Free Respone to Objections - District Court of Delaware - Delaware

Case 1:04-cv-01266-SLR Document 237-3 Filed O3/21/2006 Page1 0f4
EXHIBIT B I

{ Case 1 :04-cv-01266-SLR Document 237-3 Filed 03/21 /2006 Page 2 of 4
#.4 IN THE UNITED STATES BANKRUPTCY COURT A
POR THE DISTRICT OF DELAWARE
In re: ) Chapter 11 i
) I
TELE GLOBE COMMUNICATIONS ) Case No. 02-l 1518 (MFW) -
CORPORATION, a Delaware corporation, et al., )
) (J ointly Administered)
Debtom. _ )
) Hearing Date: April 28, 2004 at 11:30 a.m.
) j
) RE: Docket No. 2169 L
OPPOSITION TO MOTION OF THE OFFICIAL COl'vIMI'I`TEE OF
IJNSECURED CREDITORS FOR AN ORDER AUTHORIZIN G F
AND COMPELLING DISCOVERY PURSUANT TO BANKRUPTCY RULE 2004 €
BCE Inc. ("BCE"), through its counsel, Young Conaway Stargatt & Taylor, LLP »
and Shearman & Sterling LLP, submits this memorandum of law in opposition to the
Application ofthe Official Committee of Unsecured Creditors (the "Committee") of the above- _
captioned debtors and debtors-in-pos session (collectively, the "Debtors”)l for an Order I
Authorizing and Compelling Discovery Pursuant to Bankruptcy Rule 2004 (the "Application”).
For the reasons set forth below, BCE respectfully requests that this Court deny the Committee‘s _
application. I
PRELIMINARY STATEMENT
1. BCE has cooperated with the Committee in good faith and provided it
with sufficient information to detennine whether to tile a litigation; ····
2. In the irst meeting between counsel to the Committee aud counsel to
BCE, held on September 8, 2003, counsel to BCE agreed to produce the files of nine individuals
A l The Debtors consist of the following entities: Teleglobe Communications Corporation, Teleglobe USA i
Inc., Optel Telecommunications, Inc., Teleglobe Holdings (U.S.) Corporation, Telcglobe Marine (U .S.) Inc.,
Teleglobe Holding Corp., Teleglobe Telecom Corporation, Teleglobe Investment Corp., Teleglobe Luxembourg A
LLC, Teleglobe Puerto Rico Inc. and Teleglobe Submarine Inc. L
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B. BCE Properly Withheld Documents Protected under the Common Interest I
Privilege
30. The Committee improperly seeks to compel the production of 98
documents designated by BCE as protected under the common interest privilege.9 The
Committee argues that, because Messrs. Lalande, Masse, and Ryan were also corporate officers
of the Debtors, the privilege does not exist. (Application itil 20-23.) This argument has no basis
for two reasons.
_ 31. Krrg, the Committee’s application is not ripe. The common interest j
privilege protects legal advice where the parties are “1inked by a common legal interest and are
jointly consulting an attorney concerning a mutual concerrr." Purizer Corp. v. Battelle Mern’l
hrs, No. Ol C 6360, 2002 WL 1400263, at *1 (N .D. lll. June 27, 2002) (quotation omitted). As
denoted on BCE’s privilege log, BCE attorneys consulted with attorneys, ofticers, or employees
of Teleglobe Inc. or its subsidiaries to discuss or provide legal advice in matters where BCE and C
Teleglobe Inc. (or its subsidiaries) shared a common legal interest. These documents are
therefore protected under the common interest privilege.
32. The Committee’s own cases demonstrate that such common interest
privilege will continue to exist until the Debtors Ele a litigation against BCE: “wlrere the same
attorney represents two parties having a common interest, and each party communicates with the
attorney, the communications are privileged from disclosure at the instance of a third person.
pp p gg p Those, oornmunications are not privileged, however, in a subsequent controversy between the two
original parties? Simpson, 494 F.2d at 855; gee gl_sp_ 68 F.R.D. at 368. As described I
above, supra at n.8, the Debtors have not tiled such a litigation.
9 These documents are denoted as "AC/CI" on the privilege log. Ig . `
1 8 I
vnr;994944.2 59825.100l

Case 1 :04-cv-01266-SLR Document 237-3 Filed 03/21 /2006 Page 4 of 4
77 33. Sggog, at this time, the Committee has no standing to make this
Application because it does not stand in the Debtors’ shoes. In re Tenn. Valley Steel Corp., 183 .
B.R. 795, 799-800 (Bankr. E.D. Tenn. 1995). "Nutnerous courts in applying § 1109(b) qualify a
creditors’ committec’s standing by applying the following three-part test: (1) the creditors’
committee must assert a colorable claim; (2) the debtor must have unjustifiably refused to pursue
the claim; and (3) the creditors’ committee must have obtained the permission ofthe bankruptcy
court to initiate the action on behalf of the debtor." g None of these requirements has been Z
met.
a. The Committee has failed to identify any colorable claims
_ 34. First, the Committee has failed to assert or even clearly identify any I
claims it might assert. The only statement in the Application that remotely resembles a possible
claim is that BCE had allegedly "committed” to fund the completion of GlobeSystem, that the
Debtors relied on such a "commit:tnent" and incurred "billions of dollars of debt to build or . . .
fund GlobeSystem," and that the Debtors incurred damages when BCE announced that it would
cease its long-term support of Teleglobe Inc., on April 24, 2002. (Application if 14.) Such a
claim is not colorablew
35. In May 1999 (over a year prior to BCE’s acquisition of 77 percent of 1
Teleglobe Inc.), Teleglobe Inc. announced the development of the GlobeSystem network and
that the completion of GlobeSystem would require US$5 billion. In June 1999, Teleglobe Inc.
raised approximately US$1.7SB for that purpose, with US$3 .25B still needed to complete the
network. Since that time, all securities ftlings of Teleglobe Inc. in the United States and Canada
‘° Alternatively, at eredttors’ committee may also sue on behalf of debtors where the trustee or the debtor in
possession consents to such an action, but the suit must be necessary and beneficial to the resolution ofbankruptcy
proceedings. In re Commodore Int’} Ltd., 262 F.3d 96 (2d Cir. 2001) (holding that action had to be dismissed since ‘
creditor-s’ connnittee’s suit was neither necessary nor beneicial). For the reasons described in this section, the i
Committee has not, and cannot, make a showing that such a lawsuit would be necessary and beneficial. Q
19
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