection to the non-party subpoena of enumerated records of CC Classics by MidSouth Bank is OVERRULED IN PART and GRANTED IN PART. Judy Dyson shall make the subpoenaed records available to MidSouth Bank for inspection at CC Classics' place of business. The inspection shall occur on a date and at a time mutually agreed by the parties but no later than February 24, 2005. In the event that off-site photocopying of any of these records is necessary, counsel for Dyson and MidSouth Bank shall cooperate in accomplishing that task, but MidSouth Bank shall bear the expense of photocopying. It is further
ORDERED that, pursuant to Fed.R.Civ.Proc. 45 (c)(3)(B)(i), MidSouth Bank shall not disclose or otherwise use the information obtained in response to the subpoena in any contact, direct or indirect, with any customer of CC Classics without prior consent of this court.