Avaya Inc.

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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In re: 	:
: 	Chapter 11
AVAYA, INC., et al., 	: 	Case No.: 17-10089
:
Debtor. 	:
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ORDER REGARDING NEW OKLAHOMA CITY LEASE
The debtors seek authority to terminate their current Oklahoma City lease (the
Old Lease”) and to enter into a new lease at the same premises (the “New Lease”) for
approximately one-third of the amount of space rented under the Old Lease. The
debtors also seek to seal certain information in the New Lease, although they have
delivered only a redacted copy of their application and the New Lease to chambers.
Nevertheless, the sealing motion tells us that the secret information includes such
monetary terms as the rents under the Old and New Lease, the amount of the security
deposit, the predicted operating costs paid by the debtor, the operating cost cap,
construction allowance and the potential renewal rate. Non-monetary secret terms
include the parties’ inspection rights, minimum general liability insurance, hazardous
materials representations and certain construction management and supervision
representations. The justification for sealing this information is contained in one
conclusory sentence: “Disclosing the Confidential Terms could jeopardize the Debtors’
ability to obtain, and the Landlord’s ability to negotiate more favorable terms with other
potential tenants.”
The applications to seal the information and approve the New Lease are denied.
Under 11 U.S.C. § 107(a), any paper filed in a case is a public record and open to
examination. Section 107(a) reinforces the general presumption in favor of public filing.
Geltzer v. Andersen Worldwide, S.C., No. 05 Civ. 3339(GEL), 2007 WL 273526 at *3
(S.D.N.Y. Jan. 30, 2007) (Lynch, J.). Section 107(b) contains an exception to public
disclosure to protect, inter alia, “commercial information.” “Commercial information
has been defined as information which would cause ‘an unfair advantage to competitors
by providing them information as to the commercial operations of the debtor.’” Video
Software Dealers Ass’n v. Orion Pictures Corp. (In re Orion Pictures Corp.), 21 F.3d 24,
27 (2d Cir. 1994) (quoting Ad Hoc Protective Comm. for 10 1/2% Debenture Holders v.
Itel Corp. (In re Itel Corp.), 17 B.R. 942, 944 (9th Cir. BAP 1982)).
“Commercial information” does not include information designed to protect a
party’s negotiating leverage in other matters. Id. at *4 (sealing information to protect
negotiating leverage “is a wan excuse for impinging on the public’s right of access to
judicial documents.”); In re Quigley Co., 437 B.R. 102, 153 (Bankr. S.D.N.Y. 2010)
(same); In re Northwest Airlines Corp., 363 B.R. 704, 708 & n. 8 (Bankr. S.D.N.Y.
2007) (rejecting argument by ad hoc committee of equity security holders that its
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members should be relieved of disclosure obligations required under Federal
Bankruptcy Rule 2019 because disclosure would reveal their investment strategies and
damage their bargaining positions). Even if it did, the debtors have failed to sustain
their burden of proving that the disclosure of the concealed information will impair the
landlord’s negotiating leverage or place it at a disadvantage with its competitors. The
debtors are bargaining for a specific area in the premises, and have not shown that the
deal they struck will affect the deals the landlord may reach or attempt to reach for
different space in the same premises.
So ordered.
Dated: New York, New York
December 12, 2017
/s/ Stuart M. Bernstein
STUART M. BERNSTEIN
United States Bankruptcy Judge
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