The documents Remington agreed to hand over include its communications with potential buyers about the families’ litigation against the company.
(CN) — An attorney for gun manufacturer Remington Outdoor Company told a federal judge Thursday the company has agreed to voluntarily release some internal documents to the families of Sandy Hook shooting victims during the company’s bankruptcy proceedings.
At the same time, U.S. Bankruptcy Judge Clifton Jessup Jr. in Decatur, Alabama, denied many of the requests from the families to conduct discovery into Remington’s motivations for filing for bankruptcy, saying during a telephonic hearing many of the requests did not pertain to the bankruptcy proceedings.
The 204-year-old gun maker, which a few weeks ago declared bankruptcy for the second time since 2018, seeks to quickly sell off its holdings in a sale scheduled for mid-September. But the Sandy Hook families are skeptical.
The company has been engaged in a half-decade legal battle with the families of some of the 26 children and school staff killed in the 2012 shooting at Sandy Hook Elementary School in Newtown, Connecticut. Although the matter was briefly considered by the U.S. Supreme Court, the wrongful death lawsuit alleging Remington negligently marketed and sold the Bushmaster AR-15-style rifle used in the shooting is scheduled for a September 2021 trial.
Remington, which operates a factory in Huntsville, filed for bankruptcy in the Northern District of Alabama.
According to their attorney Faith Gay of Selendy & Gay, the Sandy Hook families wanted to investigate whether Remington filed for Chapter 11 bankruptcy protection to dodge liability in the lawsuit with the families.
In filings with the bankruptcy court, the families said Remington did not list the Sandy Hook lawsuit as one of its potential unsecured creditors and the sale may “unlawfully prejudice their claims.”
Remington’s bankruptcy filing “occurred on the precipice of getting significant discovery” in a unique lawsuit that peered into a shadowy industry that had never been opened before, Gay said during Thursday’s hearing.
“We have the right to investigate and we have concerns,” the attorney said.
She added the Sandy Hook families may contest the sale of Remington’s holdings.
According to Gay, the families wanted to see documents such as board of director minutes and the company’s valuations.
Remington’s attorney Gary Svirsky said the bankruptcy filing does not give litigants permission to snoop into its business. He raised concerns that discovery the Sandy Hook families might obtain in Remington’s bankruptcy proceedings could be used in the Connecticut lawsuit.
“It’s suspicious to us that the plaintiff wants to know how much defendants spent on the case,” Svirsky said.
The Sandy Hook families also asked for information about Remington’s insurance proceeds – reservation of rights letters, for instance – and Jessup said it was reasonable for creditors to know about insurance proceeds. The unsecured creditors committee, the judge said, had the authority to investigate.
But Jessup said the other requests for discovery by the Sandy Hook families, such as documents that spoke to the valuation of Remington before its filing for bankruptcy, had no relevance to the sale or was a “red herring” and the judge denied them.
The documents Remington agreed to hand over to the Sandy Hook families include its communications with potential buyers about the families’ litigation against the company and any nondisclosure agreements it created because of the sale.
Svirsky did not immediately return a request for comment.
A spokesperson for the attorneys representing the Sandy Hook families declined Courthouse News’ request to interview one of the attorneys. However, Gay said in a statement, “We look forward to reviewing the information to be provided by the debtor.”